IRIS Accounts Production v24.3.2.46 07295448 director 1.1.24 31.12.24 31.12.24 Medium entities true true false true true false false false false true true false These accounts have been prepared in accordance with the provisions applicable to companies subject to the medium-sized companies regime. Fair value model Ordinary 1.00000 iso4217:GBPiso4217:USDiso4217:EURxbrli:sharesxbrli:pureutr:tonnesutr:kWh072954482023-12-31072954482024-12-31072954482024-01-012024-12-31072954482022-12-31072954482023-01-012023-12-31072954482023-12-3107295448ns15:EnglandWales2024-01-012024-12-3107295448ns14:PoundSterling2024-01-012024-12-3107295448ns10:Director12024-01-012024-12-3107295448ns10:PrivateLimitedCompanyLtd2024-01-012024-12-3107295448ns10:MediumEntities2024-01-012024-12-3107295448ns10:Audited2024-01-012024-12-3107295448ns10:Medium-sizedCompaniesRegimeForDirectorsReport2024-01-012024-12-3107295448ns10:Medium-sizedCompaniesRegimeForAccounts2024-01-012024-12-3107295448ns10:FullAccounts2024-01-012024-12-3107295448ns5:JointVenture12024-01-012024-12-310729544812024-01-012024-12-3107295448ns10:OrdinaryShareClass12024-01-012024-12-3107295448ns10:RegisteredOffice2024-01-012024-12-3107295448ns5:CurrentFinancialInstruments2024-12-3107295448ns5:CurrentFinancialInstruments2023-12-3107295448ns5:ShareCapital2024-12-3107295448ns5:ShareCapital2023-12-3107295448ns5:RetainedEarningsAccumulatedLosses2024-12-3107295448ns5:RetainedEarningsAccumulatedLosses2023-12-3107295448ns5:ShareCapital2022-12-3107295448ns5:RetainedEarningsAccumulatedLosses2022-12-3107295448ns5:RetainedEarningsAccumulatedLosses2023-01-012023-12-3107295448ns5:RetainedEarningsAccumulatedLosses2024-01-012024-12-3107295448ns5:IntangibleAssetsOtherThanGoodwill2024-01-012024-12-3107295448ns5:ComputerSoftware2024-01-012024-12-310729544812024-01-012024-12-3107295448ns5:ReportableOperatingSegment12024-01-012024-12-3107295448ns5:ReportableOperatingSegment12023-01-012023-12-3107295448ns5:TotalReportableOperatingSegmentsIncludingAnyUnallocatedAmount2024-01-012024-12-3107295448ns5:TotalReportableOperatingSegmentsIncludingAnyUnallocatedAmount2023-01-012023-12-3107295448ns5:TotalGeographicSegmentsIncludingAnyUnallocatedAmount2024-01-012024-12-3107295448ns5:TotalGeographicSegmentsIncludingAnyUnallocatedAmount2023-01-012023-12-310729544812024-01-012024-12-310729544812023-01-012023-12-3107295448ns5:OwnedAssets2024-01-012024-12-3107295448ns5:OwnedAssets2023-01-012023-12-3107295448ns5:ComputerSoftware2023-01-012023-12-3107295448ns5:ComputerSoftware2023-12-3107295448ns5:ComputerSoftware2024-12-3107295448ns5:ComputerSoftware2023-12-3107295448ns5:LandBuildings2023-12-3107295448ns5:LongLeaseholdAssetsns5:LandBuildings2023-12-3107295448ns5:PlantMachinery2023-12-3107295448ns5:FurnitureFittings2023-12-3107295448ns5:LandBuildings2024-01-012024-12-3107295448ns5:LongLeaseholdAssetsns5:LandBuildings2024-01-012024-12-3107295448ns5:PlantMachinery2024-01-012024-12-3107295448ns5:FurnitureFittings2024-01-012024-12-3107295448ns5:LandBuildings2024-12-3107295448ns5:LongLeaseholdAssetsns5:LandBuildings2024-12-3107295448ns5:PlantMachinery2024-12-3107295448ns5:FurnitureFittings2024-12-3107295448ns5:LandBuildings2023-12-3107295448ns5:LongLeaseholdAssetsns5:LandBuildings2023-12-3107295448ns5:PlantMachinery2023-12-3107295448ns5:FurnitureFittings2023-12-3107295448ns5:AdditionsToInvestmentsns5:UnlistedNon-exchangeTraded2024-12-3107295448ns5:UnlistedNon-exchangeTradedns5:CostValuation2024-12-3107295448ns5:UnlistedNon-exchangeTraded2024-12-3107295448ns5:Subsidiary12024-01-012024-12-31072954481ns5:Subsidiary12024-01-012024-12-3107295448ns5:Subsidiary12024-12-3107295448ns5:JointVenture112024-01-012024-12-3107295448ns5:JointVenture12024-12-3107295448ns5:WithinOneYearns5:CurrentFinancialInstruments2024-12-3107295448ns5:WithinOneYearns5:CurrentFinancialInstruments2023-12-3107295448ns5:CurrentFinancialInstruments2024-01-012024-12-3107295448ns5:WithinOneYear2024-12-3107295448ns5:WithinOneYear2023-12-3107295448ns5:BetweenOneFiveYears2024-12-3107295448ns5:BetweenOneFiveYears2023-12-3107295448ns5:AllPeriods2024-12-3107295448ns5:AllPeriods2023-12-3107295448ns5:AcceleratedTaxDepreciationDeferredTax2024-12-3107295448ns5:AcceleratedTaxDepreciationDeferredTax2023-12-3107295448ns5:TaxLossesCarry-forwardsDeferredTax2024-12-3107295448ns5:TaxLossesCarry-forwardsDeferredTax2023-12-3107295448ns5:DeferredTaxation2023-12-3107295448ns5:DeferredTaxation2024-01-012024-12-3107295448ns5:DeferredTaxation2024-12-3107295448ns10:OrdinaryShareClass12024-12-310729544812024-01-012024-12-31
REGISTERED NUMBER: 07295448 (England and Wales)















