Company Registration No. 02928736 (England and Wales)
ALCO FILTERS (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
ALCO FILTERS (UK) LIMITED
COMPANY INFORMATION
Directors
Mr L Louca
Mr M Mongan
Secretary
Mr L Louca
Company number
02928736
Registered office
12 Siddeley Way
Royal Oak Industrial Estate
Daventry
Northamptonshire
NN11 8PA
Auditor
Cottons Accountants LLP
The Stables
Church Walk
Daventry
Northamptonshire
NN11 4BL
ALCO FILTERS (UK) LIMITED
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 6
Income statement
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
ALCO FILTERS (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be that of the sale and distribution of automotive filters.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr L Louca
Mr M Mongan
Auditor
The auditor, Cottons Accountants LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements 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; and
-
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 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
ALCO FILTERS (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
On behalf of the board
Mr M Mongan
Director
23 May 2022
ALCO FILTERS (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ALCO FILTERS (UK) LIMITED
- 3 -
Opinion
We have audited the financial statements of Alco Filters (Uk) Limited
(the 'company')
for the year ended 31 December 2021 which comprise the income statement, the statement of financial position, the statement of changes in equity and
notes to the financial statements, including significant accounting policies
. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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
Auditor's
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 UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the directors' report has been prepared in accordance with applicable legal requirements.
ALCO FILTERS (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ALCO FILTERS (UK) LIMITED
- 4 -
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 identifie
d
material misstatements in the directors'
r
eport
.
We have nothing to report in respect of the following matters where 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
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors
either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
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
.
ALCO FILTERS (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ALCO FILTERS (UK) LIMITED
- 5 -
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the computer component manufacturing and supply sector;
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including Companies Act 2006 and health and safety legislation;
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations;
To address the risk of fraud through management bias and override of controls, we:
- performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries to identify unusual transactions;
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;
- investigated the rationale behind significant or unusual transactions;
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- reading the minutes of meetings of those charged with governance;
- enquiring of management as to actual and potential litigation and claims;
- reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors;
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
ALCO FILTERS (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ALCO FILTERS (UK) LIMITED
- 6 -
A further description of our responsibilities is available on the
Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our
auditor's
report.
This report is made solely to the company’s member 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 member those matters we are required to state to the member 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 member for our audit work, for this report, or for the opinions we have formed.
Richard Wilch FCCA (Senior Statutory Auditor)
For and on behalf of Cottons Accountants LLP
23 May 2022
Chartered Accountants
Statutory Auditor
The Stables
Church Walk
Daventry
Northamptonshire
NN11 4BL
ALCO FILTERS (UK) LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
2021
2020
Notes
£
£
Revenue
2
1,260,956
1,219,290
Cost of sales
(883,295)
(853,164)
Gross profit
377,661
366,126
Distribution costs
(83,415)
(70,332)
Administrative expenses
(230,218)
(227,267)
Operating profit
3
64,028
68,527
Finance costs
6
(365)
-
Profit before taxation
63,663
68,527
Tax on profit
7
(13,510)
(9,435)
Profit and total comprehensive income for the financial year
18
50,153
59,092
ALCO FILTERS (UK) LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2021
31 December 2021
- 8 -
2021
2020
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
8
440,282
434,529
Current assets
Inventories
9
240,437
267,598
Trade and other receivables
10
238,117
234,141
Cash and cash equivalents
104,203
66,325
582,757
568,064
Current liabilities
11
(401,645)
(451,296)
Net current assets
181,112
116,768
Total assets less current liabilities
621,394
551,297
Non-current liabilities
11
(6,434)
Provisions for liabilities
Deferred tax liabilities
14
(22,945)
(9,435)
Net assets
592,015
541,862
Equity
Called up share capital
16
500,000
500,000
Revaluation reserve
17
218,215
218,215
Retained earnings
18
(126,200)
(176,353)
Total equity
592,015
541,862
The financial statements were approved by the board of directors and authorised for issue on 23 May 2022 and are signed on its behalf by:
Mr L Louca
Mr M Mongan
Director
Director
Company Registration No. 02928736
ALCO FILTERS (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
Share capital
Revaluation reserve
Retained earnings
Total
£
£
£
£
Balance at 1 January 2020
500,000
257,140
(274,370)
482,770
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
59,092
59,092
Transfers
-
38,925
38,925
Revaluation
-
(38,925)
-
(38,925)
Balance at 31 December 2020
500,000
218,215
(176,353)
541,862
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
50,153
50,153
Balance at 31 December 2021
500,000
218,215
(126,200)
592,015
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
1
Accounting policies
Company information
Alco Filters (Uk) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 12 Siddeley Way, Royal Oak Industrial Estate, Daventry, Northamptonshire, NN11 8PA.
