REGISTERED NUMBER: |
SWAN ALLOY UK LTD. |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED |
31 DECEMBER 2023 |
REGISTERED NUMBER: |
SWAN ALLOY UK LTD. |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED |
31 DECEMBER 2023 |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Statement of Directors' Responsibilities | 6 |
Report of the Independent Auditors | 7 |
Income Statement | 10 |
Other Comprehensive Income | 11 |
Balance Sheet | 12 |
Statement of Changes in Equity | 13 |
Cash Flow Statement | 14 |
Notes to the Cash Flow Statement | 15 |
Notes to the Financial Statements | 16 |
SWAN ALLOY UK LTD. |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
And Statutory Auditors |
Ground Floor Cardigan House |
Castle Court |
Swansea Enterprise Park |
Swansea |
SA7 9LA |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their strategic report for the year ended 31 December 2023. |
REVIEW OF BUSINESS |
The company's principal activity is the recycling of valuable aluminium waste materials for sale to the aluminium (wrought and casting alloy) industries within the UK and mainland Europe. There have been no significant changes in the company's principal activities in the year under review. |
The company is a wholly owned subsidiary of Aurea SA, France. |
The company's key financial performance indicators during the year were as follows: |
2023 | 2022 | Change (% | ) |
Turnover | £53.4m | £63.3m | (15.6% | ) |
Operating profit | £3.2m | £6.6m | (51.5% | ) |
Profit / (loss) after tax | £(1.65m | ) | £5.3m | (131.1% | ) |
Average number of employees | 55 | 52 |
The decrease in turnover, operating profit and resulting loss after tax was due to the lower LME and P1020 premiums during the year and the write off of amounts owed by group entities as a result of the sale of the company to Aurea SA, France. During the period under review the business was at full capacity. The number of employees increased within the year. |
PRINCIPAL RISKS AND UNCERTAINTIES |
Company management are responsible for managing any risks and uncertainties and for working with the Aurea group to understand and mitigate the risks that the company faces. |
The company has rigorous budgeting and forecasting processes against which performance is monitored and any exposure to business risk can be identified and appropriate plans and actions put in place. A major focus in 2024 will be productivity improvement activities to offset the current increasing costs. The company does not consider there to be any major risks to the business in the near future. |
Credit risk |
The company's customers are third parties in the United Kingdom and Europe. The company has no history of credit risk from its customers, but the company has a comprehensive credit policy in place that includes credit risk validations, credit limits and regular follow up of amounts due to the company. |
Currency risk |
The company has transactional currency exposures which arise from sales in Euro and purchases in currencies other than its functional currency (GBP). Potential exposures to foreign currency exchange rate movements are monitored through monthly cash forecasting process. |
Commodity price risk |
The company's sale of aluminium is affected by the fluctuation of the prices in London Metal Exchange. The potential exposure to the price fluctuations are monitored at a local level at Swan Alloy . |
Liquidity and cash flow risks |
The company aims to mitigate liquidity risk by managing cash generation by its operations and applying cash collection targets throughout the company. The company manages cash flow risk by careful negotiation of terms with customers and suppliers and maintains available funds to enable them to meet their liabilities as they fall due. |
Competitive risk |
The company has various competitors Swan Alloy UK Ltd. business leaders' focus is on retaining our current business and gaining new business. |
Legislative risk |
The company operates in a regulated industry and products are subject to rigorous manufacturing standards. |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
SECTION 172(1) STATEMENT |
In accordance with section 172(1) of The Companies Act 2006 the directors of the company are required to act in a way 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. |
Taking this into account, the directors of Swan Alloy UK Ltd. must have regard (among other matters) to: |
- | The likely long term consequences of any decision |
- | The interest of the company's employees |
- | The need to foster the company's business relationship with suppliers, customers and others |
- | The impact of the company's operations on our community and environment |
- | Maintenance of the company's reputation for the highest standards of the business conduct |
- | The need to act fairly as between members of the company |
The Board welcomes the reporting requirement introduced by Section 172, and sees it as an opportunity to explain how these considerations have informed and helped shape strategy and decision making. |
Stakeholder engagement is embedded within the detailed corporate governance framework operated by the Board, and the long-term consequences of its strategic decision making are reviewed and assessed at local leadership meetings, through its Committees and through its oversight of decision making delegated to executive management. The Board takes its Section 172 obligations very seriously, and applies Section 172 in the context of its strategic direction of the Company and its meetings, including the following specific ways: |
