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REGISTERED NUMBER: 07993185 (England and Wales)















Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2023

for

Ginho Europe Precision Manufacturing Co
Ltd

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)






Contents of the Financial Statements
for the Year Ended 31 December 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 5

Statement of Directors' Responsibilities 6

Report of the Independent Auditors 7

Statement of Comprehensive Income 10

Statement of Financial Position 11

Statement of Changes in Equity 12

Notes to the Financial Statements 13


Ginho Europe Precision Manufacturing Co
Ltd

Company Information
for the Year Ended 31 December 2023







DIRECTORS: S Gray
S Zhang





REGISTERED OFFICE: Unit D1 Third Avenue
Centrum 100
Burton-On-Trent
United Kingdom
DE14 2WD





REGISTERED NUMBER: 07993185 (England and Wales)





AUDITORS: Shinewing Wilson Accountancy Limited
Chartered Certified Accountants
and Statutory Auditors
9 St Clare Street
London
EC3N 1LQ

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Strategic Report
for the Year Ended 31 December 2023

The directors present their strategic report for the year ended 31 December 2023.

REVIEW OF BUSINESS
The profit for the period, after taxation, amounted to £249,222 (2022 - £298,718).

FINANCIAL KEY PERFORMANCE INDICATORS

2023 £ 2022 £
Turnover 20,627,763 18,806,095
Gross profit 1,614,487 1,600,274
PBT 331,898 373,109
Net assets 1,126,423 877,201

Ginho Europe Precision Manufacturing (GHE) has continued to perform well in 2023, the company performed within the expectations of the customer and market forecast with continued growth in sales and profits.

During 2023 we won some significant new projects that enter in SOP during 2024, our future pipe line for 2024 is strong and presents opportunities in both existing and new markets for our continued growth.

We advance sales this year having a greater focus on the sales reports, margin management and KPI's. The markets we operate in continued to grow. The new Euro 7 rules have presented a strong market demand for new components and projects. We continue to look at alternative components within the automotive sector as well as investigate alternative sectors that will give us continued growth in the coming years.

We continues to monitor the current issue with the Suez Canal, the impact of additional shipping lead time has already been accounted for within our logistics planning and the increases in cost have started to stabilise and we expect to see them flatten or reduce slightly within 2024.

We continued to monitor our KPI's drive efficiencies in our systems and processes. We have completed the migration of our SAGE system to the cloud. This brings additional flexibility allowing access to other group subsidiaries and GHE for remote working and faster connections.

We have engaged with a data processing company to streamline our processes and reporting systems so they are live and more automated, this will bring additional efficiencies to all areas of the business giving real time reporting, cost control and stock control.

During 2024 we will further migrate our server drives and files to the cloud to allow more remote access and shared files so the team can work more effectively globally.

Quality of products and services remained stable and we are meeting all our customer expectations and in the top 95% of quality ratings.


Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Strategic Report
for the Year Ended 31 December 2023

PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the company's strategy are subject to a number of risks.

The high inflationary pressures and labour market have eased significantly within the economy and the automotive sector. In 2023 we strengthened the management team with the addition of a new role for European Quality Manager, European Quality Engineer and also a new Supply Chain Manager.

Price risk

The raw material prices and volatility in the currency markets have stabilised and remained stable in 2023. We expect to see a material prices and exchange rates to remain stable during 2024.

The long-term order book remained stable and the price mechanisms allowed GHE to remain competitive and increase our profitability in 2023. We have also seen a reduction in our purchase cost helping to drive profits upward in 2023.

Credit risk

The company's operations expose it to a variety of financial risks that include the effects of changes in price risk, credit risk, liquidity risk and interest rate cash flow risk. The company has in place appropriate risk management policies that seeks to monitor the key financial risks.

All customers and suppliers are credit checked so we can asses the financial stability of them and reduce our risk to any bad debts. During 2023 we had zero bad debts.

Liquidity risk

The liquidity risk remains low as we have robust budgeting, cashflow and balance sheet forecasting that is monitored and review each month within our management accounts.

Interest rate and cash flow risk

The companies exposure to interest rates and cash flow remain low, we have no external funding and cash flow remains positive.

HEALTH AND SAFETY
Employment remained stable with the addition of 2 new roles and staff training for progression of internal appointments to help maintain the high levels of customer service and provide support to our parent company.

