Company Registration No. 10853845 (England and Wales)
ACRO HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2022
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
ACRO HOLDINGS LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Director's report
4 - 5
Independent auditor's report
6 - 10
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Notes to the financial statements
14 - 21
ACRO HOLDINGS LIMITED
COMPANY INFORMATION
- 1 -
Director
Y Chen
Secretary
J Fang
Company number
10853845
Registered office
Eldon Way
Crick
Northampton
NN6 7SL
Auditor
TC Group
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
Business address
c/o Acro Aircraft Seating Limited
Eldon Way
Crick Industrial Estate
Crick
Northampton
NN6 7SL
ACRO HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -

The director presents the strategic report for the year ended 31 December 2022.

 

PRINCIPAL ACTIVITY

Acro Holdings Limited acts as a holding company. At the balance sheet date it held a controlling interest in two UK based companies, involved in the manufacture of seating for aircraft.

REVIEW OF BUSINESS

Acro Holdings Limited was incorporated on 6 July 2017 to facilitate the purchase of Acro Aircraft Seating Limited by Zhejiang Tiancheng Controls Co., Ltd, a company listed on the Shanghai Stock Exchange in China.

 

Acro Aircraft Seating Limited is a leading designer and manufacturer of aircraft seats and spare parts supplying a wide variety of airline customers spanning the globe, through both linefit and retrofit markets. They have staff based in the UK, US and Asia.

 

Due to the COVID-19 pandemic, the aviation industry was significantly impacted. Acro Aircraft Seating Limited business during 2021 suffered significant revenue reduction. Customers delayed orders from 2021 into 2022 and 2023. However, during the last few months, there has been signs of a recovery in most markets.

 

Acro Premium Seating Limited was dormant throughout the current year and prior year.

 

The business has taken serious actions to react to the challenging market and the management team are determined to invest in future growth.

 

Both subsidiaries are based at their design and manufacturing location situated in Crick, Northampton.

PRINCIPAL RISKS AND UNCERTAINTIES

The Board is committed to protecting and enhancing the company's reputation and investments, while safeguarding the interests of shareholders. It has overall responsibility for the company's system of risk management and internal controls.

 

The company's business is affected by a number of risks and uncertainties that are subject to internal and external factors, some of which we cannot control. The Board will, however, continue to closely monitor market conditions and will react accordingly.

 

The principal risk relates to the value of the investment in the subsidiary companies and a full disclosure of their principal risks and uncertainties can be found in their respective annual reports.

ACRO HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

FINANCIAL PERFORMANCE AND KEY PERFORMANCE INDICATORS

The company generated no income for the period and incurred a net loss before tax of £56.8m.

 

At the balance sheet date, the company had cash reserves of £24K, and net current liabilities of £2.6 million. Total net liabilities at year end were £28.5 million.

 

The company carefully monitors the performance of its subsidiaries. A full list of relevant key performance indicators for Acro Aircraft Seating Limited can be found in the company's statutory accounts.

 

FUTURE OUTLOOK

The future prospects of the company are dependent on the performance of its subsidiaries. Much uncertainty still surrounds the recovery of the aviation industry. Industry experts predict a gradual return to pre-COVID levels as the economy is slowly recovering from pandemic.

 

The company has and will continue to support its subsidiaries and works closely with its Chinese parent company to ensure the trading businesses are best supported for future growth. Acro Holdings Limited expects the subsidiary businesses to grow and when appropriate generate a return on the investments made in them.

NON FINANCIAL INFORMATION

Culture

The Board recognizes that it has an important role in assessing and monitoring that our desired culture is embedded in the values, attitudes, and behaviours we demonstrate. The Board has established honesty, integrity, and respect for people as part of our core values. The Code of Conduct helps everyone to act in line with these values and to comply with relevant laws and regulations. The Health, Safety & Environment policy applies across the business and is designed to ensure that staff always act in the best interests of our people and the environment.

 

Stakeholder Engagement

The Board recognizes the important role it must play and is highly committed to stakeholder engagement, this is part of our strategic ambition. The Board strongly believes that Acro will only succeed by working with Customers and Suppliers and sharing knowledge and experience with our stakeholders and acknowledges the impact of ongoing engagement and dialogue.