Strategic Report, Report of the Director and

Financial Statements for the Year Ended 31 December 2024

for

Changan UK R & D Centre Limited

Changan UK R & D Centre Limited (Registered number: 07295448)






Contents of the Financial Statements
for the Year Ended 31 December 2024




Page

Company Information 1

Strategic Report 2

Report of the Director 4

Statement of Director's Responsibilities 5

Report of the Independent Auditors 6

Statement of Comprehensive Income 10

Statement of Financial Position 11

Statement of Changes in Equity 12

Notes to the Financial Statements 13


Changan UK R & D Centre Limited

Company Information
for the Year Ended 31 December 2024







DIRECTOR: W Deng





REGISTERED OFFICE: Building 3500 Parkside
Birmingham Business Park
Birmingham
B37 7YG





REGISTERED NUMBER: 07295448 (England and Wales)





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

Changan UK R & D Centre Limited (Registered number: 07295448)

Strategic Report
for the Year Ended 31 December 2024

The director presents his strategic report for the year ended 31 December 2024.

FAIR REVIEW OF THE BUSINESS
During the financial year under review, CAUK (the company) continued to be a trusted supplier of R&D powertrain services to its parent company. The development cycle has continued, with programmes carried over from previous years having successfully gone into further stages of development, moving along the development cycle and becoming part of new production vehicles which are on the market and proving to be good sellers for HQ.

CAUK continue to deliver the next generation of powertrain products including high efficiency engine platforms and E-drive systems, with several variations. Performance tests have shown that the engine family will be very competitive when launched. Work on the HE engine platforms will continue in order to prepare the technologies of the future engines and, support any difficulties that might occur when they go into production. CAUK continues to provide troubleshooting support to HQ lead projects and, strategic consultancy to power system related subjects or matters at its parent company.