The Company continued to strengthen and further develop our integrated management system in relation to ISO 9001. Health and safety and 5S remained at the forefront of our activities with zero reportable accidents.

LEGAL AND ETHICAL
The company recognises and supports the need for a legal and ethical framework across geographical and political regions and has continued to make improvements and enhancements in this area. The company remains abreast of relevant legal and regulatory instruments, being cognisant of packaging and transportation regulations.


Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Strategic Report
for the Year Ended 31 December 2023

FUTURE DEVELOPMENTS
The outlook for 2024 remains strong with a year of growth forecast. The need for a larger facility to allow the continued growth and to expand our services has now been approved by the board and our preferred site has been chosen, we will move forward in 2024 with contract negotiations and the start of construction. The aim is to move to the new facility in summer 2025.

ON BEHALF OF THE BOARD:





S Gray - Director


2 April 2024

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Report of the Directors
for the Year Ended 31 December 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of the sale of metal components from the Chinese parent company to European customers.

DIVIDENDS
No dividends will be distributed for the year ended 31 December 2023. (2022: Nil)

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

S Gray
S Zhang

DISCLOSURE IN THE STRATEGIC REPORT
The company has chosen to disclose information regarding the future development opportunities for the company and financial instrument risk management policies in the strategic report rather than the directors' report.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
The auditors, Shinewing Wilson Accountancy Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





S Gray - Director


2 April 2024

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Statement of Directors' Responsibilities
for the Year Ended 31 December 2023

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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;
-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.

Report of the Independent Auditors to the Members of
Ginho Europe Precision Manufacturing Co
Ltd

Opinion
We have audited the financial statements of Ginho Europe Precision Manufacturing Co Ltd (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 December 2023 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.

Basis for opinion
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 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.

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Ginho Europe Precision Manufacturing Co
Ltd


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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 directors' 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 Statement of Directors' Responsibilities set out on page six, 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 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.

Report of the Independent Auditors to the Members of
Ginho Europe Precision Manufacturing Co
Ltd


Auditors' 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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:
- Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law and Tax legislation.
- It is considered that there are laws and regulations for which non-compliance may be fundamental to the operating aspects of the business include ISO9001 and health and safety.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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 Report of the Auditors.

Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.




Julie Zhuge Wilson (Senior Statutory Auditor)
for and on behalf of Shinewing Wilson Accountancy Limited
Chartered Certified Accountants
and Statutory Auditors
9 St Clare Street
London
EC3N 1LQ

2 April 2024

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Statement of Comprehensive Income
for the Year Ended 31 December 2023

31.12.23 31.12.22
Notes £    £   

TURNOVER 4 20,627,763 18,806,095

Cost of sales 19,013,276 17,205,821
GROSS PROFIT 1,614,487 1,600,274

Administrative expenses 1,282,589 1,227,238
OPERATING PROFIT 6 331,898 373,036

Interest receivable and similar income - 73
PROFIT BEFORE TAXATION 331,898 373,109

Tax on profit 7 82,676 74,391
PROFIT FOR THE FINANCIAL YEAR 249,222 298,718

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

249,222

298,718

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Statement of Financial Position
31 December 2023

31.12.23 31.12.22
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 8 - -
Tangible assets 9 55,023 36,074
55,023 36,074

CURRENT ASSETS
Stocks 10 4,308,846 4,520,787
Debtors 11 4,596,903 3,694,312
Cash at bank and in hand 265,505 222,557
9,171,254 8,437,656
CREDITORS
Amounts falling due within one year 12 8,099,854 7,596,529
NET CURRENT ASSETS 1,071,400 841,127
TOTAL ASSETS LESS CURRENT
LIABILITIES

1,126,423

877,201

CAPITAL AND RESERVES
Called up share capital 14 472,270 472,270
Retained earnings 654,153 404,931
SHAREHOLDERS' FUNDS 1,126,423 877,201

The financial statements were approved by the Board of Directors and authorised for issue on 2 April 2024 and were signed on its behalf by:





S Gray - Director


Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Statement of Changes in Equity
for the Year Ended 31 December 2023

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 January 2022 472,270 106,213 578,483

Changes in equity
Total comprehensive income - 298,718 298,718
Balance at 31 December 2022 472,270 404,931 877,201

Changes in equity
Total comprehensive income - 249,222 249,222
Balance at 31 December 2023 472,270 654,153 1,126,423

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Notes to the Financial Statements
for the Year Ended 31 December 2023

1. STATUTORY INFORMATION

Ginho Europe Precision Manufacturing Co Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern
The company meets its day-to-day working capital requirements through its cash reserves. The current economic conditions continue to create uncertainty, particularly over the level of demand for the company’s products. The company’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be able to operate within the level of its current cash reserves. After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirements of Section 7 Statement of Cash Flows.