 

 

On behalf of the board

Y Chen
Director
8 March 2024
ACRO HOLDINGS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -

The director presents his annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company continued to be that of an investment holding company.

Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Y Chen
Financial instruments

The company has a robust risk management process that follows a sequence of risk identification, assessment of probability and impact, and owner assignment to manage mitigation activities. The company's financial instruments fall into one of two categories - receivables at amortised cost (Financial Assets) and loans and other liabilities at amortised cost (Financial Liabilities). More detail on financial instruments is provided in Notes 1.5 and 1.6.

Receivables at amortised cost: these comprise of other receivables and cash and cash equivalents.

 

Loans and other liabilities held at amortised cost: these comprise other payables.

These financial instruments are subject to a number of risks. The main types of risks are market risks. The main types of risks are market risk, credit risk and liquidity risk. The company's senior management oversees the management of these risks and agrees the policies for managing each of these risks. The company does not engage in the trading of financial assets for speculative purposes nor does it write options.

Going Concern

The Director has considered Going Concern and more details can be found in Note 1.2 to the financial statements.

Auditor

The auditor, TC Group, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

ACRO HOLDINGS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
Statement of director's responsibilities

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is 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 director is required to:

 

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Strategic Report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of principal risks and uncertainties.

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.

On behalf of the board
Y Chen
Director
8 March 2024
ACRO HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ACRO HOLDINGS LIMITED
- 6 -

Qualified opinion on financial statements

We have audited the financial statements of Acro Holdings Limited (the 'company') for the year ended 31 December 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 FRS 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, the financial statements:

Basis for qualified opinion

Included in the balance sheet is the company’s investment in its subsidiary, Acro Aircraft Seating Limited. The carrying value of this investment was £26.6 million at 31 December 2021.

 

IAS 36 requires assets within its scope to be tested for impairment when indicators of impairment exist at the end of a reporting period.

 

In March 2020, there was a downturn in the aviation industry caused by the Covid-19 pandemic with disruptions to supply chains, and the business experienced a significant reduction in revenue.

 

At this time, management assessed the carrying value of the investment and they believed that it had not impaired.

 

We reviewed management’s impairment assessment which included reviewing the cash flow forecasts used by management to perform their impairment assessment, and assessing the key assumptions used by management in their impairment assessment of the investment in the subsidiary, Acro Aircraft Seating Limited. In our view, the assumptions used by management, when considered together, were overly optimistic and a material impairment charge should have been recognised in the company’s financial statements in March 2020 but we did not receive sufficient information to be able to determine the amount of an impairment charge in the accounts.

 

Management are now of the opinion that the carrying value of the investment in Acro Aircraft Seating Limited has impaired but have recognised the impairment charge of £26.6m in 2022.

 

In our opinion, the carrying value of the investment in Acro Aircraft Seating Limited was materially overstated at 31 December 2020 and at 31 December 2021, with the deficit on reserves being materially understated at 31 December 2020 and at 31 December 2021.

 

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 qualified opinion.

ACRO HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACRO HOLDINGS LIMITED
- 7 -

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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 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.

As described in the basis for qualified opinion section of our report, our audit opinion is qualified for not recognising an impairment charge in relation to the investment in its subsidiary Acro Aircraft Seating Limited, in March 2020.

 

Information on investments in the strategic report also omits this information and accordingly we have concluded that the other information is materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matters described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

ACRO HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACRO HOLDINGS LIMITED
- 8 -
Matters on which we are required to report by exception

Except for the matters described in the basis for qualified opinion section of our report, 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 and the director's report.

 

Arising from the matters described in the basis for qualified opinion section of our report:

 

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:

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has 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.

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

ACRO HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACRO HOLDINGS LIMITED
- 9 -

Our approach was as follows:

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx.

This description forms part of our auditor’s report.

ACRO HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACRO HOLDINGS LIMITED
- 10 -

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 him 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.

