Akwel Birmingham UK Limited - Limited company accounts 23.2

REGISTERED NUMBER: 03437265 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 DECEMBER 2022

FOR

AKWEL BIRMINGHAM UK LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Income Statement

11

Other Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15

DIRECTORS:

B C Coutier

Akwel SA

SECRETARY:

L Hambly

REGISTERED OFFICE:

5 5 Westpoint Business Park,

Bumpers Farm

Chippenham

Wiltshire

SN14 6RB

REGISTERED NUMBER:

03437265 (England and Wales)

AUDITORS:

Ad Valorem Audit Services Limited

Chartered Certified Accountants

& Statutory Auditors

2 Manor Farm Court

Old Wolverton Road

Old Wolverton

Milton Keynes

Buckinghamshire

MK12 5NN

The directors present their strategic report for the year ended 30 December 2022.

REVIEW OF BUSINESS

The principal activity of the company in the year under review was the design, manufacture and supply of components for use in the automotive industry.

The annexed financial statements show that the company made a net profit before tax during the period ended 30 December 2022 of €342,264 (2021: loss of €932,599), and had retained earnings at that date of €48,743,264 (2021: €47,836,499).

Business environment:

The UK automotive market still remains active. As always the European market remains a challenging environment in which to compete in today's society with cost pressures particularly from Eastern Europe.

Strategy:

The facility was set up to supply the UK automotive market. This remained its main objective until November 2021 when a decision was made at group level to cease manufacturing in the UK during 2022. The company and Akwel SA Group as a whole must be the most competitive option for its customers compared with any alternative sourcing solution.

Akwel Birmingham UK Limited supplies high quality products with a level of service and support. The central location of its UK premises is a diminishing advantage. Despite the company focusing its commercial efforts on products that are expensive to transport over a long distance, lower cost products from Eastern European manufacturing sites have cancelled this advantage.

Research and development:

In order to ensure the future competitiveness of the company, the parent company undertakes a process of continual research and development in order to respond to the new environmental requirements for vehicles.

Going concern:

The directors have considered the ability of the company to continue to trade for a period of 12 months from the date of this report. Although the company has adequate resources to continue to trade for that 12 month period, a commercial decision was made at group level to cease its manufacturing operations in 2022.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's activity is wholly within the automotive industry.

The COVID-19 crisis brought a high level of uncertainty to the industry. Akwel Birmingham UK Limited, and the group Akwel in general, rely on Original Equipment Manufacturers' (OEM) demand which will drop significantly in future years.

The UK automotive market now has a limited number of car based manufacturers, this has a knock-on effect limiting the number of available customers. This means that the company could have one customer making up a significant part of the company's turnover, concentrated in a few products - this concentration could be considered a risk. Akwel Birmingham UK Limited will endeavour to minimise this risk wherever practical by balancing its order book with a variety of customers and by also seeking to secure new business with new customers.

The decision to leave the European Union continues to provide a measure of uncertainty. The effect of leaving the European Union is currently still being reviewed as an emerging risk.

The company has highlighted the following risks:

Political and economic uncertainty - the need for strong leadership to limit any negative impact on the business. There is a presumption that costs will rise as the UK adapts to new laws being introduced in order to trade.

Potential trade restriction - the business has most of its supply base supported within Europe. This could lead to supply issues in the UK. Goods may be delayed due to the loss of a free market.

Labour Market - the company is an equal opportunities employer and employs many different nationalities. There may be future restrictions within labour markets and a risk of a higher turnover of employees due to changes in immigration laws.

The company will review and monitor these risks and take every step to mitigate the risks if they materialise.

The company is exposed to variations in the exchange rate between the Euro 'EUR' and UK Sterling 'GBP':

- The majority of direct purchases are in EUR

- 100% of purchases from the Group are in EUR

- The majority of sales are in EUR

- Salaries and local overhead purchases are in GBP

Whilst Akwel Birmingham UK Limited cannot control the exchange rate between EUR and GBP, it is closely monitored and significant trends, movements and forecasts are accounted for. Akwel Birmingham UK Limited also re-evaluates the level of their GBP assets in Euros on a monthly basis.

The market for our products is competitive and therefore we are subject to a price risk. If current or potential customers do not select our products, our business, financial condition and results of operations will be adversely affected.

The company derives a significant proportion of its revenue from sales to major customers. The failure of any such company to honour its debts could materially impact the company's results.

The company is subject to liquidity and cash flow risks, however given our current financial position, coupled with the manner in which these areas are constantly monitored, we believe that currently these areas present no significant threat to the company's results.