During 2024 CAUK started a few new programmes including new 2.0L engine, ultra-high speed e-machine, and platform software for e-drive system. The planned outcome from those new projects, when they complete in a few years time, will enable Changan to be competitive for its powertrain offerings to the global markets. In addition to powertrain projects, CAUK started to provide support for vehicle engineering for the products that are planned for the EU/UK markets. CAUK's primary role in those projects is to support localised validation and provide improvement suggestions from the European perspective. The directors hope this is the area that CAUK can expand its business into and grow in the future.

During 2024 CAUK continued to meet its performance task set by its HQ by providing engineering outputs on time and on quality. By having own test facilities, we are able to conduct tests with high operation efficiency , which may have proven to be an issue if these had to be done externally.

The company continues to hold a small property portfolio, which provides a small but useful revenue stream and will continue to do so going forward. This business is efficiently managed in-house with the help of third parties where needed. During the year, three tenancy contracts ended, and three new tenancy agreements were signed.

The director believes that the company's strong engineering and support service enables the company's continued growth and enables it to continue to focus on developing high-quality powertrain products and technologies to meet the needs of the parent company in the short, medium and long term.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
CAUK's activities expose it primarily to the financial risks of continuation of work contracts, and the associated funding, from the parent company. CAUK is not structured in a manner which would allow it to automatically sustain itself through third party business in the absence of the parent company's contracts.

Short-term liquidity risk is managed by close liaison with the parent company to ensure that cash settlement is carried out in a timely matter. CAUK's policy is to always run in credit and have no UK bank loans. Core business debtor management is limited by the fact that the only customer is our parent company.


Changan UK R & D Centre Limited (Registered number: 07295448)

Strategic Report
for the Year Ended 31 December 2024

GLOBAL INVESTMENTS
In order to support our HQ's global sales strategy, CAUK completed several key overseas investments:

In March 2024, CAUK, in partnership with United Prosperity Investment Co., Ltd, completed a RMB 22.5 million investment to establish a joint venture - Changan Automobile Mexico Sales Company;

In July 2024, the board approved the investment of RMB 18 million to establish a wholly owned subsidiary, Changan Automobile Deutschland GmbH, which was also finalised within 2024;

Additionally, in July 2024, CAUK and United Prosperity Investment Co., Ltd agreed to establish a joint venture named Changan Netherlands Holding B.V., in which CAUK holds a 15% share equivalent to RMB 11 million. This investment has been finalised in March 2025.

KEY FINANCIAL PERFORMANCE INDICATORS
The company has several key financial indicators used internally to monitor and challenge performance, The company performance in 2024 and comparative information for previous year is summarised below.
2024 2023 Movement
£ £
Gross assets 30,847,259 29,183,688 6%
Total equity 27,942,190 27,005,900 3%
Debt to equity ratio 10.40% 8.10% 29%
Total revenue 10,196,653 8,279,513 23%
Profit/(loss) before tax 1,691,844 (815,931) 307%

The increase in gross assets is primarily attributable to the rise in turnover, which is recharge to HQ. The growth in turnover reflects the higher level of activity on HQ-related projects during the year.

The improvement in profit is largely due to no fair value movement on investment property in year 2024, as the current year valuation reflects prevailing market conditions which compares to a £1.36 million fair value loss recognised in 2023.

ON BEHALF OF THE BOARD:





W Deng - Director


27 March 2025

Changan UK R & D Centre Limited (Registered number: 07295448)

Report of the Director
for the Year Ended 31 December 2024

The director presents his report with the financial statements of the company for the year ended 31 December 2024.

PRINCIPAL ACTIVITY
The principal activity of the company continued to be that of the design and development of automotive powertrain products for the parent company in China.

DIVIDENDS
No dividends will be distributed for the year ended 31 December 2024 (2023: Nil).