Andrew Wilson ACA FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
Office: London
8 March 2024
ACRO HOLDINGS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
2022
2021
Notes
£
£
Administrative expenses
(25,964)
(26,883)
Operating loss
(25,964)
(26,883)
Interest payable and similar expenses
4
(389,784)
-
Impairment charges
5
(56,421,965)
-
0
Loss before taxation
(56,837,713)
(26,883)
Tax on loss
6
-
0
-
0
Loss and total comprehensive income for the financial year
(56,837,713)
(26,883)
Total other comprehensive income for the year
-
0
-
0
Total comprehensive income for the year
(56,837,713)
(26,883)
ACRO HOLDINGS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 12 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
7
-
0
26,575,690
Current assets
Cash at bank and in hand
24,206
24,981
Creditors: amounts falling due within one year
9
(2,610,175)
(2,738,711)
Net current liabilities
(2,585,969)
(2,713,730)
Total assets less current liabilities
(2,585,969)
23,861,960
Creditors: amounts falling due after more than one year
9
(25,938,194)
-
0
Net (liabilities)/assets
(28,524,163)
23,861,960
Capital and reserves
Called up share capital
12
1,000
1,000
Share premium account
13
53,789,000
53,789,000
Other reserves
4,100,299
-
0
Profit and loss reserves
(86,414,462)
(29,928,040)
Total equity
(28,524,163)
23,861,960
The financial statements were approved and signed by the director and authorised for issue on 8 March 2024
Y Chen
Director
Company Registration No. 10853845
ACRO HOLDINGS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
Share capital
Share premium
Other reserves
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2021
1,000
53,789,000
-
(29,901,157)
23,888,843
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
-
(26,883)
(26,883)
Balance at 31 December 2021
1,000
53,789,000
-
0
(29,928,040)
23,861,960
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(56,837,713)
(56,837,713)
Capital contribution
-
-
4,451,590
-
4,451,590
Transfer from other reserves
-
-
(351,291)
351,291
-
Balance at 31 December 2022
1,000
53,789,000
4,100,299
(86,414,462)
(28,524,163)
ACRO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
1
Accounting policies
Company information

Acro Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Eldon Way, Crick, Northampton, NN6 7SL. The company's principal activities and nature of its operations are disclosed in the director's 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 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:

Where required, equivalent disclosures are given in the group accounts of Zhejiang Tiancheng Controls Co., Ltd.

The company has taken advantage of the exemption under section 401 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.

 

Acro Holdings Limited is a wholly owned subsidiary of Zhejiang Tiancheng Controls Co., Ltd and the results of Acro Holdings Limited are included in the consolidated financial statements of Zhejiang Tiancheng Controls Co., Ltd which are available from the website:

http://www.cninfo.com.cn

ACRO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.2
Going concern

During the year ended 31 December 2022, the company made a net loss before tax of £56.8m and at the balance sheet date, the company had net liabilities of £28.5m, which includes a loan of £25.9m from its ultimate parent company, Zhejiang Tiancheng Controls Co., Ltd.

 

The company fully depends on its ultimate parent’s financial support, and has received an undertaking that this support will remain available for at least 24 months from the date of signing these financial statements.

 

Based on this, the director has concluded that the company has adequate resources to continue in its operational existence. The company therefore continues to adopt the going concern basis in preparing its financial statements.

1.3
Fixed asset investments

Interests in subsidiaries 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.

1.4
Cash at bank and in hand

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.

1.5
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.

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.

1.6
Financial liabilities

The company recognises 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'.

ACRO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

1.7
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.

1.8
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 profit and loss account 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 profit and loss account, 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.

1.9
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.

ACRO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
2
Critical accounting estimates and judgements

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Key sources of estimation uncertainty
Impairment of investments in subsidiaries

The carrying value of subsidiaries are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. An impairment exists when the carrying value of subsidiaries exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from internal budgets and do not include significant future investments that will enhance the assets performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounting cash flow model as well as the expected future cash inflows. Main assumptions involved current market quotations from technical suppliers and independent professional consultants who are well established in this industry.

3
Employees

The company had no employees during the year, except for the director (2021: 1).

 

The director received no remuneration during the year. The company considers the director to be key management.

