Company registered number: 11283634
TOYOTA CONNECTED EUROPE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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TOYOTA CONNECTED EUROPE LIMITED
COMPANY INFORMATION
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2nd Floor 80 Turnmill Street
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PricewaterhouseCoopers LLP
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Chartered Accountants and Statutory Auditors
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Sumitomo Mitsui Banking Corporation
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National Westminster Bank Public Limited Company
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TOYOTA CONNECTED EUROPE LIMITED
CONTENTS
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Independent Auditors' Report
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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TOYOTA CONNECTED EUROPE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their strategic report for the year ended 31 March 2024.
The principal activity of the company is to leverage the power of data to create products and services in the mobility ecosystem that serve a variety of B2B, B2B2C and B2C use cases. The company’s activities are based around its core engineering capabilities across data and mobility products, along with its expertise in design and user experience.
The results reflect the company's sixth trading year in London. The turnover of the business was £41,218,364 (2023: £14,794,852) with a loss before tax of £554,898 (2023: £9,516,652). The results for the year are set out in the Statement of Comprehensive Income on page 12.
The company is in a net assets position with net liabilities of £37,015,668 (2023: £35,835,551).
The outlook for 2025 is positive, with continued development in both products and services.
Principal risks and uncertainties
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Economic risk
The risk of inflation may have an adverse impact on costs over the next year. The Company will seek to manage this through the pricing of its products and services.
Financial risk
All key financial figures are monitored on a regular basis. The Company has strong support from its parent company and good liquidity therefore the overall risk should remain low for the foreseeable future.
Foreign exchange risk
The company is exposed to foreign exchange risk in the usual course of business, mainly through sales contracts entered in Euros and US Dollars. The company reviews this on a regular basis and is in regular conversations with the parent company to ensure these risks are understood and managed centrally. See Financial instruments on Page 5.
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TOYOTA CONNECTED EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Financial key performance indicators
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We consider the Company's key performance indicators are those that communicate the financial performance and strength of the Company, being turnover, profit before tax and net assets.
The Company's key financial indicators during the year were as follows:
During the year ending 31 March 2024, the company achieved 178.6% revenue growth due to adjustments made in prior period. The turnover balance reported in 2023 is not directly comparable to the 2024 balance, despite the year on year changes in reported turnover, the underlying activity of the Company remains broadly consistent year on year and in line with our business plans. The loss before tax was £554,898 which was -1.3% of revenue (2023: £9,516,652, -64.3%). This loss has led to an increase in net liabilities at the year-end; the closing net liabilities were £37,012,308 (2023: £35,835,551).
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Other key performance indicators
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We place importance on the following non financial KPIs and strive daily to improve them through communication with stakeholders.
Product/Service Quality
Improving quality is an essential element in order to provide products and services that satisfy our major customer, Toyota Motor Europe NV/SA (“TME”), and other Toyota Group customers. In order to understand Toyota's global mission and accurately reflect the specific needs of customers in our products and services, we are promoting opportunities for communication with customers and fostering close relationships with customers through employees seconded from TME and Toyota. Employees are also trained in the Toyota Production System, which is used to improve the quality of software and designs.
Talent Acquisition and Retention
The fields of advanced software development and UX design are evolving at a rapid pace, and the competition for talent is fierce. By basing our business in London, we aim to attract and retain talented people, and the turnover rate of employees is one of our important indicators. We are committed to fostering a positive and inclusive workplace culture that attracts and retains top talent. By investing in our employees' professional development and well-being, we aim to create a high-performing and engaged workforce.
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TOYOTA CONNECTED EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Directors' statement of compliance with duty to promote the success of the Company
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The directors are aware of their duty under section 172 of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole and, in doing so, to have regard (amongst other matters) to:
a)the likely consequences of any decision in the long term;
The directors understand the business and the evolving environment in which the Company operates.
