Company registration number 06164695 (England and Wales)
REAZN UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
REAZN UK LIMITED
COMPANY INFORMATION
Directors
Mr G C Keane
Mr C Bever
Company number
06164695
Registered office
Walsall Road
Norton Canes
Cannock
Staffordshire
WS11 9NR
Auditor
Edwards
34 High Street
Aldridge
Walsall
West Midlands
WS9 8LZ
REAZN UK LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 27
REAZN UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Review of the business

The Company's principal activities during the year continued to be the manufacture of high quality zinc based die-casting and galvanising alloys and also the supply of various types of anodes for the plating industry.

 

The key financial and other performance indicators during the year were as follows:

2023
2022
Change
Sales volume (tonnes)
United Kingdom
15,914
13,918
14.34%
Europe/Rest of the World
2,581
6,019
(57.12%)
Total
18,495
19,937
(11.09%)
Sales by region (£000's)
United Kingdom
47,063
46,523
1.16%
Europe/Rest of the World
5,632
19,040
(70.42%)
Total
52,695
65,563
(19.63%)
Turnover (£000's)
Zinc alloys
52,695
65,563
(19.63%)
Other products
-
-
-
52,695
65,563
(19.63%)
Profit/(loss) before taxation (£000's)
4,031
2,546
Equity shareholders' funds  (£000's)
9,605
8,690
Average number of employees (number)
20
22
REAZN UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

Review of the business (continued)

The overall volume of sales decreased year on year by 11.09%. Sales to Europe and rest of the world declined by 70.42% and UK sales increased by 1.16%. As a result of this, turnover decreased by 19.63% to £52.70m. We continued to witness a reluctance of some European customers placing business within UK following Britain's exit from the European Union. In the UK the demand for die-casting and galvanising alloys has slowed amid significant supply chain challenges, which have had worldwide impacts on both financial and natural resources. As a result of this export sales represented 10.69% of total turnover in the year (2022: 29.04%). The company continues to develop new customer relationships within the UK, and the rest of the world.

 

Total profit before taxation of £4,031k (2022: £2,546k) was an improvement compared to the previous year’s performance which can be attributed to the higher London Metal Exchange ("LME") sales premiums.

 

The Company has also managed to remain focused on its goals by maintaining its policy of continuous improvement philosophy to eliminated waste and reduce operating costs.

 

Looking forward, primary zinc alloys sales volumes for 2024 are predicted to be lower than the previous year due to the current economic climate.

 

 

Principal risks and uncertainties

 

Financial risk management

 

Given the size of the Company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set out by the Board of Directors are implemented by the Company's finance department. The department has policies that set out specific guidelines to manage credit, foreign exchange rate and London Metal Exchange (LME) price risk and the circumstances where it would be appropriate to use financial instruments to manage these. The principle risks and uncertainties facing the Company are broadly grouped as; LME price, foreign exchange, liquidity, credit and interest risk.

 

LME price risk

 

The Company's principle risk is in respect of the LME price of special high grade (SHG) zinc. The Company is potentially exposed to movements in the market price of SHG zinc but mitigates this risk through the use of LME Registered Zinc Future Contracts. These contracts fix the LME price of SHG zinc at a specific point in time for the contracted volume of customer orders for delivery at a future date.

 

Foreign exchange risk

 

The Company establishes sales contracts with its customers in pounds sterling, US dollars and euros. To mitigate foreign exchange risk, the Company maintains current accounts in the three trading currencies and further mitigates the risk by converting the contract value in US dollar or euro into pounds sterling via fixed date foreign currency contracts placed with its banking provider.

 

Liquidity risk

 

The Company aims to mitigate liquidity risk by managing cash generation and applying cash collection targets. The Company's turnover fluctuates based on changes in the LME price of SHG zinc, sales volumes and sales premiums. In order to mitigate this risk the Company has made appropriate arrangements to ensure there is sufficient working capital to accommodate these movements. The Company maintains a short term working capital facility with its banking provider that is sufficient for the needs of the business.

 

REAZN UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

Principal risks and uncertainties (continued)

 

Credit risk

 

Credit risk is the risk that one party to a financial instrument will cause a financial loss for other party by failing to discharge an obligation. Company policies are aimed at minimising such losses and require that deferred terms are only granted to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures. The Company maintains a credit insurance policy and transacts with its customers generally up to the credit limits issued by the Underwriters.