BUSINESS KEY INDICATORS

Sales

2022

2021

Variation %

Total sales

€6,705,406

€7,567,023

-11.4%

Comments:

- The main reason for the decrease is because plant activity ceased in July 2022. Remaining stock continued to be sold but all manufacturing ceased at that date..

- Due to the uncertainty still remaining with regards to the UK leaving the EU, the group has been more cautious in allocating new business to the UK subsidiary.

Profitability

2022

2021

Variation %

Gross margin

(€1,691,353

)

€188,520

-997%

Production gross margin % of total sales

-25.2%

2.5%

Operating results

(€2,748,902

)

(€3,887,607

)

29%

Operating results % of total sales

-41%

-51.4%

Overhead cost

2022

2021

Variation %

Administration expenses

€1,057,549

€4,068,281

-74.01%

% of total sales

43.8%

53.8%

Employment costs

€2,939,004

€3,472,270

-79.9%

% of total sales

10.4%

45.9%

ON BEHALF OF THE BOARD:

B C Coutier - Director

29 September 2023

The directors present their report with the financial statements of the company for the year ended 30 December 2022.

Akwel Birmingham UK Limited is a private limited company incorporated and domiciled in the United Kingdom.

DIVIDENDS

No dividends have been paid for the year to 31 December 2022 (2021: €nil), and the directors do not recommend the payment of a final dividend.

FUTURE DEVELOPMENTS

As noted in the strategic report, a decision was made at group level in November 2021 to cease manufacturing in the UK during 2022.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 31 December 2021 to the date of this report.

B C Coutier

Akwel SA

Other changes in directors holding office are as follows:

M Ward - resigned 6 May 2022

D J Ledwitch - resigned 14 October 2022

DISCLOSURE IN THE STRATEGIC REPORT

Information in respect of research and development has been included in the Strategic Report on page 2.

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;

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

AUDITORS

The auditors, Ad Valorem Audit Services Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

B C Coutier - Director

29 September 2023

Opinion

We have audited the financial statements of Akwel Birmingham UK Limited (the 'company') for the year ended 30 December 2022 which comprise the Income Statement, 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, except for the possible effects of the matters described in the basis for qualified opinion section of our report, the financial statements:

- give a true and fair view of the state of the company's affairs as at 30 December 2022 and of the company's profit for the period 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 A ct 2006.

Basis for qualified opinion

We were not appointed as auditors of the company until after 30 December 2021 and thus did not observe the counting of physical inventories at that date. We have been unable to satisfy ourselves by alternative means or by using other audit procedures as to the opening inventory quantities held at 31 December 2021. The inventories were included in the Balance Sheet at 30 December 2021 at €2,419,975. Consequently we have been unable to determine whether any adjustment to this amount was necessary.

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 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 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 qualified opinion.

Emphasis of matter

We draw attention to note 3 in the financial statements which explains that the directors intend to liquidate the company and therefore do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly the financial statements have been prepared on the break up basis. Our opinion is not modified in respect of this matter.

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 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.

As described in the basis for qualified opinion section of our report, we have been unable to satisfy ourselves concerning the opening inventory quantities of €2,419,975 held at 30 December 2021. We have concluded that where the other information refers to the inventory balance or related balances such as cost of sales, it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

We were not appointed as auditors of the company until after 30 December 2021 and thus did not observe the counting of physical inventories at that date. We have been unable to satisfy ourselves by alternative means or by using other audit procedures as to the opening inventory quantities held at 31 December 2021. The inventories were included in the balance sheet at 30 December 2021 at €2,419,975.

Consequently we have been unable to determine whether any adjustment to this amount was necessary. In addition, were any adjustment to the inventory balance to be required, the strategic report would also need to be amended.

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

Except for the matter described in the basis for qualified opinion section of our report, 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.

Arising solely from the limitation on the scope of our work relating to inventory, referred to above:

- we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

- we were unable to determine whether adequate accounting records have been kept.

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:

-	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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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:

In our process of identifying fraud risks we assessed events or conditions that indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud ("fraud risk factors") to determine how fraud risks are relevant to our audit. Based on the auditing standards we addressed two fraud risks that were relevant to our audit, in relation to revenue recognition and management override of controls. Based upon our analysis of fraud risk factors, we have not identified any additional fraud risks.

Our audit procedures included an evaluation of the design, implementation as well as the operating effectiveness of internal controls relevant to mitigate these risks. We also performed substantive audit procedures, including detailed testing of high risk journal entries and procedures to satisfy ourselves that revenue has been properly recognised in the financial statements in accordance with financial reporting standards and the Company's accounting policies. Through these procedures, we did not identify any material actual or suspected incidences of fraud.

We have evaluated facts and circumstances in order to assess laws and regulations relevant to the Company. We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience, through discussion with the Directors and other management (as required by auditing standards) and discussed with the Directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including taxation and financial reporting (including related company legislation) and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect:

- Employment legislation, reflecting the Company's workforce

- Health and safety regulation, reflecting the Company's production, distribution and operating processes

- Data privacy, reflecting the Company's management of personal and corporate data

- Environmental regulation, reflecting environmental impact restrictions, waste and contamination related to the Company's distribution and operating processes.

Auditing standards limit the required audit procedures to identify non-compliance with these regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we did not identify any material actual or suspected non-compliance in any of the above areas.

We note that our audit is not primarily designed to detect non-compliance with laws and regulations and the Directors and other management are responsible for such internal control as the Directors and other management of the Company determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to errors or fraud, including compliance with laws and regulations. Additionally, owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

Darren Kerins FCCA (Senior Statutory Auditor)

for and on behalf of Ad Valorem Audit Services Limited

Chartered Certified Accountants

& Statutory Auditors

2 Manor Farm Court

Old Wolverton Road

Old Wolverton

Milton Keynes

Buckinghamshire

MK12 5NN

29 September 2023

TURNOVER

4

6,705,406

7,567,023

Cost of sales

8,396,759

7,378,503

GROSS (LOSS)/PROFIT

(1,691,353

)

188,520

Distribution costs

-

7,846

Administrative expenses

1,057,549

4,068,281

1,057,549

4,076,127

OPERATING LOSS

7

(2,748,902

)

(3,887,607

)

Interest receivable and similar income

3,091,166

2,955,008

PROFIT/(LOSS) BEFORE TAXATION

342,264

(932,599

)

Tax on profit/(loss)

8

(564,501

)

(59,205

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

906,765

(873,394

)

PROFIT/(LOSS) FOR THE YEAR

906,765

(873,394

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

906,765

(873,394

)

FIXED ASSETS

Tangible assets

9

-

6,488,868

CURRENT ASSETS

Stocks

10

536,983

2,419,975

Debtors

11

141,109,390

135,973,340

Cash in hand

3,192,107

1,644,193

144,838,480

140,037,508

CREDITORS

Amounts falling due within one year

12

242,219

1,330,637

NET CURRENT ASSETS

144,596,261

138,706,871

TOTAL ASSETS LESS CURRENT LIABILITIES

144,596,261

145,195,739

PROVISIONS FOR LIABILITIES

13

453,249

1,959,492

NET ASSETS

144,143,012

143,236,247

CAPITAL AND RESERVES

Called up share capital

14

7,662,983

7,662,983

Share premium

15

87,736,765

87,736,765

Retained earnings

15

48,743,264

47,836,499

144,143,012

143,236,247

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2023 and were signed on its behalf by:

B C Coutier - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

€

€

€

€

Balance at 1 January 2021

7,662,983

48,709,893

87,736,765

144,109,641

Changes in equity

Total comprehensive income

-

(873,394

)

-

(873,394

)

Balance at 30 December 2021

7,662,983

47,836,499

87,736,765

143,236,247

Changes in equity

Total comprehensive income

-

906,765

-

906,765

Balance at 30 December 2022

7,662,983

48,743,264

87,736,765

144,143,012

1.	STATUTORY INFORMATION

Akwel Birmingham 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.

The presentation currency of the financial statements is the Euro (€).

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.

3.	ACCOUNTING POLICIES

BASIS OF PREPARING THE FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention. As explained in the Report of the Directors, a decision was made at group level in November 2021 to cease manufacturing in the UK. The plant closed at the end of July 2022 and the company will be liquidated at the earliest opportunity. The directors do not consider the company to be a going concern and have therefore prepared the financial statements on a break up 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 requirement of paragraph 33.7.

SIGNIFICANT JUDGEMENTS AND ESTIMATES

Depreciation is calculated on fixed assets as described below. The useful life of the fixed assets and their residual value are estimated and any inaccuracy in these figures may prove to be significant. The carrying value of fixed assets as at 30 December 2022 is set out in note 9 below. There are no other significant judgements or estimates used in the preparation of the financial statements.

TURNOVER

Turnover represents the fair value of the consideration received or receivable for goods provided in the normal course of business, net of discounts, VAT and other sales related taxes. Sales of goods are recognised when goods are delivered and title has passed.