The company's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
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 under the historical cost convention. The principal accounting policies adopted are set out below.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
-
inclusion of an explicit and unreserved statement of compliance with IFRS;
-
presentation of a statement of cash flows and related notes;
-
disclosure of the objectives, policies and processes for managing capital;
-
disclosure of key management personnel compensation;
-
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
-
the effect of financial instruments on the statement of comprehensive income;
-
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment, intangible assets, investment property and biological assets;
-
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
-
a reconciliation of the number and weighted average exercise prices of share options, how the fair value of share-based payments was determined and their effect on profit or loss and the financial position;
-
comparative narrative information;
-
for financial instruments, investment property and biological assets measured at fair value and within the scope of IFRS 13, the valuation techniques and inputs used to measure fair value, the effect of fair value measurements with significant unobservable inputs on the result for the period and the impact of credit risk on the fair value; and
-
related party disclosures for transactions with the parent or wholly owned members of the group.
Where required, equivalent disclosures are given in the group accounts of ALCO Filters Cyprus Ltd. The group accounts of ALCO Filters Cyprus Ltd are available to the public and can be obtained from ALCO Filters Cyprus Ltd, 34 Tripoleos Street, 2235 Latsia, Cyprus.
1.2
Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the
true
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 11 -
1.3
Revenue
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.
1.4
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold property
2% on cost
Fixtures and fittings
10% on cost
Plant and equipment
10% on cost
Computers
20% on cost
Motor vehicles
33.3% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the
income statement
.
1.5
Impairment of tangible and intangible assets
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 12 -
1.6
Inventories
Inventories
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the
inventories
to their present location and condition.
Inventories
held for distribution at no or nominal consideration are measured
at
the lower of cost and replacement cost,
adjusted where applicable for any loss of service potential.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
1.7
Cash and cash equivalents
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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial assets
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 at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.
Impairment of financial assets
Financial assets, other than those
measured
at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
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.
1.9
Financial liabilities
The company recogni
s
es 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
'
.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as
measured at
fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:
-
it has been incurred principally for the purpose of
repurchasing it in the near term, or
-
on initial recognition it is part of a portfolio of identified financial instruments that the
manages together and has a recent actual pattern of short-term profit taking, or
-
it is a derivative that is not
designated and effective hedging instrument.
Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or
loss
.
Other financial liabilities
Other financial liabilities, including borrowings
, t
rade 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.
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
income statement
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date 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 is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
income statement
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
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
.
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
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 is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. 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.
The lease liability is measured at amortised cost using the effective interest method. 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.
1.15
Foreign exchange
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 in the period are included in profit or loss.
2
Revenue
2021
2020
£
£
Revenue analysed by class of business
United Kingdom
1,260,956
1,219,290
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 16 -
3
Operating profit
2021
2020
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
823
(2,410)
Fees payable to the company's auditor for the audit of the company's financial statements
4,600
4,600
Depreciation of property, plant and equipment
14,226
12,224
Cost of inventories recognised as an expense
882,472
855,574
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Administrative
2
2
Warehouse
4
3
Total
6
5
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
127,030
116,805
Social security costs
8,168
7,460
Pension costs
2,147
1,863
137,345
126,128
5
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
57,195
42,977
Company pension contributions to defined contribution schemes
1,021
1,019
58,216
43,996
6
Finance costs
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Other interest payable
365
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 17 -
7
Taxation
2021
2020
£
£
Deferred tax
Origination and reversal of temporary differences
13,510
9,435
The charge for the year can be reconciled to the profit per the income statement as follows:
2021
2020
£
£
Profit before taxation
63,663
68,527
Expected tax charge based on a corporation tax rate of 19.00% (2020: 19.00%)
12,096
13,020
Effect of expenses not deductible in determining taxable profit
2,064
2,323
Utilisation of tax losses not previously recognised
(12,820)
(15,230)
Permanent capital allowances in excess of depreciation
(1,200)
(113)
Deferred taxation
13,370
9,435
Taxation charge for the year
13,510
9,435
8
Property, plant and equipment
Freehold property
Fixtures and fittings
Plant and equipment
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 31 December 2020
445,000
1,095
31,156
16,689
493,940
Additions
4,858
15,121
19,979
At 31 December 2021
445,000
1,095
36,014
16,689
15,121
513,919
Accumulated depreciation and impairment
At 31 December 2020
17,800
1,095
24,612
15,904
59,411
Charge for the year
8,900
1,732
234
3,360
14,226
At 31 December 2021
26,700
1,095
26,344
16,138
3,360
73,637
Carrying amount
At 31 December 2021
418,300
9,670
551
11,761
440,282
At 31 December 2020
427,200
6,544
785
434,529
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
8
Property, plant and equipment
(Continued)
- 18 -
The carrying value of land and buildings comprises:
2021
2020
£
£
Freehold property
418,300
427,200
Property, plant and equipment includes right-of-use assets, as follows:
Right-of-use assets
2021
2020
£
£
Net values
Motor vehicles
11,761
-
Depreciation charge for the year
Motor vehicles
3,360
-
Freehold land and buildings were valued on an open market basis on 13 February 2019 by Howkins & Harrison (RICS standards).