RESEARCH AND DEVELOPMENT
The company undertakes a continual programme of research and development in the area of automotive design.

EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTOR
W Deng held office during the whole of the period from 1 January 2024 to the date of this report.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the director is 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 he 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 auditor, Shinewing Wilson Accountancy Limited will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





W Deng - Director


27 March 2025

Changan UK R & D Centre Limited (Registered number: 07295448)

Statement of Director's Responsibilities
for the Year Ended 31 December 2024

The director is responsible for preparing the Strategic Report, the Report of the Director 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:

-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 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 him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Report of the Independent Auditors to the Members of
Changan UK R & D Centre Limited

Opinion
We have audited the financial statements of Changan UK R & D Centre Limited (the 'company') for the year ended 31 December 2024 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 2024 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 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 director is responsible for the other information. The other information comprises the information in the Strategic Report, the Report of the Director and the Statement of Director's 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 Director 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 Director have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Changan UK R & D Centre Limited


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 Director.

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 director's remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of director
As explained more fully in the Statement of Director's Responsibilities set out on page five, 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 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.

Report of the Independent Auditors to the Members of
Changan UK R & D Centre Limited


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, Tax legislation, Employment law and Distributable profits legislation.
- Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include Landlord and Tenant Act 1954, Health and Safety legislation, off-payroll working rules (IR35) and General Data Protection Regulation (GDPR).

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.

Report of the Independent Auditors to the Members of
Changan UK R & D Centre Limited


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.




Nijendra Dhungana FCCA (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

27 March 2025

Changan UK R & D Centre Limited (Registered number: 07295448)

Statement of Comprehensive Income
for the Year Ended 31 December 2024

31.12.24 31.12.23
Notes £    £   

TURNOVER 4 10,196,653 8,279,513

Cost of sales 6,983,390 5,776,663
GROSS PROFIT 3,213,263 2,502,850

Administrative expenses 3,592,124 3,916,238
(378,861 ) (1,413,388 )

Other operating income 5 2,070,705 1,963,756
Gain/loss on revaluation of investments - (1,366,299 )
OPERATING PROFIT/(LOSS) 7 1,691,844 (815,931 )

Interest receivable and similar income - 982
PROFIT/(LOSS) BEFORE TAXATION 1,691,844 (814,949 )

Tax on profit/(loss) 8 755,554 67,961
PROFIT/(LOSS) FOR THE FINANCIAL
YEAR

936,290

(882,910

)

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

936,290

(882,910

)

Changan UK R & D Centre Limited (Registered number: 07295448)

Statement of Financial Position
31 December 2024

31.12.24 31.12.23
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 9 74,913 61,360
Tangible assets 10 14,644,056 15,720,247
Investments 11 4,506,613 -
Investment property 12 4,976,280 4,976,280
24,201,862 20,757,887

CURRENT ASSETS
Debtors 13 3,321,529 4,349,423
Cash at bank 3,323,868 4,076,378
6,645,397 8,425,801
CREDITORS
Amounts falling due within one year 14 2,364,158 1,566,694
NET CURRENT ASSETS 4,281,239 6,859,107
TOTAL ASSETS LESS CURRENT
LIABILITIES

28,483,101

27,616,994

PROVISIONS FOR LIABILITIES 17 540,911 611,094
NET ASSETS 27,942,190 27,005,900

CAPITAL AND RESERVES
Called up share capital 18 26,393,935 26,393,935
Retained earnings 1,548,255 611,965
SHAREHOLDERS' FUNDS 27,942,190 27,005,900

The financial statements were approved by the director and authorised for issue on 27 March 2025 and were signed by:





W Deng - Director


Changan UK R & D Centre Limited (Registered number: 07295448)

Statement of Changes in Equity
for the Year Ended 31 December 2024

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 January 2023 26,393,935 1,494,875 27,888,810

Changes in equity
Total comprehensive income - (882,910 ) (882,910 )
Balance at 31 December 2023 26,393,935 611,965 27,005,900

Changes in equity
Total comprehensive income - 936,290 936,290
Balance at 31 December 2024 26,393,935 1,548,255 27,942,190

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements
for the Year Ended 31 December 2024

1. STATUTORY INFORMATION

Changan UK R & D Centre Limited 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 as modified by the revaluation of certain assets.

