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Registered number: 08622821
AOTO ELECTRONICS (UK) LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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AOTO ELECTRONICS (UK) LIMITED
COMPANY INFORMATION
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W Wu (resigned 8 March 2021)
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S Yang (resigned 8 March 2021)
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D Kong (appointed 8 March 2021)
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Chartered Accountants & Statutory Auditors
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AOTO ELECTRONICS (UK) LIMITED
CONTENTS
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Independent auditors' report
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Statement of profit or loss and other comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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Detailed profit and loss account and summaries
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AOTO ELECTRONICS (UK) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The director presents his report and the financial statements for the year ended 31 December 2021.
Director's responsibilities statement
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The principal activity of the company is the sale, maintenance and repair of LED displays.
The director is responsible for preparing the Director's report and the financial statements, in accordance with applicable law.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.
Under company law the director must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the director is required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgments and estimates that are reasonable and prudent;
∙state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;
∙assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless the director either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. The director is responsible for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and has general responsibility for taking such steps as are reasonably open to the director to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
The profit for the year, after taxation, amounted to £56,328 (2020 - £69,822).
The directors do not recommend a payment of final dividend.
The directors who served during the year were:
W Wu (resigned 8 March 2021)
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S Yang (resigned 8 March 2021)
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D Kong (appointed 8 March 2021)
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AOTO ELECTRONICS (UK) LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Disclosure of information to auditors
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The director at the time when this Director's report is approved has confirmed that:
∙so far as is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙ has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
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AOTO ELECTRONICS (UK) LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The auditors, MHA MacIntyre Hudson, 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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AOTO ELECTRONICS (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AOTO ELECTRONICS (UK) LIMITED
We have audited the financial statements of AOTO ELECTRONICS (UK) LIMITED for the year ended 31 December 2021 which comprise the Statement of profit or loss and other 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 set out on pages 16 - 21. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.
In our opinion the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 December 2021 and of its profit for the year then ended;
∙have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. ur responsibilities under those standards are further described in the auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to principal risks, going concern and viability statement
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We have nothing to report in respect of the following information in the Annual report, in relation to which the ISAs (UK) require us to report to you whether we have anything material to add or draw attention to:
∙the disclosures in the Annual report that describe the principal risks and explain how they are being managed or mitigated;
∙the director's confirmation in the Annual report that they have carried out a robust assessment of the principal risks facing the company, including those that would threaten its business model, future performance, solvency or liquidity;
∙the director's statement in the financial statements about whether the director considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements and the director's identification of any material uncertainties to the company's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements; or
∙the director's explanation in the annual report as to how they have assessed the prospects of the company, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.
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AOTO ELECTRONICS (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AOTO ELECTRONICS (UK) 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. ur 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. ur 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Director's report have been prepared in accordance with applicable legal requirements.
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AOTO ELECTRONICS (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AOTO ELECTRONICS (UK) LIMITED (CONTINUED)
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of director's remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the director's responsibilities statement on page 3, the director is 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 director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the director is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial statements
ur 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:
∙Enquiry of management and those charge with governance around actual and potential litigation and claims;
∙Enquiry of entity staff in tax and compliance functions to identify any instances if non-compliance with laws and regulations;
∙Performing audit work over the risk of management override of controls, including testing of journal entries and otrher adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
∙Reviewing minutes of meetings of those charged with governance;
∙Reviewing financial statement disclosures and testing to support documentation to assess compliance with applicable laws and regulations.
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
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AOTO ELECTRONICS (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AOTO ELECTRONICS (UK) LIMITED (CONTINUED)
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.
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.
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AOTO ELECTRONICS (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AOTO ELECTRONICS (UK) LIMITED (CONTINUED)
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Elizabeth Newell BA(Hons) FCA (Senior statutory auditor)
for and on behalf of
MHA MacIntyre Hudson
Chartered Accountants
Statutory Auditors
Milton Keynes
19 July 2022
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AOTO ELECTRONICS (UK) LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
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Items that will or may be reclassified to profit or loss:
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Total comprehensive income
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The notes on pages 16 to 34 form part of these financial statements.
