Company registration number 02210300 (England and Wales)
SONAE ARAUCO (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SONAE ARAUCO (UK) LIMITED
COMPANY INFORMATION
Directors
Joao Lemos de Meneses Gentil Berger
Rui Manuel Goncalves Correia
Secretary
Brian Hayes
Company number
02210300
Registered office
Unit 6 Connect Business Village
24 Derby Road
Liverpool
L5 9PR
Merseyside
England
L5 9PR
Auditor
Sedulo Audit Limited
Statutory Auditor
5th Floor
Walker House
Liverpool
Merseyside
United Kingdom
L2 3YL
Bankers
Barclays Bank PLC
1 Churchill Place
London
E14 SHP
National Westminster Bank PLC
5 Ormskirk Street
St Helens
Merseyside
WA10 1DR
Solicitors
Squire Patton Boggs (UK) LLP
No. 1 Spinningfields
1 Hardman Square
Manchester
M3 3EB
SONAE ARAUCO (UK) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Balance sheet
9
Notes to the financial statements
11 - 19
SONAE ARAUCO (UK) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Review of the business

Sonae Arauco businesses, and wood-based panel industry in general, were confronted with a market slow down since the second half of 2022, following the market recovery of post pandemic period. The lower customer demand, especially in construction sector, and the general price decreases, contributed to a lower financial performance when compared to 2022, notwithstanding the decrease in raw materials prices and the normalisation of energy prices throughout 2023. The UK construction sector increased slightly at the end of 2023, helped by the prospect of interest rate cuts, allowing activity levels and profitability to be maintained.

 

Sonae Arauco UK has delivered in 2023 a positive financial performance, although at lower levels than the previous year, as determined by a slowdown in the economic activity. The macroeconomic environment was marked by the effects of rising geopolitical instability, higher interest rates and persistent inflation, though the latter has begun to ease, when compared to 2022. These factors, as expected, begun to clearly affect consumer sentiment and consumer spend. The military invasion of Ukraine unfortunately still continues and there are yet no signs of a short term solution to the conflict. The visible economic impacts of the war, as evidenced by the extreme volatility of energy prices, lower growth and by the direct and indirect impacts over several key commodities, have forced general inflation to levels not experienced for decades in Europe.

 

Principal risks and uncertainties

As a result of the business and operations carried out, the Group is exposed to several financial risks, namely credit risk, market risks (interest risk, price risk and liquidity risk) and legal risks. The Group’s global risk management policy, which is handled on a centralized basis, attempts to minimize the potential adverse effects on the Group’s financial performance arising from the relevant risk.

Key performance indicators

Turnover for the year was £26.1M (2022 - £27.4M) representing a 5% decrease on the prior year.

 

Profit for the financial year was £70.6K (2022 - £92.1K).

 

Net assets increased from £1.6M to £1.7M.

 

By order of the board

Brian Hayes
Secretary
16 October 2024
SONAE ARAUCO (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

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

Principal activities

The principal activity of the company is the import and sale of chipboard and related wood-based products ("Product").

Going Concern
Having considered the company's financial position and future trading forecasts, the directors have a reasonable expectation the company has adequate resources to continue in operational existence for the foreseeable future, which is at least 12 months from the date of approval of these financial statements. In making their assessment, the directors have considered the letter of support provided by the company's immediate parent company. On the basis of these expectations the directors consider it appropriate to continue to prepare the financial statements on a going concern basis.
Results and dividends

The profit for the financial year is £70,551 (2022: £92,099). The directors do not recommend the payment of a dividend (2022: £nil).

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

Joao Lemos de Meneses Gentil Berger
Rui Manuel Goncalves Correia
Qualifying third party and pension scheme indemnity provisions

At the time this report is approved, no qualifying third party indemnity provisions or qualifying pension scheme indemnity provisions are in place for the benefit of one or more of the directors. At no time during the year were any such provisions in force for the benefit of one or more persons who were then directors.

Political donations

No donations were made to any political party during the year (2022: £nil).

Financial risk management
Price risk

The company is exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.

Interest rate cash flow risk

The company has a policy of maintaining debt at fixed rates to ensure the certainty of the future interest cash flows. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature.

SONAE ARAUCO (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Foreign exchange risk

While the greater part of the company's revenues and expenses are denominated in Sterling, the company is exposed to some foreign exchange risk in the normal course of business, principally on the purchase and sale of certain goods invoiced in Euros. While the company has not used financial instruments to hedge foreign exchange exposure, this position is kept constantly under review.