 

Interest rate risk

 

The Company hedge exposure at the start of the year have produced no significant impact on revenue that would warrant changes and therefore has not sought to fix interest rates on any of its borrowings.

Going concern

 

The company has considerable financial resources together with long-term contracts with a number of customers and suppliers across geographic areas and industries. The Company meets its day to day working capital requirements through an invoice discounting facility. As a consequence, the directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook.

 

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

 

On behalf of the board

Mr G C Keane
Director
19 April 2024
REAZN UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Results and dividends

The results for the year are set out on page 10.

On 23 November 2023, the directors proposed an interim dividend of €0.24540 per ordinary share in respect of the year ended 31 December 2023. A total of €2,000,000 (£1,741,912) was paid on 24 November 2023.

 

The directors recommend that a final dividend of €0.17791 per ordinary share (€1,450,000) is proposed in respect of the year ended 31 December 2023. This will be paid during the 2024 financial year.

Directors

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

Mr G C Keane
Mr C Bever
Directors' indemnities

The Company maintains liability insurance for its directors and officers. This is a qualifying indemnity provision for the purposes of the Companies Act 2006 and has been in place during the year and to date of signing the financial statements.

Supplier payment policy

The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).

 

The company's current policy concerning the payment of trade creditors is to:

 

Trade creditors of the company at the year end were equivalent to 2 day's purchases, based on the average daily amount invoiced by suppliers during the year.

Research and development

The Company is continuously improving its existing furnace operation in order to fulfil its obligations and meet the targets set under the climate change agreement. The Company works closely with the Environment Agency to ensure that all operational changes comply with the IPPC permit.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

REAZN UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Other matters

Following the Russian invasion of Ukraine and subsequent global response, the metal market and supply chains have become increasingly volatile. The Company are not currently exposed to any significant risk, but management continue to closely monitor the evolution of this conflict, including how it may affect the company and the economy further into the future. We currently have an appropriate response plan in place, and we will continue to monitor and assess the volatility and respond accordingly.

 

Following the full withdrawal of the UK from the EU, the European market is adapting to new trading rules under the EU–UK Trade and Cooperation Agreement. The Company are not currently exposed to any significant risk due to strategic changes in the business, but management continue to closely monitor trading possibilities with the EU, including how it may affect the company and the UK economy further into the future. We currently have an appropriate response plan in place, and we will continue to monitor and assess the situation and respond accordingly.

On behalf of the board
Mr G C Keane
Director
19 April 2024
REAZN UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

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

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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

REAZN UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REAZN UK LIMITED
- 7 -
Opinion

We have audited the financial statements of Reazn UK Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

REAZN UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF REAZN UK LIMITED
- 8 -
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 directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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.

We obtained an understanding of the legal and regulatory frameworks within which the Company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, Taxation legislation and Health & Safety compliance specifically REACH and COSHH regulations.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be in the following areas: timing of recognition of income, the override of controls by management, inappropriate treatment of non-routine transactions and areas of estimation uncertainty, in particular those of useful lives of tangible fixed assets, stock valuation and bad debt provisioning. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, review and discussion of non-routine transactions, sample testing on the posting of journals and income transactions and review of accounting estimates for biases.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

REAZN UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF REAZN UK LIMITED
- 9 -
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 an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

David Webb FCA (Senior Statutory Auditor)
For and on behalf of Edwards
26 April 2024
Chartered Accountants
Statutory Auditor
34 High Street
Aldridge
Walsall
West Midlands
WS9 8LZ
REAZN UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£000
£000
Turnover
3
52,695
65,563
Cost of sales
(46,164)
(60,944)
Gross profit
6,531
4,619
Administrative expenses
(2,057)
(1,968)
Other operating income
11
59
Operating profit
4
4,485
2,710
Interest receivable and similar income
8
16
7
Interest payable and similar expenses
9
(470)
(171)
Profit before taxation
4,031
2,546
Tax on profit
10
(975)
(526)
Profit and total comprehensive income for the financial year
3,056
2,020