Going concern
At the time of approving the financial statements, the dìrector has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the dírector continues to adopt the going concern basis of accounting in preparing the financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions 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;
the requirement of paragraph 33.7.

The financial statements of the company are consolidated in the financial statements of Chongqing Changan Automobile Company Limited, https://www.changan.com.cn/cca/basicinfo?index=1

Preparation of consolidated financial statements as an individual company
The Company is a part of a larger group and included in the consolidated financial statements of a parent. The ultimate parent undertaking Chongqing Changan Automobile Co., Ltd., holds 100% of the share capital of the Company, is the smallest and largest group to consolidate these financial statements. The Company continues under section 401 of the Companies Act to take exemption in preparing consolidated accounts for the UK sub-group. These financial statements present information about the Company as an individual undertaking and not about its group. Ultimate parent company's accounts continue to be prepared under Chinese GAAP, and have been filed along with the Company's accounts at the Companies House in accordance with the Companies Act 2006. The consolidated financial statements are available at the ultimate parent's registered office, Building T2, No. 2, Financial City, No. 61 Dongshengmen Road, Jiangbei District, Chongqing.

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

2. ACCOUNTING POLICIES - continued

Turnover
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for work provided in the normal course of business, net of discounts, VAT and other sales related taxes.

The company provides research and development services on a continuous basis to, and under the general direction of, its parent company, in accordance with the terms of a single agreement/contract. Accordingly, revenue receivable from the parent company is recognised on a straight-line basis over the specified period.

Other income
Other income is recognised when it is probable that the economic benefit will flow to the company, and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of three years.

Tangible fixed assets
Tangible fixed assets are measured at cost, net of depreciation and any impairment losses.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Freehold buildings: 35 and 20 years straight line
Equipment: 5-12 years straight line
Fixture & fittings: 12 years straight line
Freehold land: not provided
Asset under construction: not provided

Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.

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 assets (or cash-generating unit) prior years. A reversal of impairment loss is recognised immediately in profit or loss.

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

2. ACCOUNTING POLICIES - continued

Investment property
Investment property is carried at fair value and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary, for any difference in the nature, location or condition of the specific asset. No depreciation is provided.

Subsequent to initial recognition, investment property is stated at fair value. Gains or losses arising from changes in the fair values are included in the Income Statement in the year in which they arise.

Investment property is derecognised when it has been disposed of or permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses are recognised in the Income Statement.

Gains or losses on the disposal of investment property are determined as the difference between net disposal proceeds and the carrying value of the asset at the date of disposal.

Leasing arrangements
The investment properties are leased to tenants under operating leases with rentals payable monthly. Rental income from operating leases where the company is a lessor is recognised in income on a straight-line basis over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis.

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

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 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 financial asset is measured at the present value of the future receipts discounted at a market rate of interest.

Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original elective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occuring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 creditors and loans from fellow group companies, 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 rate method.

Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company's contractual obligations are discharged, cancelled, or they expire.

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

2. ACCOUNTING POLICIES - continued

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, over/under provision from previous period and deferred tax. Tax liability 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. R&D tax credit is recognised each year and included in the other operating income.

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 the 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.

Research and development
Research expenditure is written off against profits in the year in which it is incurred.

The Company undertakes research and development activities as a supplier rather than for its own benefits, therefore, no development costs are capitalised.

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 the transaction. Exchange differences are taken into account in arriving at the operating result.

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.

The assets of the scheme are held separately from those of the company in an independently administered fund.

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

2. ACCOUNTING POLICIES - continued

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.