Exemption from preparing cash flow statements
The company qualifies for exemption from preparing cash flow statements as a member of a group where the ultimate parent Ginho Precision Manufacturing Public Ltd prepares publicly available consolidated financial statements which are intended to give a true and fair view and include the company. Copies of these group financial statements can be obtained from website http://www.szse.cn/certificate/secondb/.

Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts and settlement discounts.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, 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.

Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of comprehensive income over its useful economic life. The Directors have assessed the economic benefit of goodwill to be five years.

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Tangible fixed assets
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:


Fixtures and fittings for short term leasehold propertyOver the period of the lease
Plant and machinery -15% on cost
Motor vehicles - 33% on cost
Fixtures and fittings - 20% on cost
Computer equipment- 20-33% on cost

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 the Statement of Comprehensive Income.

Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Stocks are recognised as an expense in the period in which the related revenue is recognised. Cost is based on the cost of purchase on a first in and first out basis.

At the end of each reporting period stocks are assessed for impairment. If an item of inventory is impaired, the identified inventory is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is recognised the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the Statement of Comprehensive Income.

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Financial instruments
The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' of FRS 102 to all of its financial instruments.

Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets
Basic financial assets, which include trade and other receivables 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 financial asset is measured at the present value of the future receipts discounted at a market rate of interest.

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 trade and other payables, and loans from group undertakings, 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 payments discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest method.

Share capital
Financial instruments issued by the company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset.

The company's ordinary shares are classified as equity instruments.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Leasing commitments - company as lessee
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.

The directors consider that the following estimate and judgement is likely to have the most significant effect on the amounts recognized in the financial statements:

Stock provision
It is essential that the company makes a consideration of recoverable value of stock held and the associated provision that is required. When calculating the stock provision, management will consider the sales of relevant products lines and also their ultimate obsolescence to the market. The condition of stock and the recoverable scrap value will also be considered, as well as the condition and saleability of stock held for long periods or returned from customers. The net carry value of the finished goods arrived at £1,762,832 (2022: £2,911,135) after provision of £86,841 (2022: £63,801), see Note 10.

The directors do not believe that there are any significant uncertainties in the estimates made.

4. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

31.12.23 31.12.22
£    £   
Sales of goods 20,577,283 18,781,081
Freight charge income 50,480 25,014
20,627,763 18,806,095

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

4. TURNOVER - continued

An analysis of turnover by geographical market is given below:

31.12.23 31.12.22
£    £   
United Kingdom 3,235,498 2,611,268
Europe 17,392,265 16,194,827
20,627,763 18,806,095

5. EMPLOYEES AND DIRECTORS
31.12.23 31.12.22
£    £   
Wages and salaries 652,740 575,714
Social security costs 77,309 85,625
Other pension costs 31,275 27,768
761,324 689,107

The average number of employees during the year was as follows:
31.12.23 31.12.22

Sales & Marketing 3 3
Administration 13 10
16 13

31.12.23 31.12.22
£    £   
Directors' remuneration 157,998 146,459
Directors' pension contributions to money purchase schemes 13,972 9,600

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 1 1

6. OPERATING PROFIT

The operating profit is stated after charging:

31.12.23 31.12.22
£    £   
Hire of plant and machinery 14,830 9,656
Other operating leases 64,314 59,711
Depreciation - owned assets 20,136 15,901
Goodwill amortisation - 45,969
Auditors' remuneration 15,000 15,000
Taxation compliance services 1,500 1,500

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
31.12.23 31.12.22
£    £   
Current tax:
UK corporation tax 82,676 74,391
Tax on profit 82,676 74,391

UK corporation tax has been charged at 23.52% (2022 - 19%).

