IRIS Accounts Production v24.1.0.578 03685736 Board of Directors 1.1.23 31.12.23 31.12.23 86 85 true false true true false false true true true false Ordinary A £1 1.00000 Ordinary B £1 1.00000 iso4217:GBPiso4217:USDiso4217:EURxbrli:sharesxbrli:pureutr:tonnesutr:kWh036857362022-12-31036857362023-12-31036857362023-01-012023-12-31036857362021-12-31036857362022-01-012022-12-31036857362022-12-3103685736ns15:EnglandWales2023-01-012023-12-3103685736ns14:PoundSterling2023-01-012023-12-3103685736ns10:Director12023-01-012023-12-3103685736ns10:PrivateLimitedCompanyLtd2023-01-012023-12-3103685736ns10:FRS1022023-01-012023-12-3103685736ns10:Audited2023-01-012023-12-3103685736ns10:LargeMedium-sizedCompaniesRegimeForDirectorsReport2023-01-012023-12-3103685736ns10:LargeMedium-sizedCompaniesRegimeForAccounts2023-01-012023-12-3103685736ns10:FullAccounts2023-01-012023-12-3103685736ns10:OrdinaryShareClass12023-01-012023-12-3103685736ns10:OrdinaryShareClass22023-01-012023-12-3103685736ns10:Director22023-01-012023-12-3103685736ns10:Director32023-01-012023-12-3103685736ns10:Director42023-01-012023-12-3103685736ns10:CompanySecretary12023-01-012023-12-3103685736ns10:RegisteredOffice2023-01-012023-12-310368573612023-01-012023-12-310368573612022-01-012022-12-3103685736ns5:CurrentFinancialInstruments2023-12-3103685736ns5:CurrentFinancialInstruments2022-12-3103685736ns5:ShareCapital2023-12-3103685736ns5:ShareCapital2022-12-3103685736ns5:RetainedEarningsAccumulatedLosses2023-12-3103685736ns5:RetainedEarningsAccumulatedLosses2022-12-3103685736ns5:ShareCapital2021-12-3103685736ns5:RetainedEarningsAccumulatedLosses2021-12-3103685736ns5:FurtherSpecificReserve3ComponentTotalEquity2021-12-3103685736ns5:RetainedEarningsAccumulatedLosses2022-01-012022-12-3103685736ns5:FurtherSpecificReserve3ComponentTotalEquity2022-01-012022-12-3103685736ns5:FurtherSpecificReserve3ComponentTotalEquity2022-12-3103685736ns5:RetainedEarningsAccumulatedLosses2023-01-012023-12-3103685736ns5:FurtherSpecificReserve3ComponentTotalEquity2023-01-012023-12-3103685736ns5:FurtherSpecificReserve3ComponentTotalEquity2023-12-3103685736ns15:UnitedKingdom2023-01-012023-12-3103685736ns15:UnitedKingdom2022-01-012022-12-3103685736ns15:Europe2023-01-012023-12-3103685736ns15:Europe2022-01-012022-12-3103685736ns15:Asia2023-01-012023-12-3103685736ns15:Asia2022-01-012022-12-3103685736ns5:TotalGeographicSegmentsIncludingAnyUnallocatedAmount2023-01-012023-12-3103685736ns5:TotalGeographicSegmentsIncludingAnyUnallocatedAmount2022-01-012022-12-3103685736ns5:PlantEquipmentOtherAssetsUnderOperatingLeases2023-01-012023-12-3103685736ns5:PlantEquipmentOtherAssetsUnderOperatingLeases2022-01-012022-12-3103685736ns5:OwnedAssets2023-01-012023-12-3103685736ns5:OwnedAssets2022-01-012022-12-3103685736112023-01-012023-12-3103685736112022-01-012022-12-3103685736ns5:LandBuildings2022-12-3103685736ns5:LeaseholdImprovements2022-12-3103685736ns5:PlantMachinery2022-12-3103685736ns5:FurnitureFittings2022-12-3103685736ns5:LandBuildings2023-01-012023-12-3103685736ns5:LeaseholdImprovements2023-01-012023-12-3103685736ns5:PlantMachinery2023-01-012023-12-3103685736ns5:FurnitureFittings2023-01-012023-12-3103685736ns5:LandBuildings2023-12-3103685736ns5:LeaseholdImprovements2023-12-3103685736ns5:PlantMachinery2023-12-3103685736ns5:FurnitureFittings2023-12-3103685736ns5:LandBuildings2022-12-3103685736ns5:LeaseholdImprovements2022-12-3103685736ns5:PlantMachinery2022-12-3103685736ns5:FurnitureFittings2022-12-3103685736ns5:CurrentFinancialInstrumentsns5:WithinOneYear2023-12-3103685736ns5:CurrentFinancialInstrumentsns5:WithinOneYear2022-12-3103685736ns5:WithinOneYear2023-12-3103685736ns5:WithinOneYear2022-12-3103685736ns5:BetweenOneFiveYears2023-12-3103685736ns5:BetweenOneFiveYears2022-12-3103685736ns5:MoreThanFiveYears2023-12-3103685736ns5:MoreThanFiveYears2022-12-3103685736ns5:AllPeriods2023-12-3103685736ns5:AllPeriods2022-12-3103685736ns5:DeferredTaxation2022-12-3103685736ns5:DeferredTaxation2023-01-012023-12-3103685736ns5:DeferredTaxation2023-12-3103685736ns10:OrdinaryShareClass12023-12-3103685736ns10:OrdinaryShareClass22023-12-3103685736ns5:RetainedEarningsAccumulatedLosses2022-12-31
REGISTERED NUMBER: 03685736 (England and Wales)
















STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

FOR

HEXCEL REINFORCEMENTS UK LIMITED

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)






CONTENTS OF THE FINANCIAL STATEMENTS
for the Year Ended 31 December 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 4

Report of the Independent Auditors 5

Profit and Loss Account 7

Other Comprehensive Income 8

Balance Sheet 9

Statement of Changes in Equity 10

Notes to the Financial Statements 11


HEXCEL REINFORCEMENTS UK LIMITED

COMPANY INFORMATION
for the Year Ended 31 December 2023







DIRECTORS: P J Winterlich
G E Lehman
T P Merlot
N P Howard





SECRETARY: Ms T Potter





REGISTERED OFFICE: Ickleton Road
Duxford
Cambridge
CB22 4QB





REGISTERED NUMBER: 03685736 (England and Wales)





AUDITORS: SFB Group Limited
Chartered Accountants
Statutory Auditor
Unit 8 Oak Spinney Park
Ratby Lane
Leicester Forest East
Leicester
LE3 3AW

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

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 principal activity of the company continued to be the manufacture of multiaxial reinforcements.

While margins remained comparable to 2022, increased interest payments contributed to losses of £3,174k (2022: £2,576k loss). During the period the company has continued to significantly invest in research and development, premises and equipment, personnel, IT and processes in order to bring it in line with other Hexcel operations and to position itself to meet the increasing and exacting demands of its customer base.

Hexcel is investing in expanding its Leicester plant by installing a state-of-the-art machine for carbon non-crimp fabrics development and lab equipment for research into this technology. The company will be working closely with the National Composites Centre to leverage their expertise in material handling and part processing.

This year our operating loss has reduced to £1,803k in 2023 (2022: £2,211k loss). This has been achieved through improvements made in reducing administrative expenses. The directors are confident that this continued investment, together with the opportunities arising out of the acquisition by Hexcel, will enable the company to improve its profitability and enable it to react in innovative ways to new business opportunities as they arise.

The company declared a net loss after tax of £1,895k in the period compared to a loss of £1,415k in 2022.