Investment in joint venture and subsidiary
Investments in joint ventures and subsidiaries are initially recognised at cost in the financial statements, representing the actual funds invested by the company, subsequently investments are carried at cost, less any accumulated impairment losses. Impairment is assessed at each reporting date, and any loss is recognised in profit or loss if the recoverable amount falls below the carrying value.

Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

3. CRITICAL ACCOUNTING 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.

Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Leases
In categorising leases as finance leases or operating leases, management makes judgements as to whether significant risks and rewards of ownership have transferred to the Company as lessee, or transferred from the Company as lessor.

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:

Valuation of investment property
The valuation is based on the fair value of the freehold interests of the individual properties subject to the various tenancies prevailing and subject to the assumptions that the property will meet the minimum requirements laid down by the legislation and that there will be no adverse impact on value and marketability.

Valuation of investment in JV and subsidiary
Investments in joint ventures and subsidiaries are initially recognised at cost, which complies with FRS 102. The company reviews the carrying amount of investments annually for any indications of impairment. Where an impairment is identified, the recoverable amount is reassessed, and any shortfall in carrying value is recognized immediately in profit or loss.

4. TURNOVER

The turnover and profit (2023 - loss) before taxation are attributable to the one principal activity of the company.

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

31.12.24 31.12.23
£    £   
Service revenue 10,196,653 8,279,513
10,196,653 8,279,513

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

4. TURNOVER - continued

An analysis of turnover by geographical market is given below:

31.12.24 31.12.23
£    £   
P.R. China 10,196,653 8,279,513
10,196,653 8,279,513

5. OTHER OPERATING INCOME
31.12.24 31.12.23
£    £   
Rents received 471,421 450,856
Sundry receipts 17,012 10,896
R&D tax reliefs 1,225,514 972,918
Government grants and enhanced
credit scheme 356,758 529,086
2,070,705 1,963,756

6. EMPLOYEES AND DIRECTORS
31.12.24 31.12.23
£    £   
Wages and salaries 4,293,732 3,789,080
Social security costs 487,744 557,584
Other pension costs 817,064 619,022
5,598,540 4,965,686

The average number of employees during the year was as follows:
31.12.24 31.12.23

Development staff 56 53
Administrative staff 5 8
61 61

31.12.24 31.12.23
£    £   
Directors' remuneration - -

During the year, the director was not remunerated for services provided to the company as these costs were borne by other companies in the group.

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

7. OPERATING PROFIT/(LOSS)

The operating profit (2023 - operating loss) is stated after charging:

31.12.24 31.12.23
£    £   
Depreciation - owned assets 1,142,873 1,086,756
Loss on disposal of fixed assets 14,778 -
Computer software amortisation 39,439 50,697
Auditors' remuneration 10,000 10,000
Other non- audit services 27,188 6,518
Foreign exchange differences 7,270 6,780

8. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
31.12.24 31.12.23
£    £   
Current tax:
UK corporation tax 753,755 378,905

Deferred tax 1,799 (310,944 )
Tax on profit/(loss) 755,554 67,961

UK corporation tax has been charged at 25% .

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:

31.12.24 31.12.23
£    £   
Profit/(loss) before tax 1,691,844 (814,949 )
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of
25% (2023 - 23.500%)

422,961

(191,513

)

Effects of:
Expenses not deductible for tax purposes - 23,500
Depreciation in excess of capital allowances 190,121 145,030
Adjustments to tax charge in respect of previous periods 142,472 80,549
to tax rate change
Deferred tax not recognised - 10,395

Total tax charge 755,554 67,961

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

8. TAXATION - continued

For the financial year ended 31 December 2024, the current weighted averaged tax rate was 25%.

OECD Pillar Two model rules
Changan UK (CAUK) is within the scope of the OECD Pillar Two model rules, which establish a global minimum tax rate of 15%. Pillar Two legislation has been enacted in the UK and is effective from 2024. Under this legislation, CAUK may be liable for a top-up tax based on the difference between the GloBE effective tax rate in each jurisdiction and the 15% minimum rate, including any applicable domestic top-up taxes.

