Registered number:
For the year ended
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Company Information
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Contents
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Strategic Report
For the year ended 30 June 2023
The director presents his strategic report for the year ended 30 June 2023.
The Director is pleased with this year's excellent performance despite the challenges seen market wide. The company saw an increase of 18.2% in sales, continuing another year of consecutive revenue growth. Operating profit for the year increased by £1.7m to a profit of £3.6m.
The increase in revenue and profit compared to 2022 reflect that the company was able to continue trading well throughout the year despite the challenges seen in the market. Distribution costs show a decrease of £1.1m which is due to the allocation of shipping and handling fees which are now included in cost of sales. Administration expenses have increased by £255k to support the growth of the company. Staff costs have increased by £56.5k as a result of increased staff numbers and cost of living support provided during the year. Travelling and entertaining costs have increased by £63k as travelling has been able to go ahead again following the Covid pandemic. Sales consultants have been hired to explore new product lines around the electric vehicle charging points, increasing costs by £45k. The company has net assets of £6,853,648 (2022: £3,947,333) as at 30 June 2023 and is in a strong position to build on the successes seen, whilst maintaining the margins achieved. Stocks have increased by £1.8m to support the growth in revenue. Debtors have reduced by £2.9m due to improvements in debt collection and customer payments, with net cash generated from operating activities of £2.1m accounting for the increase seen in the cash and bank balances. The improvements in customer payments and cashflow has led to the decrease in creditors of £1.9m.
The company's principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the company's operations.
In respect of bank balances, the liquidity risk is managed by the continuity of funding. All of the company's cash balances are held in such a way that achieves a competitive rate of interest but with no risk to capital loss. Trade debtors are managed in respect of credit offered to customers and monitoring of amounts outstanding. The amounts presented in the balance sheet are net of allowances for doubtful debtors. Trade creditors liquidity risk is managed by ensuring that sufficient funds are available to meet amounts due. The director has considered the outlook for the UK economy and the impact of high inflation and interest rates when budgeting and considering impacts on trading in the next twelve months.
The key performance indicators in the company are turnover and profitability. Along with debtor days and the stock turnover, these indicators are used to help the directors monitor the performance of the business. The turnover of the company increased from £13.1m in 2022 to £15.4m in 2023. The movements seen have been explained in the Business Review above.
2023 2022 Turnover £15.4m £13.1m Debtor Days 14.7 104.9 Stock turnover 2.1 2.7
Page 1
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Strategic Report (continued)
For the year ended 30 June 2023
This report was approved by the board and signed on its behalf.
Page 2
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Director's Report
For the year ended 30 June 2023
The director presents his report and the financial statements for the year ended 30 June 2023.
The director is responsible for preparing the strategic report, the director's report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the director is required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements 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 Company will continue in business.
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 to enable him to ensure that the financial statements comply with the Companies Act 2006. He is 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 profit for the year, after taxation, amounted to £2,906,315 (2022 - £1,542,451).
No dividend (2022: £8,000) was paid during the year ended 30 June 2023. The directors do not recommend the payment of a dividend.
The director who served during the year was:
The director continues to work closely with the Chinese supplier to source suitable products for the UK market.
Disclosure of Principal risks and uncertainties can be found within the Strategic report.
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Director's Report (continued)
For the year ended 30 June 2023
There have been no significant events affecting the Company since the year end.
Hurst Accountants Limited were appointed as auditors during the year. They 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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Independent Auditors' Report to the Members of Chint Europe (UK) Limited
We have audited the financial statements of Chint Europe (UK) Limited (the 'Company') for the year ended 30 June 2023, which comprise the statement of comprehensive income, the balance sheet, 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).
The company was not audited in the previous period and we did not observe the counting of physical stocks at the beginning of the period. We were unable to satisfy ourselves by alternative means concerning stock quantities held at 30 June 2022. Since opening stocks enter into the determination of the financial performance, we were unable to determine whether adjustments might have been necessary in respect of the loss for the period reported in the statement of income and retained earnings.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.
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Independent Auditors' Report to the Members of Chint Europe (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 director is 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.
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.
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.
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Independent Auditors' Report to the Members of Chint Europe (UK) 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:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
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 local 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 Antibribery 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 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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Independent Auditors' Report to the Members of Chint Europe (UK) 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.
∙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.
Comparative information in the financial statements is derived from the company's prior period financial statements which were not audited.
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
Lancashire Gate
21 Tiviot Dale
SK1 1TD
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Statement of Comprehensive Income
For the year ended 30 June 2023
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Balance Sheet
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 25 form part of these financial statements.
Page 10
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Statement of Changes in Equity
For the year ended 30 June 2023
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Statement of Cash Flows
For the year ended 30 June 2023
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Analysis of Net Debt
For the year ended 30 June 2023
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Notes to the Financial Statements
For the year ended 30 June 2023
Chint Europe (UK) Limited is a private company limited by shares and is incorporated in the United Kingdom, company number 05058286. The address of the registered office is Units 9 & 11 Spark Business Park, Hamilton Road, Stockport, Greater Manchester, SK1 2AE.
The principal activity of the company during the year continued to be that of wholesale of electrical parts and equipment.
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 judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
Functional and presentation currency
Transactions and balances
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Notes to the Financial Statements
For the year ended 30 June 2023
2.Accounting policies (continued)
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Notes to the Financial Statements
For the year ended 30 June 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
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.
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Notes to the Financial Statements
For the year ended 30 June 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the balance sheet.
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Notes to the Financial Statements
For the year ended 30 June 2023
2.Accounting policies (continued)
The whole of the turnover is attributable to the principal activity of the company.
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Notes to the Financial Statements
For the year ended 30 June 2023
Page 19
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Notes to the Financial Statements
For the year ended 30 June 2023
Page 20
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Notes to the Financial Statements
For the year ended 30 June 2023
Page 21
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Notes to the Financial Statements
For the year ended 30 June 2023
11.Taxation (continued)
The corporation tax rate is expected to remain at 25% for those companies exceeding £250,000 profits. The rate is 19% for those companies with profits of £50,000 or less, while those with profits £50,000-£250,000 will pay the 25% rate reduced by a marginal relief.
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Notes to the Financial Statements
For the year ended 30 June 2023
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Notes to the Financial Statements
For the year ended 30 June 2023
Page 24
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Notes to the Financial Statements
For the year ended 30 June 2023
Profit and loss account
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately to 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 £18,495 (2022: £16,972). Contributions totalling £3,998 (2022: £3,246) were payable to the fund at the balance sheet date and are included in creditors.
The ultimate controlling party is H Zheng.
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