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AOTO ELECTRONICS (UK) LIMITED
REGISTERED NUMBER: 08622821
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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Trade and other liabilities
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AOTO ELECTRONICS (UK) LIMITED
REGISTERED NUMBER: 08622821
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2021
Issued capital and reserves
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The financial statements on pages 11 to 34 were approved and authorised for issue by the board of director and were signed on its behalf by:
The notes on pages 16 to 34 form part of these financial statements.
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AOTO ELECTRONICS (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 16 to 34 form part of these financial statements.
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Share capital
Share capital comprises the nominal value of shares issued by the company.
Retained earnings
Retained earning comprises the accumalated profits and losses of the company.
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AOTO ELECTRONICS (UK) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
Cash flows from operating activities
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Depreciation of property, plant and equipment
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Movements in working capital:
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Increase in trade and other receivables
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Decrease/(increase) in inventories
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Increase in trade and other payables
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Cash generated from operations
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Net cash (used in)/from operating activities
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Cash flows from investing activities
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Purchases of property, plant and equipment
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Net cash used in investing activities
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Cash flows from financing activities
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Payment of lease liabilities
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Net cash from/(used in) financing activities
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Net cash (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at the beginning of year
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Cash and cash equivalents at the end of the year
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The notes on pages 16 to 34 form part of these financial statements.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1.Accounting policies
Aoto Electronics (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Sovereign Court, 230 Upper Fifth Street, Central Milton Keynes, Bucks, United Kingdom, MK9 2HR and the company's principal place of operations is First Floor, Suite A, Saracen House, Swan Street, Old Isleworth, TW7 6RJ.
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) in conformity with the Companies Act 2006 and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, (except as otherwise stated).
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.
The financial statements have been prepared on a going concern basis, on the assumption that the parent company will continue to support the company.
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1.Accounting policies (continued)
Income tax expense represents deferred tax.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1.Accounting policies (continued)
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Property, plant and equipment
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Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:
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Short-term leasehold property
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Other property, plant and equipment
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Assets under construction
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Impairment of tangible assets
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At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
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Cash and cash equivalents
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Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less from inception, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1.Accounting policies (continued)
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets held at amortised cost
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognizes financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1.Accounting policies (continued)
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1.Accounting policies (continued)
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term and in that case depreciation is charged over the useful life of teh underlying asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
Interest is charged on the lease liability at an even rate on the carrying amount. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the income statement for the period.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Critical accounting estimates and judgments
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2.1 Judgment
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Residual Value of assets
Depreciation is charged on fixed assets to write their value down to their residual value. The company has determined that the residual value of the assets are 10% of the original cost.
The Company has not adopted early any amendments to IFRS. Amendments to IFRSs effective for periods on or after 1 January 2021 and beyond are not expected to have a material impact on the results and financial position of the company.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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The following is an analysis of the Company's revenue for the year from continuing operations:
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Analysis of revenue by country of destination:
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Timing of revenue recognition:
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Goods and services transferred at a point in time
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Goods and services transferred over time
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Fees payable to the company's auditor for audit of the financial statements of the company is £ 5,000 (2020- £5,100).
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Employee benefit expenses
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The average monthly number of persons (including directors) employed by the company during the year was - 5 (2020 - 7), of which 4 (2020 - 5) related to administration employees and 1 (2020 - 2) relating to management employees.
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Employee benefit expenses (including director) comprise:
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Defined contribution pension cost
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None of the directors received any remuneration or pension contributions in respect of their services as directors of the company in the current or preceding financial years.