As CAUK's parent company is based in China, where Pillar Two has not been implemented, the company is assessing its exposure to the legislation and the potential impact on its financial position. Liabilities will be recognized when they become probable and measurable, in accordance with applicable accounting standards.

9. INTANGIBLE FIXED ASSETS
Computer
software
£   
COST
At 1 January 2024 1,344,470
Additions 49,525
Disposals (11,409 )
Reclassification/transfer 12,474
At 31 December 2024 1,395,060
AMORTISATION
At 1 January 2024 1,283,110
Amortisation for year 39,439
Eliminated on disposal (11,409 )
Reclassification/transfer 9,007
At 31 December 2024 1,320,147
NET BOOK VALUE
At 31 December 2024 74,913
At 31 December 2023 61,360

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

10. TANGIBLE FIXED ASSETS
Fixtures
Freehold Long Plant and and
property leasehold machinery fittings Totals
£    £    £    £    £   
COST
At 1 January 2024 2,811,606 7,226,685 10,927,882 184,388 21,150,561
Additions - - 84,926 - 84,926
Disposals - - (229,413 ) - (229,413 )
Reclassification/transfer - - (12,474 ) - (12,474 )
At 31 December 2024 2,811,606 7,226,685 10,770,921 184,388 20,993,600
DEPRECIATION
At 1 January 2024 466,952 464,573 4,314,401 184,388 5,430,314
Charge for year 57,766 206,476 878,631 - 1,142,873
Eliminated on disposal - - (214,636 ) - (214,636 )
Reclassification/transfer - - (9,007 ) - (9,007 )
At 31 December 2024 524,718 671,049 4,969,389 184,388 6,349,544
NET BOOK VALUE
At 31 December 2024 2,286,888 6,555,636 5,801,532 - 14,644,056
At 31 December 2023 2,344,654 6,762,112 6,613,481 - 15,720,247

11. FIXED ASSET INVESTMENTS
Unlisted
investments
£   
COST
Additions 4,506,613
At 31 December 2024 4,506,613
NET BOOK VALUE
At 31 December 2024 4,506,613

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

11. FIXED ASSET INVESTMENTS - continued

The company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Subsidiary

Changan Automobile Deutschland GmbH
Registered office: Georg-Brauchle-Ring 56-58 80992 Muenchen
Nature of business: Import, sales and purchase of new and used
%
Class of shares: holding
Ordinary share 100.00
31.12.24
£   
Aggregate capital and reserves 1,927,372
Profit for the year 2,337

Joint venture

CHANGAN AUTO MÉXICO, S. DE RL DE CV
Registered office: Periférico Blvrd. Manuel Ávila Camacho No. 138 Lomas de Chapultepec I Sección, Miguel Hidalgo México, CIUDAD DE MEXICO, 11000 Mexico
Nature of business: Motor vehicle and motor vehicle parts and supplie
%
Class of shares: holding
Ordinary share 75.00
31.12.24
£   
Aggregate capital and reserves 6,371,164
Profit for the year 3,109,586

The carrying value of the company's investment in the JV was as follows:

2024
£   
At 1 January -
Investment during the year 2,466,376
Share of profit 2,332,189
AT 31 December 4,798,565


Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

12. INVESTMENT PROPERTY
Total
£   
FAIR VALUE
At 1 January 2024
and 31 December 2024 4,976,280
NET BOOK VALUE
At 31 December 2024 4,976,280
At 31 December 2023 4,976,280

Fair value at 31 December 2024 is represented by:
£   
Valuation in 2015 378,888
Valuation in 2017 727,968
Valuation in 2020 735,239
Valuation in 2023 (1,366,299 )
Cost 4,500,484
4,976,280

The Company values investment properties every three years using RICS registered valuers. Last valuation was carried out and reported on 30 October 2023 by ME Cook Bsc (Hons) MRICS, a RICS registered valuer, of KWB Office Agency Ltd, who is not connected with the Company.