PRINCIPAL RISKS AND UNCERTAINTIES
Credit and liquidity risk:

Ongoing credit risks are addressed through a formal system of control; there are no unusual risks in this regard. Liquidity risk for the Hexcel Corporation as a whole is managed through the Hexcel Group's centralised financing arrangements.

Instabilities in market supply and demand:

There is a risk of reduced operating performance arising from the cyclical nature of the markets in which the Company operates. A downturn in these markets could occur at any time as a result of events that are industry specific or macroeconomic and in the event of a downturn, we have no way of knowing if, when and to what extent there might be a recovery. Any deterioration in any of the cyclical markets our Company serves could adversely affect the financial performance and operating results.

In addition, customers continue to emphasize the need for cost reduction or other improvements in contract terms throughout the supply chain. In response to these pressures, there may be requirement to accept increased risk or face the prospects of margin compression on some products in the future. Where possible, the Company seeks to offset or mitigate the impact of such pressures through productivity and performance improvements, index clauses, and other actions.

DIVERSITY AND DISABLED EMPLOYEES
The Company does not discriminate against employees on the basis of race, gender, religion or sexual orientation.

It is the Company's policy that disabled people are given the same consideration as other applicants for all job vacancies for which they offer themselves as suitable candidates. Similarly, the Company's policy is to continue to employ and train employees who have become disabled whenever possible.

Every effort has been made to ensure that line managers fully understand that disabled people must have the same prospects and promotional opportunities that are available to other employees. The Company makes appropriate modifications to procedures, equipment and job content where it is practicable and safe to do so.


HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

STRATEGIC REPORT
for the Year Ended 31 December 2023

UK TAX POLICY
The UK tax policy of all entities registered in England and Wales and wholly owned by Hexcel Corporation is available at the following website:

http://www.hexcel.com/user_area/uploads/HexcelUKTaxStrategy.pdf

All information included within the tax policy document is unaudited.

ON BEHALF OF THE BOARD:





N P Howard - Director


25 September 2024

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

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 continued to be the manufacture of multiaxial reinforcements.

DIVIDENDS
The total distribution of dividends for the year ended 31 December 2023 were £Nil (2022: £Nil).

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

P J Winterlich
G E Lehman
T P Merlot

Other changes in directors holding office are as follows:

N P Howard - appointed 1 May 2023

STATEMENT OF DIRECTORS' RESPONSIBILITIES
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.

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 or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
SFB Group Limited were reappointed auditors to the company and in accordance with Section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at the Annual General Meeting.

ON BEHALF OF THE BOARD:





N P Howard - Director


25 September 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HEXCEL REINFORCEMENTS UK LIMITED

Opinion
We have audited the financial statements of Hexcel Reinforcements UK Limited (the 'company') for the year ended 31 December 2023 which comprise the Profit and Loss Account, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 December 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 and the Report of the Directors, 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
HEXCEL REINFORCEMENTS UK LIMITED


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

- The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws;
- Enquiry of management around actual and potential litigation and claims;
- Enquiry of management to identify any instances of non-compliance with laws and regulations;
- We reviewed correspondence with legal and regulatory bodies where applicable;
- We agreed the financial statements disclosures to underlying supporting documentation
- We reviewed the detail of certain nominal accounts for indications of management override;
- We gained an understanding of the design and implementation of the processes and controls in place within the group which are designed to prevent, detect or correct fraud or error within the financial statements
- We challenged the accounting treatment applied in respect of revenue recognised during the year, in particular in relation to manual adjustments made to revenue, cut off between accounting periods;
- We identified and tested journal entries which we considered to be unusual and me be indicative of bias on the part of management or those charged with governance, investigating the rationale behind significant or unusual transactions.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation

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.

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.