4
Interest and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on loans from group undertakings
389,784
-
0
ACRO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
5
Impairment charges
2022
2021
£
£
Inter company balances written off
153,725
-
Impairment of investments in subsidiary
(56,575,690)
-
(56,421,965)
-
0
6
Taxation

The charge for the year can be reconciled to the loss per the profit and loss account as follows:

2022
2021
£
£
Loss before taxation
(56,837,713)
(26,883)
Expected tax credit based on a corporation tax rate of 19.00% (2021: 19.00%)
(10,799,165)
(5,108)
Effect of expenses not deductible in determining taxable profit
74,059
-
0
Income not taxable
(29,208)
-
0
Deferred tax not recognised
4,933
5,108
Impairment of investment in subsidiary add back
10,749,381
-
Taxation charge for the year
-
-
7
Investments
2022
2021
£
£
Investments in subsidiaries
-
0
26,575,690
ACRO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
7
Investments
(Continued)
- 19 -
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 January 2022
56,371,785
Additions
30,000,000
At 31 December 2022
86,371,785
Impairment
At 1 January 2022
(29,796,095)
Impairment losses
(56,575,690)
At 31 December 2022
(86,371,785)
Carrying amount
At 31 December 2022
-
At 31 December 2021
26,575,690
8
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

Name of undertaking
Registered office
Principal activities
Class of
% Held
shares held
Direct
Voting
Acro Aircraft Seating Limited
England & Wales
Aircraft seating design and manufacturer
Ordinary shares
100.00
100.00
Acro Premium Seating Limited
England & Wales
In liquidation
Ordinary shares
100.00
100.00
Acro Aircraft Seating Inc.*
USA
Dormant
Ordinary shares
100.00
100.00
Anke Aircraft Seating (Shanghai) Co.Limited*
P.R. China
Dormant
Ordinary shares
100.00
100.00

* Held by subsidiary, Acro Aircraft Seating Limited.

ACRO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
9
Creditors
Due within one year
Due after one year
2022
2021
2022
2021
Notes
£
£
£
£
Loans and overdrafts
10
-
0
-
0
25,938,194
-
0
Creditors
11
2,610,175
2,738,711
-
0
-
0
2,610,175
2,738,711
25,938,194
-
10
Loans and overdrafts
Due after one year
2022
2021
£
£
Borrowings held at amortised cost:
Loans from ultimate parent
25,938,194
-

During the year, the company received several loans amounting to £30m from the ultimate parent company, Zhejiang Tiancheng Controls Co., Ltd.

 

The loans are unsecured and repayable in 2025, and interest is charged at 0.5%.

 

In accordance with the requirements of IFRS 9, the director had regard to the market rate of interest on these loans that would be applied if these were externally raised debts.

 

They have determined that a rate of 6% would have been appropriate at that time and have discounted the loans back to present value using this rate.

 

The imputed interest is charged to the statement of comprehensive income and the discounted element of the loans are shown in other reserves as a capital contribution.

11
Creditors
2022
2021
£
£
Amount owed to parent undertaking
2,110,175
2,238,711
Amounts owed to subsidiary undertakings
500,000
500,000
2,610,175
2,738,711

Amounts owed to subsidiary undertakings include a loan from Acro Premium Seating Limited. In 2023, the loan was distributed in specie by Acro Premium Seating Limited to Acro Holdings Limited.

ACRO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
12
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Authorised
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
13
Share premium account
2022
2021
£
£
At the beginning and end of the year
53,789,000
53,789,000
14
Contingent Liabilities

The company has provided a guarantee in favour of Bank of China Tiantai Sub Branch. The guarantee is secured by a charge on the Company's shares and related rights in its trading subsidiary, Acro Aircraft Seating Limited.

15
Controlling party

The ultimate parent company is Zhejiang Tiancheng Controls Co., Ltd, a company registered in China and floated in the Shanghai stock exchange (ticker symbol 603085 on en.china-tc.com).

The ultimate controlling party is Mr Bangrui Chen.

The smallest and largest undertaking for which the Company is a member and for which group financial statements are prepared is Zhejiang Tiancheng Controls Co., Ltd.

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