Credit risk

The company has implemented policies which require appropriate credit checks on potential customers before sales are made. The amount of exposure to individual customers is subject to a limit which is reassessed regularly by the Board.

Liquidity risk

The company actively maintains a mixture of short-term debt finance that is designed to ensure the company has sufficient available funds for operations and planned expansions.

Post reporting date events

There have been no significant events affecting the Company since the year end.

Future developments

The high level of uncertainty that defined last year, marked by inflation and rising global interest rates, is likely to persist throughout 2024. Economic growth in all the regions where Sonae Arauco operates is estimated to remain at subdued levels, with consumer confidence being affected by higher mortgage costs and prevailing inflation. The corresponding impacts on households’ real disposable income should continue to weigh on consumer spending and consensus expectations are, therefore, that private consumption will continue at low levels.

This challenging macroeconomic environment should naturally also affect our level of activity and profitability, as already experienced in the later part of 2023. We expect the evolution of the business in the next quarters to continue being conditioned by a very high level of uncertainty. Although the worst scenarios in terms of availability and costs of energy and raw materials did not materialize during 2023, the risks are still there.

 

Despite these uncertainties, will continue focusing on the initiatives included in our strategic roadmap, namely on our journey towards carbon neutrality, on growing our decorative and construction businesses, on promoting a culture of innovation, on enlarging long-term partnerships with preferred customers and suppliers and on improving our value propositions to the selected market segments.

 

SONAE ARAUCO (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Statement of directors' responsibilities

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

 

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

 

 

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

Statement of disclosure to auditor

In accordance with section 418 of the Companies Act 2006, each of the persons who is a director at the date of approval of this report confirms that:

 

 

This confirmation is given and should be interpreted in accordance with the provision of Section 418 of the Companies Act 2006.

Independent Auditor

Sedulo Audit Limited was appointed as auditor during the year and have expressed their willingness to continue in office as auditor and is deemed to have been reappointed in accordance with Section 487 of the Companies Act 2006.

Approved by the Board and signed on their behalf by
Brian Hayes
Secretary
15 October 2024
SONAE ARAUCO (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SONAE ARAUCO (UK) LIMITED
- 5 -
Opinion

We have audited the financial statements of Sonae Arauco (UK) Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

SONAE ARAUCO (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SONAE ARAUCO (UK) LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

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

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities is on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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

The auditor’s explanation of its audit response will depend on the risks identified but may include:

- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.

- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

- Reviewing minutes of meetings of those charged with governance.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

SONAE ARAUCO (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SONAE ARAUCO (UK) LIMITED (CONTINUED)
- 7 -
Katelyn Dutton
Senior Statutory Auditor
For and on behalf of Sedulo Audit Limited
16 October 2024
Chartered Accountants
Statutory Auditor
Statutory Auditor
5th Floor
Walker House
Liverpool
Merseyside
United Kingdom
L2 3YL
SONAE ARAUCO (UK) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
2
26,133,199
27,379,552
Cost of sales
(23,583,103)
(25,522,483)
Gross profit
2,550,096
1,857,069
Distribution costs
(601,355)
(656,599)
Administrative expenses
(1,671,895)
(998,414)
Other operating income
186,090
117,969
Operating profit
3
462,936
320,025
Interest payable and similar expenses
4
(392,385)
(227,926)
Profit before taxation
70,551
92,099
Tax on profit
6
-
0
-
0
Profit for the financial year
70,551
92,099

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 11 to 19 form part of these financial statements.

SONAE ARAUCO (UK) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
236
493
Current assets
Stocks
10
5,930,038
5,573,194
Debtors
9
6,526,421
7,661,130
Cash at bank and in hand
1,002,704
1,849,422
13,459,163
15,083,746
Creditors: amounts falling due within one year
12
(6,632,930)
(4,282,936)
Net current assets
6,826,233
10,800,810
Total assets less current liabilities
6,826,469
10,801,303
Creditors: amounts falling due after more than one year
11
(5,157,212)
(9,202,597)
Net assets
1,669,257
1,598,706
Capital and reserves
Called up share capital
14
109,403,682
109,403,682
Profit and loss reserves
15
(107,734,425)
(107,804,976)
Total equity
1,669,257
1,598,706

The notes on pages 11 to 19 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 15 October 2024 and are signed on its behalf by:
Rui Manuel Goncalves Correia
Director
Company registration number 02210300 (England and Wales)
SONAE ARAUCO (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
109,403,682
(107,897,075)
1,506,607
Year ended 31 December 2022:
Profit and total comprehensive income
-
92,099
92,099
Balance at 31 December 2022
109,403,682
(107,804,976)
1,598,706
Year ended 31 December 2023:
Profit and total comprehensive income
-
70,551
70,551
Balance at 31 December 2023
109,403,682
(107,734,425)
1,669,257
SONAE ARAUCO (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