Paul Carvell BFP FCA (Senior Statutory Auditor)
for and on behalf of SFB Group Limited
Chartered Accountants
Statutory Auditor
Unit 8 Oak Spinney Park
Ratby Lane
Leicester Forest East
Leicester
LE3 3AW

25 September 2024

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

PROFIT AND LOSS ACCOUNT
for the Year Ended 31 December 2023

2023 2022
Notes £'000 £'000

TURNOVER 4 19,384 19,117

Cost of sales 19,141 18,860
GROSS PROFIT 243 257

Administrative expenses 2,046 2,468
OPERATING LOSS 6 (1,803 ) (2,211 )


Interest payable and similar expenses 7 1,371 365
LOSS BEFORE TAXATION (3,174 ) (2,576 )

Tax on loss 8 (1,279 ) (1,161 )
LOSS FOR THE FINANCIAL YEAR (1,895 ) (1,415 )

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

OTHER COMPREHENSIVE INCOME
for the Year Ended 31 December 2023

2023 2022
Notes £'000 £'000

LOSS FOR THE YEAR (1,895 ) (1,415 )


OTHER COMPREHENSIVE INCOME
Fair value reserve - (165 )
Income tax relating to other comprehensive
income

-

-
OTHER COMPREHENSIVE INCOME FOR THE YEAR,
NET OF INCOME TAX

-

(165

)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (1,895 ) (1,580 )

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

BALANCE SHEET
31 December 2023

2023 2022
Notes £'000 £'000 £'000 £'000
FIXED ASSETS
Tangible assets 9 5,650 6,495

CURRENT ASSETS
Stocks 10 5,498 5,082
Debtors 11 3,877 3,170
9,375 8,252
CREDITORS
Amounts falling due within one year 12 29,404 27,231
NET CURRENT LIABILITIES (20,029 ) (18,979 )
TOTAL ASSETS LESS CURRENT LIABILITIES (14,379 ) (12,484 )

CAPITAL AND RESERVES
Called up share capital 15 882 882
Retained earnings 16 (15,261 ) (13,366 )
SHAREHOLDERS' FUNDS (14,379 ) (12,484 )

The financial statements were approved by the Board of Directors and authorised for issue on 25 September 2024 and were signed on its behalf by:





N P Howard - Director


HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

STATEMENT OF CHANGES IN EQUITY
for the Year Ended 31 December 2023

Called up Fair
share Retained value Total
capital earnings reserve equity
£'000 £'000 £'000 £'000
Balance at 1 January 2022 882 (11,951 ) 165 (10,904 )

Changes in equity
Total comprehensive income - (1,415 ) (165 ) (1,580 )
Balance at 31 December 2022 882 (13,366 ) - (12,484 )

Changes in equity
Total comprehensive income - (1,895 ) - (1,895 )
Balance at 31 December 2023 882 (15,261 ) - (14,379 )

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

NOTES TO THE FINANCIAL STATEMENTS
for the Year Ended 31 December 2023

1. STATUTORY INFORMATION

Hexcel Reinforcements UK Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard Applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value.

The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).

3. ACCOUNTING POLICIES

Basis of preparation
These financial statements are prepared on a going concern basis, under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities measured at fair value through profit or loss.

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed within the notes to the financial statements.

The financial statements are presented in Sterling (£).

Going concern
The directors have reviewed the financial projections and working capital requirements of the company for 12 months from the date these financial statements are approved and are satisfied that the company can meet its liabilities as they fall due with the continued support from its group undertakings. Therefore it is considered appropriate to prepare the company's financial statements on a going concern basis.

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirements of Section 7 Statement of Cash Flows;
the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirement of paragraph 33.7.

Where relevant the above information is included in the consolidated financial statements of Hexcel Corporation as at 31 December 2023 and these financial statements may be obtained from the Securities and Exchange Commission, Washington D.C. 20549, USA or from the following Internet address: http://www.sec.gov/edgar.shtml.

Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the company and value added taxes.

The company recognises revenue when (a) the significant risks and rewards of ownership have been transferred to the buyer; (b) the company retains no continuing involvement or control over the goods; (c) the amount of revenue can be measured reliably; (d) it is probable that future economic benefits will flow to the entity and (e) when specific criteria relating to each of the company's sales channels have been met.