- | Strategic priorities - Directors review progress against our strategic priorities with the local leadership team. |
- | Health and safety of staff - Management and its Committees conduct regular reviews of safety matters and environmental performance, with the aim of continually improving site safety and minimising environmental impact. |
- | Financial discipline - Leadership meetings review executive management's focus around fiscal discipline, and delivery of solid and stable earnings. |
- | People - Leadership approaches all its decisions which may effect employees by reference to our Swan Alloy Corporate values. |
- | Governance - Our governance requires consistently high standard of business conduct and the Board review all decisions in the light of this strategic priority. Strong cultural leadership and governance are seen by the Board as critical elements underpinning the continuing success of the Company. |
- | Operational availability and reliability - Executive management is charged by the Board with maintaining the strong operational presence expected by our customers, complete regulatory compliance expected by our suppliers and others, with reports on these areas provided to each Board meeting. Board decisions are taken in a way which furthers both the long-term financial success of the Company and the interests of our stakeholders. |
FUTURE DEVELOPMENTS |
Demand for many of our products is impacted by regional economic factors in Europe, including GDP and industrial production. We believe that production and sales will remain the same in 2024 as the economic outlook and demand for our products remains strong. |
ON BEHALF OF THE BOARD: |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of |
DIVIDENDS |
No interim dividend was paid during the year. The directors recommend a final dividend of £ |
The total distribution of dividends for the year ended 31 December 2023 will be £ |
DIRECTORS |
The directors who have held office during the period from 1 January 2023 to the date of this report are as follows: |
ENVIRONMENTAL |
Swan Alloy UK Limited recognises the importance of the environment in which it operates and takes this extremely seriously. The company operates within group policies and monitors its impact on the environment and local community continuously, striving for improvements in health, safety, and environmental impact via initiatives and training of employees. |
Good environmental plant performance in 2023 has led to a successful audit and the retention of the ISO14001and ISO 9001 accreditations. |
GOING CONCERN |
The directors are required to consider the application of the going concern concept when signing the financial statements. The principal element required to meet the test is sufficient liquidity for a period of twelve months subsequent to the date of signing the accounts. |
The company's financial forecasts, taking into consideration the current environment, show that the company is expected to remain profitable and generate positive cash flows giving the company the ability to continue to operate for the 12 months from when the financial statements are authorised for issue and meet any liabilities as they fall due. |
Whilst there always remains an element of uncertainty within any business, the directors have considered that any risk to the cashflows of the company remain relatively very low. Therefore, any uncertainties will not change the cashflows within the company and based on these facts and the financial position and the forecasted cashflows of the company have concluded it is appropriate to prepare the financial statements on the going concern basis. |
ENGAGEMENT WITH EMPLOYEES |
The company encourages participation of employees in all matters relevant to them through meetings and bulletin updates. Union Representatives regularly attend local union meetings and are regularly consulted on matters affecting them and their member's interests. |
STREAMLINED ENERGY AND CARBON REPORTING |
Swan Alloy UK Limited is committed to producing meaningful climate disclosures in line with those required by The Companies (Directors' Report) and Limited Liability Partnership (Energy and Carbon Report) Regulations 2018. The table below provides details of the information required by the 2018 Regulations. |
The footprint has been calculated in accordance with the Greenhouse Gas (GHG) Protocol and Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance. Activity data has been converted into carbon emissions using Department of Environment, Food and Rural Affairs (DEFRA) published emission factors and the data provided by the Company. The data is presented in tonnes of carbon dioxide equivalent (t CO2e). |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | Kwh ('000) | t CO2e | Kwh ('000) | t CO2e |
Scope 1 - Gas | 53,242 | 9,752 | 49,466 | 9,060 |
Fuel transport | 2,054 | 521 | 1,503 | 532 |
(a) | 55,297 | 10,272 | 48,009 | 9,592 |
Scope 2 - Electricity | (b) | 12,284 | 2,608 | 12,154 | 2,581 |
67,581 | 12,881 | 61,816 | 12,173 |
Emission intensity (Scopes 1 and | 241.13 | tCO2e per | 192.43 | tCO2e per |
2) | £1m of | £1m of |
revenue | revenue |
Notes |
(a) | Scope 1 | - | Direct emissions from owned or controlled sources |