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

REAZN UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£000
£000
£000
£000
Fixed assets
Tangible fixed assets
12
636
693
Current assets
Stocks
13
10,193
2,359
Debtors
14
12,689
8,811
22,882
11,170
Creditors: amounts falling due within one year
15
(13,656)
(2,917)
Net current assets
9,226
8,253
Total assets less current liabilities
9,862
8,946
Creditors: amounts falling due after more than one year
15
(203)
(184)
Provisions for liabilities
Deferred tax liabilities
19
(54)
(72)
Net assets
9,605
8,690
Capital and reserves
Called up share capital
21
8,150
8,150
Profit and loss reserves
1,455
540
Total equity
9,605
8,690
The financial statements were approved by the board of directors and authorised for issue on 19 April 2024 and are signed on its behalf by:
Mr G C Keane
Director
Company registration number 06164695 (England and Wales)
REAZN UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Retained earnings
Total
Notes
£000
£000
£000
Balance at 1 January 2022
8,150
83
8,233
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
2,020
2,020
Dividends
11
-
(1,563)
(1,563)
Balances at 31 December 2022
8,150
540
8,690
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
3,056
3,056
Dividends
11
-
(2,141)
(2,141)
Balances at 31 December 2023
8,150
1,455
9,605
REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information

Reazn UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Walsall Road, Norton Canes, Cannock, Staffordshire, WS11 9NR. The company's principal activities and nature of its operations are disclosed in the director's report.

1.1
Accounting convention

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

The financial statements have been prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: derivative financial instruments.

 

In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"), but makes amendments where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.

 

The Company's ultimate parent undertaking as at 31 December 2023, Reazn Group S.A., includes the Company in its consolidated financial statements. The consolidated financial statements of Reazn Group S.A. available to the public and may be obtained from Reazn Group S.A. at 19-21, Route d'Arlon, 8009 Strassen, Luxembourg.

The company has taken advantage of the following disclosure exemptions under FRS 101:

 

 

As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to share based payments, financial instruments, capital management, presentation of a cash flow statement, presentation of comparative information in respect of certain assets, standards not yet effective, impairment of assets, business combinations, discontinued operations and related party transactions.

REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.2
Going concern

The Company's business activities, together with the factors likely to affect its future developments, performance and position are set out in the Strategic report on pages 1, 2 and 3. The financial position of the Company is described on pages 11 and 12. The liquidity and borrowings facility together with the Company's policies on financial instruments, hedging activities and liquidity risk are described in the financial risk management section of the Strategic report on pages 2 and 3.true

 

The Company has considerable financial resources together with long-term contracts with a number of customers and suppliers across geographic areas and industries. The Company meets its day to day working capital requirements through an invoice discounting facility. As a consequence, the directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook.

 

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

1.3
Turnover

Turnover is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of the goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts, volume rebates and exclusive of VAT.

 

The timing of the transfer of risks and rewards varies depending on the individual terms of the sales agreement. For sales of zinc alloys, the transfer usually occurs when the sales orders are closed out and the goods are delivered.

1.4
Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses.

 

Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Right of use asset - land and buildings
Over the term of the lease
Right of use asset - plant and office equipment
Over the term of the lease
Right of use asset - motor vehicles
Over the term of the lease
Plant and office equipment
10% straight line
Computer hardware and software
10-20% straight line
Motor vehicles
33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.

REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.5
Impairment excluding stocks and deferred tax assets

Financial assets (including trade and other debtors)

 

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

 

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. For financial instruments measured at cost less impairment an impairment is calculated as the difference between its carrying amount and the best estimate of the amount that the Company would receive for the asset if it were to be sold at the reporting date. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Non-financial assets

 

The carrying amounts of the Company's non-financial assets; other than stocks and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

 

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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 the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit").

 

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss.

 

In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

1.6
Stocks

Stocks are stated at the lower of cost and net realisable value. Cost includes material, direct labour and a proportion of production overheads as appropriate.

REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.7
Non-derivative financial instruments

Non-derivative financial instruments comprise, trade and other debtors, cash and cash equivalents, and trade and other creditors:

 

Trade and other debtors

 

Trade and other debtors are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses.

 

Trade and other creditors

 

Trade and other creditors are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

 

Interest-bearing borrowings

 

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.

1.8
Dividend

Dividends are only recognised as a liability to the extent that they are declared prior to the year end. Unpaid dividends that do not meet these criteria are disclosed in the notes to the financial statements.

1.9
Other financial liabilities
The company has elected not to apply the provisions of the reporting framework under FRS101 relating to "Other Financial Instrument Issues".