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Freehold property
2021
2020
£
£
Cost
216,810
216,810
Accumulated depreciation
(36,786)
(32,450)
Carrying value
180,024
184,360
9
Inventories
2021
2020
£
£
Finished goods
240,437
267,598
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
10
Trade and other receivables
2021
2020
£
£
Trade receivables
234,033
231,388
Prepayments and accrued income
4,084
2,753
238,117
234,141
11
Liabilities
Current
Non-current
2021
2020
2021
2020
Notes
£
£
£
£
Trade and other payables
12
391,681
375,335
Taxation and social security
5,375
75,961
Lease liabilities
13
4,589
-
6,434
-
401,645
451,296
6,434
-
12
Trade and other payables
2021
2020
£
£
Trade payables
17,238
16,882
Amount owed to parent undertaking
359,653
354,152
Accruals and deferred income
14,281
3,979
Other payables
509
322
391,681
375,335
13
Lease liabilities
2021
2020
Maturity analysis
£
£
Within one year
4,968
-
In two to five years
6,625
-
Total undiscounted liabilities
11,593
-
Future finance charges and other adjustments
(570)
-
Lease liabilities in the financial statements
11,023
-
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
13
Lease liabilities
(Continued)
- 20 -
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2021
2020
£
£
Current liabilities
4,589
-
Non-current liabilities
6,434
-
11,023
-
Other leasing information is included in note .
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
ACAs
Tax losses
Revaluations
Total
£
£
£
£
Deferred tax balance at 1 January 2020
Deferred tax movements in prior year
Charge/(credit) to profit or loss
1,393
(30,883)
38,925
9,435
Deferred tax liability at 1 January 2021
1,393
(30,883)
38,925
9,435
Deferred tax movements in current year
Charge/(credit) to profit or loss
550
12,960
-
13,510
Deferred tax liability at 31 December 2021
1,943
(17,923)
38,925
22,945
15
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
2,147
1,863
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.
ALCO FILTERS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
16
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Authorised
Ordinary of £1 each
500,000
500,000
500,000
500,000
Issued and fully paid
Ordinary of £1 each
500,000
500,000
500,000
500,000
17
Revaluation reserve
2021
2020
£
£
At the beginning of the year
218,215
257,140
Transfer to retained earnings
-
(38,925)
At the end of the year
218,215
218,215
18
Retained earnings
2021
2020
£
£
At the beginning of the year
(176,353)
(274,370)
Profit for the year
50,153
59,092
Transfer from revaluation reserve
38,925
At the end of the year
(126,200)
(176,353)
19
Controlling party
ALCO Filters Cyprus Ltd (incorporated in Cyprus) is regarded by the directors as being the company's ultimate parent company.
20
Auditor's liability limitation agreement
Upon appointment of Cottons Accountants LLP as auditors, the company entered into a limitation liability agreement with the auditors and this was approved by resolution on 3rd March
2022. Liability is limited to the lesser of 20 times the audit fee or £92,000. In accordance with section 537 of CA06, the effect of the liability limitation agreement is to limit the auditor's liability to less than such amount as is fair and reasonable, as determined by that section, the agreement shall have effect as if it limited the liability to such amount as is fair and reasonable, as so determined.
The agreement limits the liability owed to the company by the auditors in respect of any negligence, default or breach of duty, or breach of trust, occurring in the course of the audit of the accounts for the year ending 31st
December
2021.
The agreement does not limit liability for any instance of fraud or dishonesty on behalf of the auditor or any other liability that cannot be excluded or restricted by applicable laws or regulations.
2021-12-31
2021-01-01
Mr M Mongan
Mr M Mongan
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