Sonae Arauco (UK) Limited is a private company limited by shares incorporated in England and Wales (company registration number 02210300). The registered office is Unit 6 Connect Business Village, 24 Derby Road, Liverpool, Merseyside, England, L5 9PR.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

 

These financial statements are prepared on a going concern basis, under the historical cost convention.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The company is a wholly owned subsidiary of Sonae Arauco, SA. It is included in the consolidated financial statements of Sonae Arauco, SA, which are publicly available. Consequently, the company is a qualifying entity as per FRS 102 and has taken advantage of the disclosure exemption of FRS 102, Section 1, paragraph 1, 12(b) statement of cash flows, section 11 and 12 recognition, derecognition, measurement and disclosure of financial instruments, In addition, the company has taken advantage of the exemption, under FRS 102 from disclosing transactions with other members of the group headed by Sonae Arauco, SA.

1.2
Going concern

Having considered the company's financial position and future trading forecasts, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, being a minimum of 12 months from the date of approval of these financial statements. In making their assessment, the directors have considered forecasts for the foreseeable future and the letter of support provided by the company's ultimate parent company. In light of the trading forecasts, the directors are comfortable that the immediate parent company has the ability to provide any financial support to the company as and when required for a period of at least 12 months from the date these financial statements are authorised for issue. As is the case for any entity placing reliance on other related entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so. true

 

On the basis of these expectations the directors consider it appropriate to continue to prepare the financial statements on a going concern basis.

1.3
Turnover

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

 

The company recognises revenue when the significant risks and rewards of ownership have been transferred to the buyer, the company retains no continuing involvement or control over the goods, the amount of revenue can be measured reliably and it is probable that future economic benefits will flow to the entity.

 

The company earns commission in relation to the sale of goods. Commission income is recognised on an accruals basis in accordance with the substance of the relevant agreement.

SONAE ARAUCO (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -

Other income

 

Recharges of expenses to other members of the group headed by Sonae Arauco SA , insurance claims and government grants received, and receivable are categorised as other income.

1.4
Tangible fixed assets

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

Depreciation is calculated, using the straight-line method, to allocate the cost of the assets to their residual values over their estimated useful lives as follows:

Office equipment
4 - 10 years

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 profit or loss.

1.5
Stocks

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

Cost is determined on the moving average weighed cost method. Cost includes the purchase price, including taxes and duties and transport and handling directly attributable to bringing the inventory to its present location and condition.

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

1.6
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits help at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities,

1.7
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

1.8
Taxation
Current tax

Current tax is the amount on income tax payable in respect of 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.

 

SONAE ARAUCO (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Deferred tax

Deferred tax arises from timing differences that are difference 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.

1.9
Employee benefits

The company provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined contribution pension plans,

 

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

The company operates an annual bonus plan for employees. An expense is recognised in the profit and loss account when the company has a legal or constructive obligation to make payments under the plan as a result of past events and a reliable estimate of the obligation can be made.

1.10
Leases

At inception the company assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains a lease based on the substance of the arrangement.

 

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases. The company does not have any finance leases.

 

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease. Incentives received to enter into an operating lease are credited to the profit and loss account, to reduce the lease expense on a straight-line basis over the period of the lease.

1.11
Government grants

Grants relating to revenue are recognised in income systemically over the periods in which the company recognises the related costs for which the grant is intended to compensate.

SONAE ARAUCO (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.12
Foreign exchange

The company's functional and presentation currency is pound sterling because that is the primary economic environment in which the company operates.

 

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

 

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of transaction.

 

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.

1.13

Share capital

Ordinary shares are classified as equity.

1.14

Critical accounting judgements and estimation uncertainty.

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.

 

2
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
23,442,753
25,445,645
Commission
2,690,446
1,933,907
26,133,199
27,379,552
Other revenue
Group recharges
130,122
117,646
Insurance claims
55,968
323

All sales arose in the UK (2022: same).

SONAE ARAUCO (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Net foreign exchange losses/(gains)
106,766
(308,883)
Fees payable to the company's auditor for the non-audit services
1,650
1,650
Fees payable to the company's auditor for the audit of the company's financial statements
9,100
9,100
Depreciation of owned tangible fixed assets
257
258
Operating lease charges
11,044
10,775
4
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
392,385
227,926
5
Employees

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

2023
2022
Number
Number
Selling and distribution
4
3
Administration
1
2
Total
5
5

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
308,842
359,529
Social security costs
37,467
36,566
Pension costs
12,438
12,280
358,747
408,375
6
Taxation

As at 1st April 2023 the government enacted a change in the national income tax rate from 19% to 25%. As this was partway through the current financial year a blended rate of 23.52% has been calculated and used.