(b) | Scope 2 | - | Indirect emissions from generation of purchased energy |
Energy efficiency |
Swan Alloy UK Limited recognises that the promotion and good management of energy usage is essential to sustaining and keeping in balance with the environment and environment resources and the company is committed to working towards energy efficiency. |
Swan Alloy UK Limited is constantly reviewing and monitoring its energy efficiency and is actively looking to drive energy efficiency within all areas of the business. The company has upgraded metering on key equipment and has upgraded the lighting on site. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Bevan Buckland LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SWAN ALLOY UK LTD. |
Opinion |
We have audited the financial statements of Swan Alloy Uk Ltd. (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SWAN ALLOY UK LTD. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page six, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
Extent to which the audit was considered capable of detecting irregularities, including fraud |
We identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, and then, design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. |
We discussed our audit independence complying with the Revised Ethical Standard 2019 with the engagement team members whilst planning the audit and continually monitored our independence throughout the process. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Identifying and assessing potential risks related to irregularities. |
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following: |
- | enquiring of management, including obtaining and reviewing support documentation, concerning the company's policies and procedures relating to: |
- | identifying, evaluating, and complying with laws and regulations and whether they were aware of any instances of non-compliance; |
- | detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; |
- | internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; |
- | discussing among the engagement team how and where fraud might occur in the Financial Statements and any potential indicators of fraud. |
- | obtaining an understanding of the legal and regulatory frameworks that the company operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect on the operations of the company, The key laws and regulations we considered in this context included the UK Companies Act and relevant tax legislation. |
Audit response to risks identified |
In addition to the above, our procedures to respond to risks identified included the following: |
- | reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations; |
- | enquiring of management concerning actual and potential litigation and claims; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; |
- | reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; |
- | in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; |
- | assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and |
- | evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SWAN ALLOY UK LTD. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants |
And Statutory Auditors |
Ground Floor Cardigan House |
Castle Court |
Swansea Enterprise Park |
Swansea |
SA7 9LA |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £'000 | £'000 | £'000 | £'000 |
TURNOVER | 4 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
2,606 | 1,610 |
2,780 | 6,629 |
Other operating income |
OPERATING PROFIT | 6 |
Write off of former group |
balances | 7 |
(808 | ) | 6,629 |
Interest receivable and similar income |
(740 | ) | 6,677 |
Interest payable and similar expenses | 8 |
(LOSS)/PROFIT BEFORE TAXATION | ( |
) |
Tax on (loss)/profit | 9 |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR | ( |
) |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £'000 | £'000 |
(LOSS)/PROFIT FOR THE YEAR | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
BALANCE SHEET |
31 DECEMBER 2023 |
2023 | 2022 |
Notes | £'000 | £'000 | £'000 | £'000 |
FIXED ASSETS |
Tangible assets | 11 |
CURRENT ASSETS |
Stocks | 12 |
Debtors | 13 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 14 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 15 | ( |
) | ( |
) |
PROVISIONS FOR LIABILITIES | 17 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Retained earnings | 19 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£'000 | £'000 | £'000 |
Balance at 1 January 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2023 |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £'000 | £'000 |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest element of hire purchase payments paid | ( |
) | ( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Capital repayments in year | ( |
) | ( |
) |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
(Decrease)/increase in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
6,540 |
Cash and cash equivalents at end of year | 2 | 1,207 | 10,063 |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
NOTES TO THE CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£'000 | £'000 |
(Loss)/profit before taxation | ( |
) |
Depreciation charges |
Profit on disposal of fixed assets | ( |
) |
Finance costs | 38 | 25 |
Finance income | (68 | ) | (48 | ) |
148 | 7,469 |
Increase in stocks | ( |
) | ( |
) |
Decrease in trade and other debtors |