For year ended 31 December 2024, the fair value of investment property is based on the mangement's consideration, the management inputs include sales price per square metre for similar properties in a similar location in an active market, or property yields derived from the latest transactions in active markets for similar properties.

13. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.24 31.12.23
£    £   
Amounts owed by group undertakings 589,405 2,771,476
Other debtors 1,381,571 817,391
Other debtor-rent receivable 399,184 223,702
KWB Service charge account 616,288 167,211
VAT 130,378 134,874
Prepayments 204,703 234,769
3,321,529 4,349,423

Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.24 31.12.23
£    £   
Trade creditors 8,415 19,813
Social security and other taxes 131,894 129,472
Pension 77,455 58,755
Other creditors 765,194 178,830
Deferred income 1,037,310 1,166,974
Accrued expenses 343,890 12,850
2,364,158 1,566,694

Included in deferred income is grant received to date from government towards the construction of CAUK test centre, £129,664 (2023: £129,664) has been recognised as income during the year.

15. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
31.12.24 31.12.23
£    £   
Within one year 27,712 49,232
Between one and five years - 27,712
27,712 76,944

The company owns several investment properties for rental purposes, which were acquired in 2015. Rental income earned during the year was £471,421 (2023: £450,856). All of the properties have committed tenants for between 1-10 years with 1-3 years break clauses. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have an option to purchase the property at the expire of the lease period.

At the reporting end date, the company has contracted with tenants for the following minimum lease payments:

Within one year: £379,492 (2023: £327,321)
Between one and five years: £946,351 (2023: £1,218,953)

16. FINANCIAL INSTRUMENTS

Carrying amount of financial assets
Debt instruments measured at amortised cost: £5,015,363 (2023: £7,665,246).

Carrying amount of financial liabilities
Liabilities measured at amortised cost: £1,808,593 (2023: £1,363,294).

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

17. PROVISIONS FOR LIABILITIES
31.12.24 31.12.23
£    £   
Deferred tax
Accelerated capital allowances 393,944 392,145
Investment property 118,949 118,949
Other provisions 28,018 100,000
540,911 611,094

Deferred
tax
£   
Balance at 1 January 2024 511,094
Provided during year 1,799
Balance at 31 December 2024 512,893

Included in other provision, £28K (2023: £100K) was PAYE liability provided in relation to ongoing PAYE investigation.

The deferred tax liability set out above relates to accelerated capital allowances and the fair value adjustment in respect of investment properties, and is expected to reverse over the life of the assets to which they relate or on the sale of the investment properties. In past years, the UK Government has steadily reduced the rate of UK corporation tax, the latest rates set at 25% with effect from 1 April 2023.

18. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31.12.24 31.12.23
value: £    £   
26,393,935 Ordinary £1 26,393,935 26,393,935

19. PENSION COMMITMENTS

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. Amounts charged to profit and loss in respect of the scheme were £817,065 (2023: £619,022).

20. 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.

21. POST BALANCE SHEET EVENTS

The company entered into an agreement with United Prosperity Investment Co Limited, a related party in the Group, to establish a joint venture of Changan Netherlands Holding B.V.. Upon completion of the investment on 4 March 2025, Changan UK owns 15% shareholding of the JV.

Changan UK R & D Centre Limited (Registered number: 07295448)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2024

22. CONTROLLING PARTY

The immediate and ultimate holding company is Chongqing Changan Automobile Company Limited, a company registered in China. The registered address of the holding company is No. 260, East Jianxin Road Jiangbei District, Chongqing, 400023. Chongqing Changan Automobile Company Limited is the parent company of the largest and smallest group in which the results of the company are consolidated.

The sole director does not consider there to be an individual ultimate controlling party.