SONAE ARAUCO (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Taxation
(Continued)
- 16 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
70,551
92,099
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
16,594
17,499
Tax effect of expenses that are not deductible in determining taxable profit
6,351
923
Fixed asset timing differences
(22,945)
(18,422)
Taxation charge for the year
-
-
7
Pension Arrangements

The company operates a defines contribution pension scheme on behalf of those directors and employees who have applied for membership, The assets of the scheme are help separately from those of the company in an independently administered fund. The pension charge for the year was £12,599 (2022: £12,438).

8
Tangible fixed assets
Office equipment
£
Cost
At 1 January 2023 and 31 December 2023
27,470
Depreciation and impairment
At 1 January 2023
26,977
Depreciation charged in the year
257
At 31 December 2023
27,234
Carrying amount
At 31 December 2023
236
At 31 December 2022
493
SONAE ARAUCO (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
9
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,677,786
7,096,872
Amounts owed by group undertakings
809,840
266,674
Other debtors
-
0
197,070
Prepayments and accrued income
38,795
100,514
6,526,421
7,661,130

Amounts owed by group undertakings are trading balances that are repayable on demand and interest free

10
Stocks
2023
2022
£
£
Finished goods and goods for resale
5,930,038
5,573,194
The amount of stock recognised as an expense during the year was £23,583,102 (2022: £25,522,483).
11
Creditors: amounts falling due after more than one year
2023
2022
£
£
Amounts owed to parent and fellow group undertakings
5,157,212
9,202,597

The amounts owed to parent and fellow group undertakings are unsecured, subject to interest at 2.94% pa (2022: 2.94%) on a 5 year revolving loan agreement incepted on 27 September 2022.

 

12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
187,135
196,902
Taxation and social security
582,100
815,633
Amounts owed to parent and fellow group undertakings
4,511,771
2,037,670
Accruals and deferred income
1,351,924
1,232,731
6,632,930
4,282,936
SONAE ARAUCO (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
13
Deferred taxation

Potential deferred tax assets comprise:

Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances, tax losses and short term timing differences
27,620,128
27,644,517
The deferred tax has not been recognised as an asset in the financial statements due to the uncertainty of future profits against which the tax losses could be offset. The rate of UK corporation Tax applied at the closing rate of 25% (2022: 19%).
14
Share capital
2023
2022
Ordinary share capital
£
£
Issued and fully paid
109,403,682 Ordinary shares of £1 each
109,403,682
109,403,682
15
Profit and loss reserves
2023
2022
£
£
At 1 January 2023
(107,804,976)
(107,897,075)
Profit for the financial year
70,551
92,099
At 31 December 2023
(107,734,425)
(107,804,976)
16
Financial commitments, guarantees and contingent liabilities

The Company is party to a Group cash pooling arrangement held by the parent company.

 

17
Operating lease commitments

The company's future minimum operating lease payments are as follows:

2023
2022
£
£
Within one year
9,582
11,044
Between two and five years
17,725
-
0
27,307
11,044
SONAE ARAUCO (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
18
Related Party Transactions

As a wholly owned subsidiary of Sonae Arauco SA, whose financial statements are publically available, the company has taken advantage of the exemption under FRS 102 from disclosing transactions with other members of the group headed by Sonae Arauco, SA.

19
Ultimate controlling party

The directors regard Efanor Investimentos, SGPS, SA, a company in incorporated in Portugal, and AntarChile, SA, a company incorporated in Chile, as the ultimate parent companies and the ultimate controlling parties.

 

The immediate parent company, Sonae Arauco, S.A, a company incorporated in Spain, is the parent undertaking of the largest and smallest group of undertakings to consolidated these financial statements at 31 December 2023. The consolidated financial statements of Sonae Arauco, SA are available from Ulises 18, 28043 Madrid, Spain.

20
Company information

Sonae Arauco (UK) Limited ["the company] is a private limited company which imports and sells chipboard and related wood based products ["Product"] manufactured by Sonae Arauco, SA Group [the "Group"]. The company operates from office premises in Liverpool, United Kingdom.

 

The company is a private company limited by shares, Incorporated in the United Kingdom under he Companies Act 2006 and registered in England and Wales. The address of the registered office is Unit 6 Connect Business Village, 24 Derby Road, Liverpool L5 9PR.

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