Increase in trade and other creditors |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£'000 | £'000 |
Cash and cash equivalents | 1,207 | 10,063 |
Bank overdrafts |
1,207 | 10,063 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£'000 | £'000 |
Cash and cash equivalents | 10,063 | 6,540 |
Bank overdrafts |
10,063 | 6,540 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.1.23 | Cash flow | At 31.12.23 |
£'000 | £'000 | £'000 |
Net cash |
Cash at bank | 10,063 | (8,856 | ) | 1,207 |
10,063 | ( |
) | 1,207 |
Debt |
Finance leases | (465 | ) | 51 | (414 | ) |
(465 | ) | 51 | (414 | ) |
Total | 9,598 | (8,805 | ) | 793 |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | STATUTORY INFORMATION |
Swan Alloy Uk Ltd. is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Going Concern |
On the basis of their assessment of the company's financial position, the company's directors have a reasonable expectation that the company will be able to continue in operational existence for 12 months from when the financial statements are authorised for issue. The directors are required to consider the application of the going concern concept when signing the financial statements. The principal element required to meet the test is sufficient liquidity for a period of twelve months subsequent to the date of signing the accounts. |
The company's financial forecasts, taking into consideration the current environment, show that company is expected to remain profitable and generate positive cash flows giving the company the ability to continue to operate for the foreseeable and meet any liabilities as they fall due. |
In view of the assessment referred to above, the directors believe that the company is well positioned to withstand any current economic uncertainty. The directors have considered the impact on the cashflows of the company and consider that any uncertainties will not change the cashflows within the company and based on these facts and the financial position and the forecasted cashflows of the company have concluded it is appropriate to prepare the financial statements on the going concern basis. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Tangible fixed assets |
Short leasehold | - |
Plant and Machinery | - |
If there is an indication that there has been a significant change in the depreciation rate or residual value of an asset, the depreciation of that asset is revised prospectively to reflect the new expectations. |
A fixed asset is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. 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 credited or charged to the income statement. |
Impairment of fixed assets |
The company performs impairment testing where there are any indicators or impairment. Impairment is calculated as the difference between the carrying value and the recoverable value of the asset. Recoverable value is the higher of net realisable value and estimated value in use at the date the impairment loss is recognised. Value in use represents the present value of expected future discounted cash flows. If incurred, impairment is recognised immediately in the income statement. |
Where an impairment loss subsequently reverses, the carrying value of the asset is increased to the revised estimate of the recoverable amount, but so that the increased carrying value does not exceed the carrying value that would have been determined if no impairment loss had been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately as a credit to the income statement. |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Cost includes all direct costs incurred in bringing each product to its present location and condition, as follows: |
Finished Goods | cost of direct materials and labour plus attributable overheads based on a normal level of activity. |
Raw Materials | cost of direct materials |
Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal. |
Financial instruments |
The company enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as trade and other receivables and payables, amounts due to and from related parties. |
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
Debt instruments like loans and other receivables and payables are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and subsequently, at the present value of future payments discounted at a market rate of interest for a similar debt instrument. |
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying value and the present value of estimated cash flows discounted at the assets original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the best estimate, which is an approximation, of the amount that the company would receive for the asset if it were to be sold at the reporting date. |
Financial assets and liabilities are offset and the net amount recognised in the balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. At each reporting date non-financial assets not carried at fair value, such as property, plant and equipment are reviewed to determine whether there is an indication that an asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any asset or group of related assets, which is the higher of value in use and the fair value less costs to sell, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised immediately in profit or loss. |