All decisions are taken with the aim of improving the success of the Company in the long term.
b)the interests of the Company’s employees;
The directors communicate regularly to ensure employees understand the Company's values and work together towards a common mission.
c)the need to foster the Company’s business relationships with suppliers, customers and others;
The directors believe in developing mutually beneficial long-term relationships based on mutual trust with all suppliers. In order to realize a data-driven ecosystem, the directors strengthen cooperative relationships with customers and suppliers and maintain appropriate relationships that comply with regulations.
d)the impact of the Company’s operations on the community and the environment;
In order to contribute to the sustainable development of society and the world through its business activities while cooperating with global society, Toyota has been conducting continuous environmental initiatives since the 1960s. Toyota’s aim is to build a corporate group that is admired and trusted by society through ensuring that all employees, including those at consolidated subsidiaries, recognise sustainable policies. As a member of the Toyota Group, we promote business activities that are considerate of society and the environment.
e)the desirability of the Company maintaining a reputation for high standards of business conduct; and
As a member of the Toyota Group, "Honesty first, Integrity always" is the most important element of our Code of Conduct. The board’s decisions consider the Company’s code of conduct, we are promoting the Toyota Way and Toyota Culture among our employees. We are aiming to create innovative customer experiences that lead to the mass production of human happiness.
f)the need to act fairly between members of the Company.
The directors ensure that all members are treated equitably, and it fosters trust between the Company and its stakeholders. The directors understand that unfair treatment can lead to disputes, legal action, and damage to the Company's reputation.
The financial statements on pages 11 to 32 were approved by the Board of Directors on 31 March 2025 and signed on its behalf by:.
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TOYOTA CONNECTED EUROPE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their report and the audited financial statements for the year ended 31 March 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”, and applicable law. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙state whether applicable United Kingdom Accounting Standards, comprising FRS 101 have been followed, subject to any material departures disclosed and explained in the financial statements;
∙make judgements and accounting estimates that are reasonable and prudent and;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are also 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.
The loss for the year, after taxation, amounted to £1,180,117 (2023 - loss £9,323,060).
The directors do not propose the payment of a dividend (2023 - £Nil).
The company recorded a net loss before tax of £554,898 and is in a current net liabilities position of £37,015,668 as at 31 March 2024. Given the financial position of the company the directors have received confirmation from its immediate parent company, Toyota Connected Corporation, that it will continue to support the Company for at least one year after these financial statements are signed. The directors have reviewed the cash flow projections for the next 12 months and have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Based on the information above, the Company’s forecasts and the continued availability of financial support from its immediate parent, the directors consider it appropriate to prepare the financial statements on a going concern basis.
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TOYOTA CONNECTED EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
The directors plan to put into practice the following vision to strengthen our core competencies and become the preferred partner of our customers.
Short-Term Vision
∙Deliver in the most cost-efficient manner with high quality and delight our customers;
∙Be recognised as a leader in software development in our customers, through technological innovation and unique selling points derived from our knowledge of Toyota;
∙Leverage core competencies (data, cloud & design)to grow our revenue in sales enablement domains;
Mid-Term Vision
∙Be the software development partner of choice for the existing customers and other EU region stakeholders;
∙Monitor future of Toyota & Market and play role in early stage to capitalize on future opportunities (move up the value chain);
∙Continually strive to create products related to mobility, new domain and Innovation;
The Company has a normal level of exposure to prices, liquidity and cash flow risks arising from trading activities which are conducted in Pounds Sterling, Euros, US dollars and Yen. The foreign exchange risk is managed centrally at a group level; as a result, the Company has not entered any hedging arrangements in respect of risks relating to trade debtors or trade creditors.
Directors
The Directors who served throughout the year and up to the date of signing the financial statements, unless otherwise stated, were as follows:
Matthew Peter Harrison (resigned 1 January 2025)
Mamoru Hayakawa (appointed 1 April 2024)
Frank Chukwuma Okoisor
Shinichi Taniguchi (appointed 28 June 2023)
Masato Nakata (resigned 27 June 2023)
Steven Singh Basra (resigned 30 June 2023)
Miguel Silva Ramalho Da Fonseca (resigned 18 January 2024)
Ryo Yamamoto (resigned 15 April 2024)
Gerald Killmann (appointed 2 February 2024, resigned 30 June 2024)
Directors' indemnities
As permitted by the Articles of Association, the Directors have the benefit of an indemnity which is a qualifying third-party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force. The Company also purchased and maintained throughout the financial year Director's and Officers' liability insurance in respect of itself and its Directors.