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The monthly average number of persons, including the director, employed by the Company during the year was as follows:
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Average number of employees
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Finance income and expense
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Recognised in profit or loss
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Leases (interest portion)
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Net finance expense recognised in profit or loss
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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10.1 Income tax recognised in profit or loss
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Origination and reversal of timing differences
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There is no current tax during the year
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Tax expense excluding tax on sale of discontinued operation and share of tax of equity accounted associates and joint ventures
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:
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Income tax credit/expense (including income tax on associate, joint venture and discontinued operations)
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Profit before income taxes
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Tax using the Company's domestic tax rate of 19% (2020:19%)
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
10.Tax expense (continued)
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10.2 Deferred tax balances
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The following is the analysis of deferred tax assets/(liabilities) presented in the statement of financial position:
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Recognised in profit or loss
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Recognised in profit or loss
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Property, plant and equipment
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Accumulated depreciation and impairment
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Charge owned for the year
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Charge owned for the year
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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The cost of inventories expenses during the year is £1,015,969 (2020- £146,341).
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Trade and other receivables
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Receivables from related parties
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Total financial assets other than cash and cash equivalents classified as loans and receivables
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Prepayments and accrued income
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Total trade and other receivables
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Less: current portion - trade receivables
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Less: current portion - prepayments and accrued income
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Less: current portion - other receivables
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Less: current portion - receivables from related parties
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Total non-current portion
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The carrying value of trade and other receivables classified as loans and receivables approximates fair value.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Liquidity risk management
Responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company's funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Market risk management
The company is exposed primarily to the financial risks of changes in foreign currency exchange rates. The company manages market risk through an ongoing system of monitoring.
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The following financial assets are carried
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Trade and other receivables
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The above amount represents the company's maximum exposure to credit risk.
Following an assessment by the directors, no impairment provisions have been recognised
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Payable to related parties
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Other payables - tax and social security payments
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Ordinary shares shares of £1.00 each
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Ordinary shares shares of £1.00 each
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At 1 January and 31 December
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Share capital comprises the nominal value of shares issued by the company.
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At the statement of financial position date the Company had commitments under non-cancellable finance leases as follows:
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Lease liabilities are due as follows:
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Contractual undiscounted cash flows due
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Between one year and five years
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The fair value of the company's lease obligations is £97,726 (2019- £99,512). This is assessed by arriving at the present value of the future lease payments discounting at the interest rates applicable for the respective leases.
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The following amounts in respect of leases have been recognised in profit or loss:
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
19.Leases (continued)
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Interest expense on lease liabilities
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Total loans and borrowings
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Assets held under lease
As at 31 December 2021 the carrying amount of the right of assets is £150,762 (2020- £190,983) and accumalated depreciation is £94,300 (2020- £99,550). The net book value as at the year end is £56,462 (2020- £91,433)
Rental Payments
The Rental Payments made in the year in respct of the lease is £73,641 (2020- £81,699)
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The carrying value of loans and borrowings classified as financial liabilities measured at amortised cost approximates fair value.
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Related party transactions
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The remuneration of the key management personel is disclosed in note 7.
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21.1 Trading transactions
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During the year, group entities entered into the following trading transactions with related parties that are not members of the Group:
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The following balances were outstanding at the end of the reporting period:
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Amounts owed by related parties
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Amounts owed to related parties
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No expense has been recognised in the current or prior years for bad or doubtful debts in respect of the amounts owed by related parties. No guarantees have been given or received.
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Retirement benefit schemes
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Defined contribution schemes
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
The total costs charged to income in respect of defined contribution plans is £1,927 (2020 - £2,258).
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AOTO ELECTRONICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The immediate parent company is Aoto Electronics (Hong Kong) Co., Ltd, a company registered in Hong Kong.
The ultimate parent company is Shenzhen Aoto Electronics Co., Ltd a company registered in China and the registered office is 9-10F. High-Tech Zone, Union Tower, No. 63, Xue Fu Road, Nanshan District, Shenzhen.
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Notes supporting statement of cash flows
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Cash at bank available on demand
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Cash and cash equivalents in the statement of financial position
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Cash and cash equivalents in the statement of cash flows
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Disclosure in respect of the lease liabilities from financing activities
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Net of paid/new lease liability
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