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

31.12.23 31.12.22
£    £   
Profit before tax 331,898 373,109
Profit multiplied by the standard rate of corporation tax in the UK of
23.521% (2022 - 19%)

78,066

70,891

Effects of:
Expenses not deductible for tax purposes 9,721 2,941
Capital allowances in excess of depreciation (5,111 ) -
Depreciation in excess of capital allowances - 559
Total tax charge 82,676 74,391

In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25% (rather than remaining at 19%, as previously enacted). This new law was substantively enacted on 24 May 2021. For the financial year ended 31 December 2023, the current weighted averaged tax rate was 23.52%.

8. INTANGIBLE FIXED ASSETS
Goodwill
£   
COST
At 1 January 2023
and 31 December 2023 558,769
AMORTISATION
At 1 January 2023
and 31 December 2023 558,769
NET BOOK VALUE
At 31 December 2023 -
At 31 December 2022 -

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

9. TANGIBLE FIXED ASSETS
Fixtures
Short Plant and and
leasehold machinery fittings
£    £    £   
COST
At 1 January 2023 17,157 909 50,187
Additions 12,374 - 22,888
Disposals - - (4,135 )
At 31 December 2023 29,531 909 68,940
DEPRECIATION
At 1 January 2023 17,157 687 25,494
Charge for year 515 77 9,048
Eliminated on disposal - - (1,595 )
At 31 December 2023 17,672 764 32,947
NET BOOK VALUE
At 31 December 2023 11,859 145 35,993
At 31 December 2022 - 222 24,693

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 1 January 2023 1,869 57,463 127,585
Additions - 6,363 41,625
Disposals (1,869 ) (11,648 ) (17,652 )
At 31 December 2023 - 52,178 151,558
DEPRECIATION
At 1 January 2023 1,869 46,304 91,511
Charge for year - 10,496 20,136
Eliminated on disposal (1,869 ) (11,648 ) (15,112 )
At 31 December 2023 - 45,152 96,535
NET BOOK VALUE
At 31 December 2023 - 7,026 55,023
At 31 December 2022 - 11,159 36,074

10. STOCKS
31.12.23 31.12.22
£    £   
Finished goods 1,762,832 2,911,135
Goods in Transit 2,546,014 1,609,652
4,308,846 4,520,787

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.23 31.12.22
£    £   
Trade debtors 4,478,460 3,570,768
Amounts owed by group undertakings - 1,750
Other debtors 4,167 5,035
Directors' loan accounts - 1,127
Prepayments and accrued income 114,276 115,632
4,596,903 3,694,312

Amounts owed by group undertakings are unsecured, interest free, without a fixed date of repayment and repayable on demand. The balance as at year end 2022 has been settled during this year with no amounts owed by group undertakings as at 31 December 2023.

Included in balance of trade debtors there is balance of £5,582 (2022: Nil) owed by group undertakings for goods selling activities.

12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.23 31.12.22
£    £   
Trade creditors 7,365,729 6,877,331
Amounts owed to group undertakings 5,392 -
Tax 82,676 74,391
Social security and other taxes 55,268 46,381
VAT 15,857 32,632
Other creditors 385,787 312,903
Accrued expenses 189,145 252,891
8,099,854 7,596,529

Amounts owed to group undertakings are unsecured, interest free, without a fixed date of repayment and repayable on demand.

Included in balance of trade creditors there is balance of £4,747,880 (2022: £5,267,679) owed to group undertakings for goods purchasing activities.

13. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
31.12.23 31.12.22
£    £   
Within one year 140,121 102,694
Between one and five years 290,100 44,913
430,221 147,607

14. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31.12.23 31.12.22
value: £    £   
472,270 Ordinary £1 472,270 472,270

Ginho Europe Precision Manufacturing Co
Ltd (Registered number: 07993185)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

14. CALLED UP SHARE CAPITAL - continued

There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.

15. RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

16. ULTIMATE CONTROLLING PARTY

The company is a wholly owned subsidiary of Ginho Precision Manufacturing Public Ltd Co, a company incorporated in China. The parent undertaking and the smallest and largest group to consolidated these financial statements is Ginho Precision Manufacturing Public Ltd Co. The consolidated financial statements are available from the parent's registered office at No. 5999, Yuetan Rd, Hi-tech Industrial Development Zone, Gaomi, Shandong, China.

The ultimate controlling party is Mr. Shaoshen Zhang.