Research and development activities
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Expenditure on the research phase of the Company’s projects is expensed as they are incurred. During the year, no development costs were capitalised (2023: £Nil).
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TOYOTA CONNECTED EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Engagement with suppliers, customers and others
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Stakeholder engagement is important to the Company and the Company has a diverse group of stakeholders.
The Board are made aware of the needs and requirements of these stakeholders through regular discussions with the departments who have the contact with them. If any concerns are raised, the Board acts to ensure that the feedback is built into future decision making.
Customers
The needs of the customer, whether it is the Company’s immediate customer, such as TME, or the ultimate customer who buys the vehicle are important to the Company. The flexibility that the Company provides in terms of fulfilling orders to it customers is a key contributor to this.
Suppliers
The supplier network that supports the Company is essential to its success. The Company develops mutually beneficial long-term relationships based on shared trust. This is achieved by having close and wide-ranging communications with a focus on sharing knowledge.
Branches outside the United Kingdom
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The Company has no overseas branches.
Disclosure of information to auditors
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In the case of each director in office at the date the Directors' Report is approved:
∙so far as they have taken all the steps that they ought to have taken as a is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Company since the year end.
The auditors, PricewaterhouseCoopers LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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TOYOTA CONNECTED EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TOYOTA CONNECTED EUROPE LIMITED
Because of the significance of the matters described in the Basis for disclaimer of opinion paragraph below, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly we do not express an opinion on Toyota Connected Europe Limited’s financial statements (the “financial statements”).
We were engaged to audit the financial statements, included within the Annual report and financial statements (the “Annual Report”), which comprise: the balance sheet as at 31 March 2024; the statement of comprehensive income and the statement of changes in equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies. The financial reporting framework that has been applied in their preparation is United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law).
Basis for disclaimer of opinion
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We were unable to obtain sufficient appropriate audit evidence over the company’s accounting records, impacting both the current and prior financial years and opening comparative balances, supporting the following financial statement line items and disclosures:
∙turnover;
∙cost of sales and operating expenses;
∙debtors: amounts falling due within one year;
∙creditors: amounts falling due within one year and creditors: amounts falling due after more than one year; and
∙related transactions including other operating income (FX) and tax.
Additionally, the company has not been able to provide evidence to support the appropriateness of the use of disclosure exemptions in respect of the requirements of IAS 7 and IAS 24, taken under FRS 101, as disclosed in note 2.2 of the financial statements.
Whilst significant efforts have been made to obtain sufficient and appropriate evidence to support the aforementioned financial statement line items and disclosures, we were unable to perform satisfactory audit procedures in the timeframe available to obtain reasonable assurance that those financial statements items and disclosures were free from material misstatement. As a result, we were unable to determine whether any further adjustments or disclosures would be required in respect of the aforementioned financial statement line items, making up the Balance sheet as at 31 March 2024, the Statement of comprehensive Income, the Statement of changes in equity and the Notes to the financial statements for the year ended 31 March 2024.
Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
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TOYOTA CONNECTED EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TOYOTA CONNECTED EUROPE LIMITED (CONTINUED)
Conclusions relating to going concern
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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.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Reporting on the Strategic report and Directors' report
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Notwithstanding our disclaimer of an opinion on the financial statements, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report for the year ended 31 March 2024 is consistent with the financial statements.
Because of the significance of the matter described in the Basis for disclaimer of opinion paragraph above we have been unable to form an opinion whether, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report for the year has been prepared in accordance with applicable legal requirements.
Notwithstanding our disclaimer of an opinion on the financial statements, in light of the knowledge and understanding of the company and its environment obtained in the course of the audit and performed subject to the pervasive limitation described above, we did not identify any material misstatements in the Strategic report and Directors' report
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TOYOTA CONNECTED EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TOYOTA CONNECTED EUROPE LIMITED (CONTINUED)
Responsibilities for the financial statements and the audit
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Responsibilities of the directors for the financial statements
As explained more fully in the Directors' responsibilities statement, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our responsibility is to conduct an audit of the financial statements in accordance with ISAs (UK) and to issue an auditors’ report. However, because of the matters described in the Basis for disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
Capability of the audit in detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to the tax jurisdictions the company operates in, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial results and potential management bias in the selection and application of significant accounting judgements and estimates. Audit procedures performed by the engagement team included:
∙Discussions with management, including consideration of known or suspected instances of non- compliance with laws and regulations, bribery and fraud, including performing additional procedures where applicable;
∙Reviewing board meeting minutes and significant contracts;
∙Identifying and testing the validity of journal entries, in particular journal entries posted with unusual account combinations and out of period adjustments;
∙Challenging assumptions made by management in the selection and application of significant accounting judgements and estimates;
∙Review of expenses and intercompany confirmations;
∙Incorporating elements of unpredictability in our audit procedures; and
∙Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due
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TOYOTA CONNECTED EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TOYOTA CONNECTED EUROPE LIMITED (CONTINUED)
to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Arising from the limitation of our work referred to in the Basis for disclaimer of opinion paragraph above:
∙we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
∙we were unable to determine whether adequate accounting records have been kept by the company.
Under the Companies Act 2006 we are also required to report to you if, in our opinion:
∙returns adequate for our audit have not been received from branches not visited by us; or
∙certain disclosures of directors’ remuneration specified by law are not made; or
∙the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
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TOYOTA CONNECTED EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TOYOTA CONNECTED EUROPE LIMITED (CONTINUED)
James Cadzow (Senior Statutory Auditor)
for and on behalf of
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
40 Clarendon Road
Watford
United Kingdom
31 March 2025
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TOYOTA CONNECTED EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
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Other operating (losses)/gains
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Interest receivable and similar income
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Interest payable and similar expenses
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Loss for the financial year
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Total comprehensive income for the year
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The notes on pages 16 to 32 form part of these financial statements.
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TOYOTA CONNECTED EUROPE LIMITED
REGISTERED NUMBER: 11283634
BALANCE SHEET
AS AT 31 MARCH 2024
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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TOYOTA CONNECTED EUROPE LIMITED
REGISTERED NUMBER: 11283634
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2024
The financial statements on pages 11 to 32 were approved and authorised for issue by the board on 31 March 2025 and were signed on its behalf by:
The notes on pages 16 to 32 form part of these financial statements.
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TOYOTA CONNECTED EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
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Comprehensive expense for the year
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Comprehensive expense for the year
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The notes on pages 16 to 32 form part of these financial statements.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Toyota Connected Europe Limited is a private company limited by shares incorporated in United Kingdom. The Company is registered and domiciled in England, United Kingdom. The address of the registered office is 2nd Floor 80 Turnmill Street, London, EC1M 5QU. The principal activity of the company is to leverage the power of data to create products and services in the mobility ecosystem that serve a variety of B2B, B2B2C and B2C use cases. The company’s activities are based around its core engineering capabilities across data and mobility products, along with its expertise in design and user experience.
2.Material accounting policy information
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and the Companies Act 2006 as applicable to companies using FRS 101.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The financial statements are prepared on a going concern basis.
There are no amendments to accounting standards, or IFRIC interpretations that are effective for the year ended 31 March 2024 that have a material impact on the company's financial statements.
The principal accounting policies are set out below. These policies have been consistently applied unless otherwise stated.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Material accounting policy information (continued)
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Financial Reporting Standard 101 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions under FRS 101:
∙the requirements of IFRS 7 Financial Instruments: Disclosures
∙the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement
∙the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers
∙the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases. The requirements of paragraph 58 of IFRS 16, provided that the disclosure of details in indebtedness relating to amounts payable after 5 years required by company law is presented separately for lease liabilities and other liabilities, and in total
∙the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements
∙the requirements of IAS 7 Statement of Cash Flows
∙the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
∙the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.
The requirements of paragraphs 10(f) and 40A-D of IAS 1 Presentation of financial statements:
∙10(f) (a statement of financial position as at the beginning of the preceding period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements); and
∙40A-D (requirements for a third statement of financial position).
This information is included in the consolidated financial statements of Toyota Connected Corporation for the year ended 31 March 2024 and these financial statements may be obtained from 1-11-11 Nishiki, Naka-ku, Nagoya, Aichi Prefecture, Japan 460-0003.
The company recorded a net loss before tax of £554,898 and is in a current net liabilities position of £37,012,308 as at 31 March 2024. Given the financial position of the company the directors have received confirmation from its immediate parent company, Toyota Connected Corporation, that it will continue to support the Company for at least one year after these financial statements are signed. The directors have reviewed the cash flow projections for the next 12 months and have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Based on the information above, the Company’s forecasts and the continued availability of financial support from its immediate parent, the directors consider it appropriate to prepare the financial statements on a going concern basis.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Material accounting policy information (continued)
Revenue from the provision of services is recognised in the accounting period on the satisfaction of performance obligations, such as when services are provided, at an amount which reflects the consideration to which the company expects to be entitled to. Revenue is measured as the fair value of the consideration, excluding discounts, rebates, value added tax and other sales taxes and gross of withholding tax.
The performance obligations and consideration are identified in the contract between the Company and the customer.
The revenue recognition criteria in IFRS15 are applied using the following 5 step model:
1. Identify the contract(s) with the customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations
5. Recognise revenue when, or as, each performance obligation is satisfied.
For time and materials contracts and fixed term contracts to provide services, a contract or quotation is formed between the customer and supplier when a contract is signed by both parties. The distinct performance obligation can be readily identified by the services defined in the contract. Revenue should be recognised when the sole performance obligation has been fulfilled as defined in the contract. The revenue from providing services is recognised in the accounting period in which theservices are rendered and the revenue to be recognised in future periods is recorded in deferred income.
For support services being provided to customers for a particular time period, a contract is formed between the customer and supplier when a contract is signed by both parties. The distinct performance obligation can be readily identified by the services defined in the contract over a fixed period. The transaction price is the total stated in the contract/invoice, excluding sales tax. Revenue should be recognised over the term of the contract when the performance obligation has been satisfied as defined in the contract. The revenue from providing services is recognised in the accounting period in which the services are rendered and the revenue which to be recognised in future periods is recorded in deferred income.
Interest income is recognised in profit or loss using the effective interest method.
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Interest payable and similar expenses
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Interest payable primarily includes finance cost on deferred income. The finance cost results from the deferred income being measured at the present value of futher receipts discounted at a market rate of interest.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Material accounting policy information (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Material accounting policy information (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
The cost of work in progress comprises design costs, raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity), that relate to revenue that will be recognised in future periods. Recognition and release of work in progress depends on the timing of the work performed and the timing of the corresponding revenue being recognised.
Short-term debtors are measured at transaction price, less any expected credit losses. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
The Company always recognises lifetime ECL for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than ninety days from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Material accounting policy information (continued)
Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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In the application of the Company's accounting policies, which are described in note 2, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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.
Judgement - Deferred tax assets
The recognition of the deferred tax assets is dependent on there being sufficient probable future taxable profits against which the assets could be utilised. The company recognises a partial deferred tax asset on tax losses and other timing differences in the current year based on making an expected profit in year ended 31 March 2025. Given the level of uncertainty in the current economic environment and the uncertainty this creates for medium term taxable profit forecasts, management continues to consider it appropriate not to recognise deferred tax assets beyond this time period.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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The whole of the turnover is attributable to service income from outside the UK which breaks down by geographical destination as follows:
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Other operating (losses)/gains
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Foreign exchange difference - (loss)/gain
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The operating loss is stated after charging / (crediting):
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Depreciation of tangible fixed assets
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Defined contribution pension cost
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During the year, the Company obtained the following services from the Company's auditors and their associates:
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Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Company contributions to defined contribution pension schemes
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The highest paid director received remuneration of £933,506 (2023 - £806,136).
