Company registration number 02681003 (England and Wales)
VTECH COMMUNICATIONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
VTECH COMMUNICATIONS LIMITED
COMPANY INFORMATION
Directors
Hoi Cheung
Yu Wai Chang
Ka Hung Tong
Secretary
Gary Jesson
Company number
02681003
Registered office
12 Napier Court Barton Lane
Abingdon Science Park
Abingdon
Oxfordshire
England
OX14 3YT
Auditor
Azets Audit Services
Suites B & D
Burnham Yard
Beaconsfield
Bucks
HP9 2JH
VTECH COMMUNICATIONS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 19
VTECH COMMUNICATIONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 1 -
The directors present the strategic report for the year ended 31 March 2022.
Fair review of the business
The directors consider the performance of the company to be satisfactory and expect future results to be similar. The company has continued to provide marketing services to the parent undertaking on a cost-plus fixed margin basis. Costs have remained constant with prior years.
The subsidiaries continue to have positive results. The directors expect to maintain this in future years.
Principal risks and uncertainties
For the trading activity the company is dependent on the support of the parent undertaking. The risks and key
performance indicators relevant to the company are managed on a group basis by the parent company.
The principal risk to the business relates to the carrying value of the investment in subsidiaries held as these
represent a significant proportion of the assets and income of the company. This risk is managed on an ongoing
basis by the directors to ensure that sufficient profit and cash is generated. At the reporting date the directors
assessed the company's interest in subsidiaries for impairment. No impairment losses were recognised.
Section 172(1) statement
The directors of the company note that they have a duty to promote the success of the company for the benefit
of the company’s shareholders, having regard to a number of broader matters including the likely long term
consequences of decisions, and the company’s wider relationships. In this regard, the board:
-
considers on an annual basis the key business activities and the likely long term consequences of any
key decisions;
-
ensures employees are regularly engaged through annual reviews to discuss employee performance,
suitability and interest;
-
ensures the company maintains strong business relationships with suppliers, customers and others;
-
ensures the company’s operations do not have a negative impact on the community and environment;
and
-
ensures, through the company’s policies and procedures, that the desired high standards of business
conduct prevail across all functions.
The following is an overview of how the directors have performed their duties in this regard during the year.
Employees
The company's employees are considered integral to the successful performance of the business. The directors receive feedback on matters relating to employees through staff surveys and staff meetings. This feedback is then used by the directors reviewing human resources policies to ensure the right culture is in place to meet the goals of the employees and the business.
Business Relationships
How the directors' performed their duties with regard to business relationships is set out in the Directors' report.
Hoi Cheung
Director
19 December 2022
VTECH COMMUNICATIONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2022.
Principal activities
The principal activity of the company during the year were to provide marketing services to VTech Telecommunications Limited, its immediate holding company based in Hong Kong, and to act as an intermediate holding company.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid (2021:£Nil). 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:
Hoi Cheung
Yu Wai Chang
Ka Hung Tong
Future developments
The directors do not expect the company's principal activity to change from that of providing marketing and holding company services to VTech Telecommunication Limited.
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
Financial risk management objectives and policies
The company is dependent on the support of the parent undertaking. The risks and key performance indicators relevant to the company are managed on a group basis by the parent company.
Carbon and energy reporting
The company is considered a low energy consumer with the UK usage being below 40,000 kWh of energy thus no additional disclosure has been made.
On behalf of the board
Hoi Cheung
Director
19 December 2022
VTECH COMMUNICATIONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2022
- 3 -
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;
-
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.
VTECH COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VTECH COMMUNICATIONS LIMITED
- 4 -
Opinion
We have audited the financial statements of VTech Communications Limited (the 'company') for the year ended 31 March 2022 which comprise the statement of comprehensive income, 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 Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2022 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 strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
VTECH COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VTECH COMMUNICATIONS LIMITED
- 5 -
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 strategic report and the directors'
r
eport
. 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
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit; or
-
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report.
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
.
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.