The directors have concluded that compliance with the provisions set out in this section of the standard would lead to the financial statements not showing a true and fair view.

FRS101 requires that derivatives should be initially recognised at fair value on the date a derivative contract is entered into and subsequently re-measured at their fair value, with changes in fair value being recognised in profit and loss, unless hedge accounting can be applied.

Given the nature of the business, these contracts are directly linked to sales and purchase contracts.

As the value of the sales and purchase contracts cannot be reliably measured until both elements have been completed, to include related derivatives at fair value at the Balance Sheet date would not give a true and fair reflection of the financial position at the year end.

Any profit or loss on derivatives will therefore be included in the period in which the sale and purchase contract is complete and can be reliably measured.

Forward foreign contacts and foreign exchange swaps are measured at fair value with any changes recognised in the profit and loss.
REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other tangible fixed assets. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.15

Expenses

Interest receivable and interest payable

 

Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method.

2
Critical accounting estimates and judgements

The preparation of the financial statements in conformity with FRS101 requires the management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from the estimates.

 

Information about judgements in applying accounting policies that have the most significant effect on amounts recognised in the financial statements are included in the following notes:

 

3
Turnover

Turnover is the total amount charged, exclusive of VAT, in respect of goods and services supplied by the Company. All turnover is attributable to the Company's continuing activity, the manufacture of high quality zinc based die-casting and galvanising alloys.

2023
2022
£000
£000
Turnover analysed by geographical market
United Kingdom
47,063
46,523
Rest of Europe
4,249
16,920
Other
1,383
2,120
52,695
65,563
REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£000
£000
Exchange (gains)/losses
(25)
23
Depreciation of property, plant and equipment
235
348
(Profit)/loss on disposal of tangible fixed assets
-
553
Cost of inventories recognised as an expense
44,755
59,409
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£000
£000
For audit services
Audit of the financial statements of the company
23
20
For other services
Tax services
2
2
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Production
9
11
Sales and distribution
3
3
Administration
8
8
Total
20
22

Their aggregate remuneration comprised:

2023
2022
£000
£000
Wages and salaries
901
957
Social security costs
100
110
Pension costs
70
75
1,071
1,142

Pensions

 

Amounts outstanding for pensions as at 31 December 2023 were £38,000 (2022 - £35,000).

 

The Company operates a defined contribution 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.

REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
7
Directors' remuneration
2023
2022
£000
£000
Remuneration for qualifying services
274
267
Company pension contributions to defined contribution schemes
31
30
305
297

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
274
267
Company pension contributions to defined contribution schemes
31
30
8
Interest receivable and similar income
2023
2022
£000
£000
Interest income
Other interest income
16
7
9
Interest payable and similar expenses
2023
2022
£000
£000
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
461
170
Other interest
9
1
470
171
REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Income tax expense
2023
2022
£000
£000
Current tax
UK corporation tax on profits for the current period
993
652
Adjustments in respect of prior periods
(1)
-
0
Total UK current tax
992
652
Deferred tax
Origination and reversal of temporary differences
(17)
(137)
Adjustment in respect of prior periods
-
0
11
(17)
(126)
Total tax charge
975
526

The charge for the year can be reconciled to the profit per the statement of comprehensive income as follows:

2023
2022
£000
£000
Profit before taxation
4,031
2,546
Expected tax charge based on a corporation tax rate of 25.00%
1,008
484
Effect of expenses not deductible in determining taxable profit
29
16
Adjustment in respect of prior years
(1)
-
0
Deferred tax adjustments in respect of prior years
-
11
Change in tax rate
(61)
16
Tax effect of enhanced capital allowances
-
(1)
Taxation charge for the year
975
526

Factors that may affect future tax charges

 

In October 2022, the UK Government announced that the proposed increase in the UK Corporation Tax rate to 25% will go ahead as planned starting 1 April 2023. As such, the deferred tax has been recognised at future tax rates based on the estimated timing of reversal.

There were no other factors that may affect future tax charges.

REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
11
Dividends
2023
2022
2023
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£000
£000
Ordinary shares
Final dividend paid
0.05
-
399
-
Interim dividend paid
0.21
0.19
1,742
1,563
0.26
0.19
2,141
1,563

On 23 November 2023, the directors proposed an interim dividend of €0.24540 per ordinary share in respect of the year ended 31 December 2023. A total of €2,000,000 (£1,741,912) was paid on 24 November 2023. On 27 April 2023 a final dividend for the 2022 financial year of €0.05521 per ordinary share was declared totalling €450,000 (£399,006). This was paid on the 2 May 2023.

 

In addition to the above, a final dividend of €0.17791 per ordinary share (€1,450,000) is proposed in respect of the year ended 31 December 2023. This will be paid during the 2024 financial year.

REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
12
Tangible fixed assets
Right of use asset - land and buildings
Right of use asset - plant and office equipment
Right of use asset - motor vehicles
Plant and office equipment
Computer hardware and software
Motor vehicles
Total
£000
£000
£000
£000
£000
£000
£000
Cost
At 1 January 2023
301
39
44
1,421
235
14
2,054
Additions
-
0
164
-
0
12
1
-
0
177
Disposals
-
0
(39)
-
0
-
0
-
0
-
0
(39)
At 31 December 2023
301
164
44
1,433
236
14
2,192
Accumulated depreciation and impairment
At 1 January 2023
50
33
4
1,092
168
14
1,361
Charge for the year
101
12
15
84
23
-
0
235
Eliminated on disposal
-
0
(39)
-
0
-
0
-
0
-
0
(39)
At 31 December 2023
151
6
19
1,176
191
14
1,557
Carrying amount
At 31 December 2023
150
158
25
257
45
-
0
635
At 31 December 2022
251
6
40
329
67
-
0
693
REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
13
Stocks
2023
2022
£000
£000
Raw materials
7,219
1,205
Finished goods
2,974
1,154
10,193
2,359

 

14
Debtors
2023
2022
£000
£000
Trade debtors
11,491
8,605
Amounts owed by fellow group undertakings
3
-
0
Derivative financial instruments
12
16
Other debtors
57
7
Prepayments and accrued income
1,126
183
12,689
8,811
15
Creditors
Due within one year
Due after one year
2023
2022
2023
2022
Notes
£000
£000
£000
£000
Loans and overdrafts
16
11,636
1,798
-
0
-
0
Creditors
17
295
343
-
0
-
0
Corporation tax
347
653
-
-
Other taxation and social security
1,238
7
-
-
Lease liabilities
18
140
116
203
184
13,656
2,917
203
184
16
Loans and overdrafts
Secured borrowings at amortised cost
Bank overdrafts
11,636
1,798
REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Loans and overdrafts
(Continued)
- 25 -
Analysis of loans and overdrafts
2023
2022
£000
£000
Due within one year liabilities
11,636
1,798
Terms and debt repayment schedule
Face value
Carrying amount
Face value
Carrying amount
2023
2023
2022
2022
£000
£000
£000
£000
Receivables facility
11,636
11,636
1,798
1,798
11,636
11,636
1,798
1,798
The receivables facility is repayable on demand, attracts interest at market rate and is secured against certain trade debtor balances.
17
Creditors: amounts falling due within one year
2023
2022
£000
£000
Trade creditors
93
93
Amount due to parent undertaking
24
19
Amounts due to fellow group undertakings
5
26
Accruals and deferred income
172
204
Other creditors
1
1
295
343
REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
18
Lease liabilities

At 31 December 2023, under IFRS 16, right of use assets capitalised on the statement of financial position totalled £509,000 (2022 - £384,000) with lease liabilities of £343,000 (2022 - £300,000) included in creditors. During the year ended 31 December 2023, the depreciation charge of right of use assets is £128,000 (2022 - £103,000) and interest on lease liabilities is £9,000 (2022 - £1,000).

 

When measuring lease liabilities, the company discounted lease payments using notional borrowing rates. For the year ended 31 December 2023, the average notional borrowing rate was 6.60% (2022 - 4.97%).

 

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

2023
2022
£000
£000
Current liabilities
140
116
Non-current liabilities
203
184
343
300
19
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

Accelerated capital allowances
Other timing differences
Total
£000
£000
£000
Deferred tax liability at 1 January 2022
198
-
198
Deferred tax movements in prior year
Credit to comprehensive income
(121)
(5)
(126)
Deferred tax liability at 1 January 2023
77
(5)
72
Deferred tax movements in current year
Credit to comprehensive income
(15)
(3)
(18)
Deferred tax liability at 31 December 2023
62
(8)
54
2023
2022
£000
£000
Deferred tax liabilities
54
72
REAZN UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£000
£000
Charge to comprehensive income in respect of defined contribution schemes
70
75

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.