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The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £59,623 (2023 - £58,999).
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Other interest receivable
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Interest payable and similar expenses
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Finance cost on right-of-use assets
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Adjustments to tax charge in respect of prior periods
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Foreign tax on income for the year
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Origination and reversal of timing differences
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
12.Tax on loss (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2023 - lower than) the standard rate of corporation tax in the UK of 25% (2023 - 19%). The differences are explained below:
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Loss before tax multiplied by standard rate of corporation tax in the UK of 25% (2023 - 19%)
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Expenses not deductible for tax purposes
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Other tax adjustments, reliefs and transfers
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Adjustments to tax charge in respect of prior periods
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Remeasurement of deferred tax for changes in tax rates
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Movement in deferred tax not recognised
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Total tax charge for the year
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Charge for the year on owned assets
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Charge for the year on right-of-use assets
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The above right-of-use assets all relate to short-term leasehold property.
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Work in progress (goods to be sold)
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Work in progress recognised in cost of sales during the period as an expense was £24,514,815 (2023: £17,847,308). The write-down of work in progress recognised as an expense during the period amounted to £1,031,328 (2023: £1,047,545).
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Due after more than one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed to group undertakings are unsecured, interest free and are repayable on demand. No interest is payable on outstanding trading balances.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income*
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Amounts owed to group undertakings are unsecured, interest free and are repayable on demand. No interest is payable on outstanding trading balances.
*Refer Note 25 for further details of the restatement. The impact of the restatement extends to disclosures within Notes 18 and 19, as well.
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Creditors: Amounts falling due after more than one year
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*Refer Note 25 for further details of the restatement. The impact of the restatement extends to disclosures within Notes 17 and 19, as well.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Amounts falling due within one year*
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Amounts falling due after more than one year*
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The deferred income is the services to be recognised in the future period.
*Refer Note 25 for further details of the restatement. The impact of the restatement extends to disclosures within Notes 17 and 18, as well.
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Future minimum lease payments for:
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The present value of minimum lease payments is analysed as follows:
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The total cash outflow for leases during the year was £486,395 (2023: £nil) due to a rent free period as agreed in the contractual arrangements.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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(Charged)/credited to profit or loss
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The deferred tax asset is made up as follows:
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Fixed asset temporary differences
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Short term temporary differences
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Losses and other deductions
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Charged to profit or loss
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The Company recognised a dilapidation provision under the terms of the lease agreement of the Turnmill Street office for the lease that commenced in October 2022.
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Allotted, called up and fully paid
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4,500 (2023 - 4,500) Ordinary Share Capital shares of £1,000.00 each
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
The profit and loss account constitutes the cumulative total of all current and prior period profits and
losses.
In 2024 it was identified that there had been an error in the split of deferred income within creditors amounts falling due within one year and amounts falling due after more than one year. The error has a material impact on the prior period.
Therefore, the respective balances outlined below have been restated. There is no impact to the Statement of Comprehensive Income. The error has been corrected by restating each of the affected
financial statement line items for the prior period as follows:
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £775,930 (2023: £876,529). Contributions totalling £nil (2023: £nil) were payable to the fund at the balance sheet date and are included in other creditors.
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TOYOTA CONNECTED EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
The Company's immediate parent company is Toyota Connected Corporation. Its ultimate parent undertaking and controlling party is Toyota Motor Corporation.
The smallest and largest group in which the Company is a member of and which the financial statements are consolidated into is Toyota Motor Corporation. Its registered office address is 1 Toyota-Cho, Toyota City, Aichi Prefecture, Japan 471-8571 where copies of the consolidated financial statements can be obtained.
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