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the Year Ended 31 December 2023

3. ACCOUNTING POLICIES - continued

Tangible fixed assets
Tangible assets are stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use, dismantling and restoration costs and borrowing costs capitalised.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful life or if held under a finance lease, over the lease term, whichever is the shorter.


Freehold Property
- 33% on cost, 25% on cost 10% on cost, 2% on
cost

Plant and machinery
- 10% on cost, 14% on cost, 20% on cost, 25% on
cost, 33% on cost and 50% on cost

Fixtures and fittings
- 50% on cost, 25% on cost, 20% on cost and 10%
on cost.

The assets' residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised on the profit and loss.

Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Stocks are recognised as an expense in the period in which the related revenue is recognised.

Cost is determined on the first in, first-out (FIFO) method.

At the end of each reporting period stocks are assessed for impairment. If an item of stock is impaired, the identified stock is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is recognised the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit on the profit and loss.

Taxation
Taxation expense for the period comprises current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case tax is also recognised in other comprehensive income or directly in equity respectively.

Current or deferred taxation assets and liabilities are not discounted.

(i) Current tax

Current tax is the amount of income tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

(ii) Deferred tax

Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These 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 recognised on all timing differences at the reporting date except for certain exceptions. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the Year Ended 31 December 2023

3. ACCOUNTING POLICIES - continued

Research and development
Expenditure on research is written off in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

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.

Financial instruments
The company has chosen to adopt the Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances and investments in commercial paper, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

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

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables and bank loans are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Assets under construction
Assets under construction are not depreciated until available for use so that the useful life of the asset can be estimated and the appropriate depreciation applied.

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the Year Ended 31 December 2023

3. ACCOUNTING POLICIES - continued

Critical accounting judgements and key sources of estimation uncertainty
The company makes estimates and assumptions concerning the future. Management are also required to exercise judgement in the process of applying the company accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that are believed to be reasonable under the circumstances.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:

Depreciation and residual values
The director has reviewed the asset lives and associated residual values of all fixed asset classes, and in particular, the useful economic lives and residual values of fixture & fittings and plant & machinery, and have concluded that asset lives and residual values are appropriate.

The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and project disposal values.

Finished Goods
Stock includes attributable labour and overheads and are based on management's estimate of the absorption of fixed and variable costs in the manufacturing process excluding selling and marketing costs.

Recoverability of trade debtors
Management makes allowance for doubtful debts based on an assessment of the recoverability of debtors. Allowances are applied to debtors where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyse historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the provision for doubtful debts. Where the expectation is different from the original estimate, such difference will impact the carrying value of debtors and the charge in the profit and loss account.

4. TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2023 2022
£'000 £'000
United Kingdom 5,150 4,570
Europe 7,547 8,216
Asia 16 440
America 352 911
Rest of the world 6,319 4,980
19,384 19,117

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the Year Ended 31 December 2023

5. EMPLOYEES AND DIRECTORS

20232022
£'000£'000
Wages and salaries2,8142,704
Social security costs29490
Other pension costs11644
3,2242,838


The average number of employees during the year was as follows:
20232022

Board of directors43
Manufacturing, warehouse and engineering7877
Sales and administrative45
8685

2023 2022
£ £
Directors' remuneration - -

6. OPERATING LOSS

The operating loss is stated after charging/(crediting):

2023 2022
£'000 £'000
Equipment rental & leases 382 327
Depreciation - owned assets 1,040 1,194
Auditor's remuneration 18 17
Foreign exchange differences (66 ) (3 )
Research and development including RDEC (119 ) 137

7. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£'000 £'000
Debtor financing interest 1,371 365

8. TAXATION

Analysis of the tax credit
The tax credit on the loss for the year was as follows:
2023 2022
£'000 £'000
Current tax:
UK corporation tax (620 ) (598 )