21
Share capital
2023
2022
£000
£000
Ordinary share capital
Authorised
8,150,001 Ordinary shares of £1 each
8,150
8,150
Issued and fully paid
8,150,001 Ordinary shares of £1 each
8,150
8,150
8,150
8,150
22
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is deemed to be that of that directors as disclosed in note 7.

Other information

The company has taken advantage of the exemption conferred within FRS101 section 8(k) not to disclose transactions between wholly owned members of the same group.

23
Ultimate parent undertaking and controlling party

Reazn Group S.A, a company registered in Luxembourg, are the ultimate parent company by virtue of their 100% ownership of the ordinary share capital of the company. Publicly available group accounts are available from Reazn Group's registered office at 19-21, Route d'Arlon, 8009 Strassen, Luxembourg.

2023-12-312023-01-01Mr G C KeaneMr C BeverfalseCCH SoftwareiXBRL Review & Tag 2022.2061646952023-01-012023-12-3106164695bus:Director12023-01-012023-12-3106164695bus:Director22023-01-012023-12-3106164695bus:RegisteredOffice2023-01-012023-12-31061646952023-12-31061646952022-01-012022-12-3106164695core:ContinuingOperations2023-01-012023-12-3106164695core:RetainedEarningsAccumulatedLosses2023-01-012023-12-3106164695core:RetainedEarningsAccumulatedLosses2022-01-012022-12-31061646952022-12-31061646952021-12-3106164695core:AcceleratedTaxDepreciationDeferredTax2022-12-3106164695core:AcceleratedTaxDepreciationDeferredTax2023-12-3106164695core:ShareCapital2023-12-3106164695core:ShareCapital2022-12-3106164695core:RetainedEarningsAccumulatedLosses2023-12-3106164695core:RetainedEarningsAccumulatedLosses2022-12-3106164695core:ShareCapitalOrdinaryShares2023-12-3106164695core:ShareCapitalOrdinaryShares2022-12-3106164695core:UKTax2023-01-012023-12-3106164695core:UKTax2022-01-012022-12-3106164695core:Goodwillcore:ContinuingOperations2023-12-3106164695core:LandBuildingscore:OwnedOrFreeholdAssets2022-12-3106164695core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3106164695core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-12-3106164695core:PlantMachinery2022-12-3106164695core:ComputerEquipment2022-12-3106164695core:MotorVehicles2022-12-31061646952022-12-3106164695core:LandBuildingscore:OwnedOrFreeholdAssets2023-12-3106164695core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-12-3106164695core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2023-12-3106164695core:ComputerEquipment2023-12-3106164695core:MotorVehicles2023-12-3106164695core:LandBuildingscore:OwnedOrFreeholdAssets2023-01-012023-12-3106164695core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-01-012023-12-3106164695core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2023-01-012023-12-3106164695core:PlantMachinery2023-01-012023-12-3106164695core:ComputerEquipment2023-01-012023-12-3106164695core:MotorVehicles2023-01-012023-12-3106164695core:PlantMachinery2023-12-3106164695core:LandBuildingscore:OwnedOrFreeholdAssets2022-12-3106164695core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3106164695core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-12-3106164695core:PlantMachinery2022-12-3106164695core:ComputerEquipment2022-12-3106164695core:MotorVehicles2022-12-3106164695core:CurrentFinancialInstruments2023-12-3106164695core:CurrentFinancialInstruments2022-12-3106164695core:Non-currentFinancialInstruments2023-12-3106164695core:Non-currentFinancialInstruments2022-12-3106164695core:WithinOneYear2023-12-3106164695core:WithinOneYear2022-12-3106164695core:AfterOneYear2023-12-3106164695core:AfterOneYear2022-12-3106164695core:FinancialLiabilitiesAmortisedCostcore:Secured2023-12-3106164695core:FinancialLiabilitiesAmortisedCostcore:Secured2022-12-3106164695bus:PrivateLimitedCompanyLtd2023-01-012023-12-3106164695bus:FRS1012023-01-012023-12-3106164695bus:Audited2023-01-012023-12-3106164695bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP