Empire Resources (UK) Limited |
Strategic Report |
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Empire Resources (UK) Ltd, 'the Company' is a wholly owned subsidiary of Empire Resources Inc., a company incorporated in the United States. The Company is engaged principally in the purchase, sale and distribution of value added semi-finished aluminium rolled products to customers located in the United Kingdom and the Republic of Ireland. The Company purchases from several suppliers located throughout the world. Since its incorporation in February 2015, the Company has increased its sales by focusing on providing customers with a high level of service and cost-effective quality products. |
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Perfomance and Position |
Despite the domestic market suffering in the mid to latter part of the year, 2024 was still another extremely healthy year for the team in the UK. Revenue dropped generally owing to the softening of world commodities. Tonnage sales were 6.36% down compared to last year (record breaking 2023), thus proving our strong and important position in the UK market. The range of products is ever evolving still, and is guided by our customers ever changing demands. Plate and Bar sales still offer us the best margins and remain an integral part of our stock portfolio. |
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Risks and Uncertainties |
Empire Resources (UK) has a risk aversion policy and takes actions to mitigate principle risks where possible, through maintaining stock levels, proactive debtor control and hedging procedures for both metal and currency. The company works in partnership with selected supply partners (mills) to ensure consistency of material into specific market sectors. Where feasible, external factors such as recession, global slowdown and tariffs are managed through our ability to adapt quickly to our specific customer requirements through our global supply chains. |
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2025 Trading |
We anticipate 2025 to be a tougher year for the UK team than those more recently seen. The domestic market is still suffering amidst a new Government, weakening currency and downturn in local business. Whilst this also presents opportunities for us to hold stocks where others won’t, what was once a unique business model is now no longer as previous employees have set up trading with a view to attacking our customers, so a loss of revenue and reduced margins are to be expected. However, our relationships with suppliers remain relatively solid, limiting the potential impact from competitors. The removal of Chinese rebate to exports markets (13%) – will also create some short/mid-term uncertainty and will push many customers toward Europe for supply of 1050/5251/5754 product as they seek cheaper rates. |
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This report was approved by the board on 21 February 2025 and signed on its behalf. |
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J Hsieh |
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Director |
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have been prepared in accordance with the requirements of the Companies Act 2006. |
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Basis of 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. |
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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. |
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Other information |
The directors are responsible for the other information. The other information comprises the information in 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. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
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the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Report of the Directors has been prepared in accordance with applicable legal requirements. |
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Matters on which we are required to report by exception |
Irregularities, including fraud are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. |
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We reviewed the company's control and risk management procedures and planned our work based on our assessment of those controls and procedures. This review included an assessment of the risk of material misstatement due to the errors, fraud and management override of controls for all material areas in the financial statements. We made enquiries of management and the company's lawyers regarding any actual or potential litigation and/or claims. Financial statement disclosures were reviewed and checked for compliance with applicable laws. Detailed testing was conducted on balances and transactions including unusual items and those of individual significance to the financial statements. Data analytics were used in order to identify unusual or significant trends. Communications with management and those charged with governance regarding relevant matters was undertaken throughout the audit and on completion. |
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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. |
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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. |
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David W Farnsworth (Senior Statutory Auditor) |
for and on behalf of Feltons, Statutory Auditor |
8 Sovereign Court |
8 Graham Street |
Birmingham |
B1 3JR |
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22 February 2025 |
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Empire Resources (UK) Limited |
Notes to the Accounts |
for the year ended 31 December 2024 |
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1 |
Summary of significant accounting policies |
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Basis of preparation |
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The financial statements have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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2 |
Analysis of turnover |
2024 |
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2023 |
£ |
£ |
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Sale of goods |
14,335,343 |
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18,116,016 |
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By geographical market: |
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UK |
14,335,343 |
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18,095,706 |
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Europe |
- |
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20,310 |
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14,335,343 |
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18,116,016 |
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3 |
Operating profit |
2024 |
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2023 |
£ |
£ |
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This is stated after charging: |
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Auditors' remuneration for audit services |
8,200 |
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8,250 |
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Foreign Exchange Differences |
11,271 |
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(177,330) |
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London Metal Exchange |
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(43,698) |
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(300,185) |
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Carrying amount of stock sold |
11,611,386 |
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15,094,222 |
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4 |
Staff costs |
2024 |
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2023 |
£ |
£ |
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Wages and salaries |
- |
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- |
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Social security costs |
- |
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- |
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Other pension costs |
- |
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- |
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- |
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- |
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Average number of employees during the year |