If an impairment loss is subsequently reversed, the carrying amount of the asset or group of related assets is increased to the revised estimate of its recoverable amount, but not to exceed the amount that would have been determined had no impairment loss been recognised for the asset or group of related assets in prior periods. A reversal of an impairment loss is recognised immediately in profit or loss. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
There were no judgements or material estimation uncertainties affecting the reported financial performance in the current or prior year. |
4. | TURNOVER |
The turnover and loss (2022 - profit) before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by class of business is given below: |
2023 | 2022 |
£'000 | £'000 |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£'000 | £'000 |
United Kingdom |
Europe |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
5. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£'000 | £'000 |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Production | 37 | 34 |
Administrative | 8 | 8 |
Maintenance | 10 | 10 |
The directors who served the company during the year were also directors of other companies in the Aurea SA group. The directors' services to the Company do not occupy a significant amount of time. As such, the directors do not consider that they have received any remuneration for their incidental services to the Company for the years ended 31 December 2023 and 31 December 2022. The costs of the director' remuneration is reflected in the financial statement of the group companies. |
6. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£'000 | £'000 |
Other operating leases |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) |
Foreign exchange differences | ( |
) |
Auditors remuneration |
7. | EXCEPTIONAL ITEMS |
2023 | 2022 |
£'000 | £'000 |
Write off of former group |
balances | ( |
) |
On 31 March 2023, Real Alloy announced the completion of the sale of European aluminium and magnesium recycling operations to Speira. Included in the transaction were the seven Real Alloy European facilities that employ approximately 600 people in Germany, Norway, France and the United Kingdom. |
On 14 April 2023, Speira announced the sale of Real Alloy UK Ltd. and RVA, France to Aurea SA, France. |
Following this sale, amounts owing from group entities were released to the Profit and Loss account as part of the sale agreement. |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£'000 | £'000 |
Hire purchase |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
9. | TAXATION |
Analysis of the tax charge |
The tax charge on the loss for the year was as follows: |
2023 | 2022 |
£'000 | £'000 |
Current tax: |
UK corporation tax |
Deferred tax |
Tax on (loss)/profit |
UK corporation tax has been charged at 25% (2022 - 19%). |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£'000 | £'000 |
(Loss)/profit before tax | ( |
) |
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of (2022 - |
( |
) |
Effects of: |
Expenses not deductible for tax purposes |
Depreciation in excess of capital allowances | - |
Adjustments to tax charge in respect of previous periods | ( |
) |
Effect of change in tax rates | (47 | ) | 34 |
Total tax charge | 863 | 1,309 |
From 1st April 2023, the corporation tax rate in the UK increased to 25% from 19%. |
10. | DIVIDENDS |
2023 | 2022 |
£'000 | £'000 |
Ordinary shares of £1 each |
Final |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
11. | TANGIBLE FIXED ASSETS |
Improvements |
Short | to | Plant and |
leasehold | property | Machinery | Totals |
£'000 | £'000 | £'000 | £'000 |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
Reclassification/transfer | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Plant and |
Machinery |
£'000 |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
12. | STOCKS |
2023 | 2022 |
£'000 | £'000 |
Raw materials |
Finished goods |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
13. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£'000 | £'000 |
Trade debtors |
Amounts owed by group undertakings |
Tax |
VAT |
Prepayments and accrued income |
14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£'000 | £'000 |
Hire purchase contracts (see note 16) |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
Accruals and deferred income |
15. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£'000 | £'000 |
Hire purchase contracts (see note 16) |
16. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
2023 | 2022 |
£'000 | £'000 |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable operating | leases |
2023 | 2022 |
£'000 | £'000 |
Within one year |
Between one and five years |
In more than five years |
17. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£'000 | £'000 |
Deferred tax |
Accelerated capital allowances |
SWAN ALLOY UK LTD. (REGISTERED NUMBER: 03221771) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
17. | PROVISIONS FOR LIABILITIES - continued |
Deferred |
tax |
£'000 |
Balance at 1 January 2023 |
Charge to Income Statement during year |
Balance at 31 December 2023 |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £'000 | £'000 |
Ordinary | £1 | 3,696 | 3,696 |
19. | RESERVES |
Retained |
earnings |
£'000 |
At 1 January 2023 |
Deficit for the year | ( |
) |
Dividends | ( |
) |
At 31 December 2023 |
20. | ULTIMATE PARENT COMPANY |
The ultimate parent undertaking and controlling party at the balance sheet date is Aurea SA, a public entity incorporated in France. |