VTECH COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VTECH COMMUNICATIONS LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
-
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
-
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the
entity
through enquiry and inspection;
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
-
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
David Green MA (Cantab) ACA (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
19 December 2022
Chartered Accountants
Statutory Auditor
Suites B & D
Burnham Yard
Beaconsfield
Bucks
HP9 2JH
VTECH COMMUNICATIONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
- 7 -
2022
2021
Notes
£
£
Turnover
3
835,152
609,872
Administrative expenses
(765,552)
(573,418)
Other operating income
150
3,685
Operating profit
4
69,750
40,139
Interest payable and similar expenses
7
(208)
Profit before taxation
69,542
40,139
Tax on profit
8
(6,764)
Profit for the financial year
62,778
40,139
The income statement has been prepared on the basis that all operations are continuing operations.
VTECH COMMUNICATIONS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2022
31 March 2022
- 8 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
226
563
Investments
10
11,514,737
11,514,737
11,514,963
11,515,300
Current assets
Debtors
12
278,761
244,191
Cash at bank and in hand
54,069
33,723
332,830
277,914
Creditors: amounts falling due within one year
13
(101,827)
(110,026)
Net current assets
231,003
167,888
Net assets
11,745,966
11,683,188
Capital and reserves
Called up share capital
16
11,410,000
11,410,000
Profit and loss reserves
335,966
273,188
Total equity
11,745,966
11,683,188
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 19 December 2022 and are signed on its behalf by:
Hoi Cheung
Director
Company Registration No. 02681003
VTECH COMMUNICATIONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2020
11,410,000
233,049
11,643,049
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
40,139
40,139
Balance at 31 March 2021
11,410,000
273,188
11,683,188
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
62,778
62,778
Balance at 31 March 2022
11,410,000
335,966
11,745,966
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
- 10 -
1
Accounting policies
Company information
VTech Communications Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
12 Napier Court Barton Lane, Abingdon Science Park, Abingdon, Oxfordshire, England, OX14 3YT.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues
:
The
disclosure
requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
-
Section 26 ‘Share based Payment’
:
Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
VTech Holdings Limited
. These consolidated financial statements are available from its registered office,
23rd Floor, Tai Ping Industrial Centre, Block 1, 57 Ting Kok Road, Tai Po, New Territories, Hong Kong.
The company has taken advantage of the exemption under section 40
1
of the
Companies Act 2006 not to prepare consolidated accounts. The
financial statements
present information about the company as an individual entity and not about its group
.
The company is an indirect wholly owned subsidiary of VTech Holdings Limited and the results of the company are included in the consolidated financial statements of that company which are available from the address shown above.
1.2
Going concern
The financial statements have been prepared on a going concern basis as the company's parent undertaking VTech Holdings Limited has confirmed its intention to provide such support to the company as is necessary to enable it to continue to trade for the foreseeable future. The directors have confirmed that the wider financial position of the group is sound. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
true
1.3
Turnover
Turnover represents a recharge of expenses plus 7% to VTech Telecommunications Limited, the immediate holding company.
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 11 -
Other income
Dividend income from investments in subsidiaries is recognised when the company's right to receive payment is established.
1.4
Tangible fixed assets
Tangible fixed assets
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:
Computers
3 years
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 credited or charged to profit or loss
.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in
profit
or
loss
.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.6
Impairment of fixed assets
At each reporting
period
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.
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 12 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. 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.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
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 instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 13 -
1.10
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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing 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.
1.11
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 stock or
fixed 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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
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.
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 14 -
2
Judgements and key sources of estimation uncertainty
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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Carrying value of investments
The company reviews each of its subsidiary undertakings for indicators of impairment at each reporting date and makes an estimate of the recoverability value of its investments. The company considers indicators of impairment such as profitability, cash generation and future trading of subsidiary undertakings.
The carrying value of investments in subsidiary undertakings at the reporting date was £11,514,737 (2021: £11,514,737). No impairment losses have been recognised in respect of investments in subsidiaries.
Apart from the above, the directors do not consider there to be any critical judgements or source of estimation uncertainty that need to be brought to the attention of the users of the accounts.