Deferred tax (659 ) (563 )
Tax on loss (1,279 ) (1,161 )

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the Year Ended 31 December 2023

8. TAXATION - continued

Reconciliation of total tax credit included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£'000 £'000
Loss before tax (3,174 ) (2,576 )
Loss multiplied by the standard rate of corporation tax in the UK of 25% (2022 -
19%)

(794

)

(489

)

Effects of:
Depreciation in excess of capital allowances 150 117
Fair value adjustment - (31 )
Deferred Tax (165 ) (107 )
Other reliefs (470 ) (651 )
Total tax credit (1,279 ) (1,161 )

Tax effects relating to effects of other comprehensive income

There were no tax effects for the year ended 31 December 2023.

2022
Gross Tax Net
£'000 £'000 £'000
Fair value reserve (165 ) - (165 )

9. TANGIBLE FIXED ASSETS
Assets Fixtures
Freehold under Plant and and
property construction machinery fittings Totals
£'000 £'000 £'000 £'000 £'000
COST
At 1 January 2023 2,156 438 16,598 64 19,256
Additions - 195 - - 195
Reclassification/transfer 29 (135 ) 106 - -
At 31 December 2023 2,185 498 16,704 64 19,451
DEPRECIATION
At 1 January 2023 663 - 12,044 54 12,761
Charge for year 48 - 983 9 1,040
At 31 December 2023 711 - 13,027 63 13,801
NET BOOK VALUE
At 31 December 2023 1,474 498 3,677 1 5,650
At 31 December 2022 1,493 438 4,554 10 6,495

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the Year Ended 31 December 2023

10. STOCKS
2023 2022
£'000 £'000
Raw materials 3,415 3,722
Work-in-progress 638 446
Finished goods 1,445 914
5,498 5,082

The directors' consider there to be no material differences between value shown in the balance sheet and replacement cost.

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£'000 £'000
Other debtors 2,449 2,687
Tax 259 -
Deferred tax asset 1,013 294
Prepayments and accrued income 156 189
3,877 3,170

Included within other debtors are amounts due from group undertakings 2023 £2,326,717 (2022 £2,693,825).

12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£'000 £'000
Trade creditors 2,143 2,446
Amounts owed to group undertakings 26,757 23,874
Social security and other taxes 72 69
VAT 46 499
Other creditors 6 4
Accruals and deferred income 380 339
29,404 27,231

13. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
£'000 £'000
Within one year 131 414
Between one and five years 21 1,347
In more than five years - 78
152 1,839

14. DEFERRED TAX
£'000
Balance at 1 January 2023 (294 )
Utilised during year (719 )
Balance at 31 December 2023 (1,013 )

HEXCEL REINFORCEMENTS UK LIMITED (REGISTERED NUMBER: 03685736)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the Year Ended 31 December 2023

15. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £'000 £'000
441,000 Ordinary A £1 £1 441 441
441,000 Ordinary B £1 £1 441 441
882 882

16. RESERVES
Retained
earnings
£'000

At 1 January 2023 (13,366 )
Deficit for the year (1,895 )
At 31 December 2023 (15,261 )

The Retained Earnings Reserve represents cumulative profits or losses, net of dividends paid and other adjustments.

17. ULTIMATE PARENT COMPANY

The Company's immediate parent undertaking is Hexcel Composites Limited, a company registered in England and Wales. The group financial statements of Hexcel Composites Limited represent the smallest group including the financial statements of Hexcel Reinforcements UK Limited and are available from Companies House, Crown Way, Maindy, Cardiff, CF4 3UZ.

The Company's ultimate parent undertaking and ultimate controlling party and the largest group to consolidate these financial statements, is Hexcel Corporation, a company incorporated in the state of Delaware, United States of America. Copies of the group financial statements of Hexcel Corporation are available from the Securities and Exchange Commission, Washington D.C. 20549, USA or from the following Internet address: http://www.sec.gov/edgar.shtml

18. RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.