Number |
Number |
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- |
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- |
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5 |
Interest payable |
2024 |
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2023 |
£ |
£ |
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Other loans |
106,946 |
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251,242 |
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6 |
Taxation |
2024 |
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2023 |
£ |
£ |
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Analysis of charge in period |
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Current tax: |
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UK corporation tax on profits of the period |
128,809 |
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356,985 |
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Tax on profit on ordinary activities |
128,809 |
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356,985 |
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Factors affecting tax charge for period |
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The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
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2024 |
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2023 |
£ |
£ |
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Profit on ordinary activities before tax |
514,922 |
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1,519,083 |
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Standard rate of corporation tax in the UK |
25.0% |
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24% |
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£ |
£ |
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Profit on ordinary activities multiplied by the standard rate of corporation tax |
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128,731 |
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364,580 |
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Effects of: |
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Expenses not deductible for tax purposes |
78 |
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(7,595) |
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Current tax charge for period |
128,809 |
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356,985 |
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7 |
Stocks |
2024 |
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2023 |
£ |
£ |
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Work in progress |
399 |
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399 |
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Finished goods and goods for resale |
2,951,071 |
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4,214,710 |
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2,951,470 |
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4,215,109 |
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8 |
Debtors |
2024 |
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2023 |
£ |
£ |
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Trade debtors |
4,144,968 |
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3,733,278 |
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Other debtors |
341,988 |
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401,001 |
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Prepayments and accrued income |
1,169,688 |
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1,248,228 |
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5,656,644 |
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5,382,507 |
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9 |
Creditors: amounts falling due within one year |
2024 |
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2023 |
£ |
£ |
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Trade creditors |
38,722 |
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59,856 |
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Corporation tax |
55,744 |
|
143,738 |
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Other taxes and social security costs |
624,565 |
|
583,674 |
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Other creditors |
(32,891) |
|
105,176 |
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Accruals and deferred income |
177,945 |
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186,508 |
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|
864,085 |
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1,078,952 |
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10 |
Creditors: amounts falling due after one year |
2024 |
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2023 |
£ |
£ |
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Amounts owed to group undertakings and undertakings in which the company has a participating interest |
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- |
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3,745,890 |
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11 |
Share capital |
Nominal |
|
2024 |
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2024 |
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2023 |
value |
Number |
£ |
£ |
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Allotted, called up and fully paid: |
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Ordinary shares |
£1 each |
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5,400,000 |
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5,400,000 |
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5,400,000 |
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12 |
Profit and loss account |
2024 |
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2023 |
£ |
£ |
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At 1 January |
4,277,231 |
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3,115,133 |
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Profit for the financial year |
386,113 |
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1,162,098 |
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At 31 December |
4,663,344 |
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4,277,231 |
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13 |
Related party transactions |
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We loaned from our parent company (Empire Resources, Inc.) and we paid off in 2024 and there is no outstanding balance at the end of 2024. |
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14 |
Hedging Relationship |
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Our product prices, in addition to the conversion cost (Fab), also include the fluctuating metal prices (LME), and our hedging primarily targets the LME. When we purchase goods from our supplier, we sell a commodity forward to the broker. When the goods are sold to the customer, we buy back the forward. The resulting gains or losses will be recognized in the profit and loss account at the time of settlement (A/C 41120 LME Income/Expense). If the goods have not been sold to the customer before the settlement date, the settlement gains or losses will be recorded in (A/C 12510 DEFERRED HEDGING) and will only be recognized in profit and loss when the goods are sold. |
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15 |
Controlling party |
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The company is a wholly owned subsidiary of Empire Resources Inc, a company incorporated in the United States of America. The company's ultimate parent company is Ta Chen Stainless Pipe Co. Ltd, a company incorporated in Taiwan. The results of the company are consolidated into the group accounts of Ta Chen Stainless Pipe Co. Ltd which are availiable at: Ta Chen Stainless Pipe Co Ltd No.125 Hsin Tien 2nd Street, Jeng-Teh District TAINAN 717 Taiwan TWN |
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16 |
Principal place of business |
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The address of the company's principal place of business is: |
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409W & 411W Castlemill |
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Burnt Tree |
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Dudley |
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West Midlands |
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DY4 7UF |