3
Turnover
2022
2021
£
£
Turnover analysed by class of business
Marketing services
834,085
608,329
Sale of goods
1,067
1,543
835,152
609,872
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
337
337
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 15 -
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
11,000
7,600
For other services
Taxation compliance services
1,000
2,550
All other non-audit services
2,000
3,375
3,000
5,925
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Research and development
1
1
Marketing
2
2
Directors
3
3
Total
6
6
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
307,365
304,777
Social security costs
26,524
41,406
Pension costs
27,809
27,398
361,698
373,581
The directors of the company have been remunerated for their services through other group companies however any allocation between companies would be notional. Therefore, their remuneration has been disclosed in the financial statements of the relevant company from which the remuneration is received.
7
Interest payable and similar expenses
2022
2021
£
£
Other interest
208
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 16 -
8
Taxation
2022
2021
£
£
Deferred tax
Origination and reversal of timing differences
6,764
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
69,542
40,139
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
13,213
7,626
Tax effect of expenses that are not deductible in determining taxable profit
54
Unutilised tax losses carried forward
(8,169)
(8,015)
Permanent capital allowances in excess of depreciation
1,718
Provisions tax adjustment
2
335
Taxation charge for the year
6,764
-
9
Tangible fixed assets
Computers
£
Cost
At 1 April 2021 and 31 March 2022
9,267
Depreciation and impairment
At 1 April 2021
8,704
Depreciation charged in the year
337
At 31 March 2022
9,041
Carrying amount
At 31 March 2022
226
At 31 March 2021
563
10
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
11
11,514,737
11,514,737
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 17 -
11
Subsidiaries
Details of the company's subsidiaries at 31 March 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
VTech Technologies Canada Ltd.
Canada
Class A Common Voting Shares
100.00
-
VTech Technologies Canada Ltd.
Canada
Class B Common Non-Voting Shares
100.00
-
Snom Technology GmbH
Germany
Ordinary
100.00
-
Snom Technology Ltd
Taiwan
Ordinary
0
100.00
Snom Solutions GmbH
Germany
Ordinary
0
100.00
12
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
583
Amounts owed by group undertakings
244,742
206,657
Other debtors
9,955
6,647
Prepayments and accrued income
828
304
255,525
214,191
2022
2021
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 14)
23,236
30,000
Total debtors
278,761
244,191
13
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
15,599
9,083
Amounts owed to group undertakings
45,216
44,010
Taxation and social security
13,923
31,440
Accruals and deferred income
27,089
25,493
101,827
110,026
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 18 -
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2022
2021
Balances:
£
£
Accelerated capital allowances
23,236
30,000
2022
Movements in the year:
£
Asset at 1 April 2021
(30,000)
Charge to profit or loss
6,764
Asset at 31 March 2022
(23,236)
The deferred tax asset set out above is expected to reverse within 36 months and related to the utilisation of tax losses against future expected profits of the same period.
Deferred tax is not recognised in respect of losses of £1,894,290 (2021: £1,929,554) as it is not probable that they will be recovered against future taxable profits.
15
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
27,809
27,398
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.
Contributions totalling £3,623 (2021: £2,389) were payable to the fund at the year end and are included in creditors.
16
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
11,410,000
11,410,000
11,410,000
11,410,000
The company has one class of ordinary shares which carry no right to fixed income.
VTECH COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 19 -
17
Reserves
Profit and loss reserves
Cumulative profit and loss net of distributions to owners.
18
Ultimate controlling party
The immediate parent company is VTech Telecommunications Limited, a company registered in Hong Kong. The ultimate parent company is VTech Holdings Limited, a company incorporated in Bermuda.
The larges and smallest group into which the results of the company are considered is that headed by VTech Holdings Limited, incorporated in Bermuda. The consolidated accounts for the group are available to the public and can be obtained from 23rd Floor, Tai Ping Industrial Centre, Block 1, 57 Ting Kok Road, Tai Po, New Territories, Hong Kong.
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