Interest income is recognised on an accruals basis.

TANGIBLE FIXED ASSETS

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

- over 15 to 40 years on cost

Plant and machinery

- over 7 to 10 years on cost

Fixtures and fittings

- over 1 to 10 years on cost

Motor vehicles

- over 4 years on cost

Assets under construction

- not depreciated

Fixed assets are not depreciated until they are brought into use.

Secondhand equipment is depreciated over a period corresponding to 70% of the period of new equipment.

STOCKS

Stocks are valued at the lower of cost and net realisable value. Cost comprises all costs of purchase, conversion costs and other costs in bringing the stocks to their present location and condition. The cost of stocks is determined using the first-in, first-out basis.

Net realisable value represents the estimated selling prices less all estimated costs to completion and selling costs to be incurred.

Stock levels are constantly monitored, and a provision is made where any stock is considered to be obsolete.

TAXATION

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

TAX

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

RESEARCH AND DEVELOPMENT

Expenditure on research and development is written off in the year in which it is incurred.

FOREIGN CURRENCIES AND FUNCTIONAL CURRENCY

The company prepares its financial statements in Euros, which is its functional currency. Monetary assets and liabilities in other currencies are translated into Euros at the rates of exchange ruling at the balance sheet date. Transactions in other currencies are translated into Euros at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Non monetary assets and liabilities are translated at the exchange rate at the date of transaction, any gain or loss is recognised in arriving at the operating result.

The average exchange rate for the year to 30 December 2022 was €1.173211 = £1 (2021: €1.159233 = £1), and the rate at 30 December 2022 was €1.127495 = £1 (2021: €1.1907 = £1).

PENSION COSTS AND OTHER POST-RETIREMENT BENEFITS

The company operates a defined contribution pension scheme. Contributions payable for the year are charged in the profit and loss account. The assets of the scheme are held separately from those of the company in an independently administered fund.

LEASING COMMITMENTS

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

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.

WARRANTY PROVISIONS

The company continually reviews any customer complaints, and makes an appropriate provision for any remedial work.

FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised when the company has become a party to the contractual provisions of the instrument.

Trade receivables and Intra-group loans

Trade receivables and the intra-group loans are treated as loans and receivables and are initially recognised at fair value. A provision for impairment is made where there is objective evidence (including customers with financial difficulties or in default on payments), that amounts will not be recovered in accordance with original terms of the agreement. A provision for impairment is established when the carrying value of the receivable exceeds the present value of the future cash flows discounted using the original effective interest rate. The carrying value of the receivable is reduced through the use of an allowance account and any impairment loss is recognised in the income statement.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and at bank and other short-term deposits held by the company with maturities of less than three months.

Trade payables

Trade payables are not interest-bearing and are stated at their nominal value.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

4.

TURNOVER

The turnover and profit (2021 - loss) before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

Period

1/1/21

Year Ended

to

30/12/22

30/12/21

€

€

Product sales

6,705,406

7,567,023

6,705,406

7,567,023

An analysis of turnover by geographical market is given below:

Period

1/1/21

Year Ended

to

30/12/22

30/12/21

€

€

United Kingdom

4,415,638

5,984,144

Other European countries

2,160,362

1,305,886

Rest of World

129,406

276,993

6,705,406

7,567,023

5.	EMPLOYEES AND DIRECTORS

Period

1/1/21

Year Ended

to

30/12/22

30/12/21

€

€

Wages and salaries

2,606,204

3,079,482

Social security costs

314,250

278,949

Other pension costs

18,550

113,839

2,939,004

3,472,270

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

Period

1/1/21

Year Ended

to

30/12/22

30/12/21

Manufacturing and maintenance

26

47

Logistics

5

9

Engineering

3

6

Structure and quality control

9

16

43

78

6.	DIRECTORS' EMOLUMENTS

Period

1/1/21

Year Ended

to

30/12/22

30/12/21

€

€

Directors' remuneration

-

50,162

Directors' pension contributions to money purchase schemes

-

5,425

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

-

1

The services of B C Coutier and D J Ledwitch are provided by Akwel SA and no part of their remuneration is attributed to their services to Akwel Birmingham UK Limited.

No third party director's indemnity insurance is paid by Akwel Birmingham UK Limited on behalf of directors.

7.	OPERATING LOSS

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

Period

1/1/21

Year Ended

to

30/12/22

30/12/21

€

€

Depreciation - owned assets

390,353

834,331

Profit on disposal of fixed assets

(1,326,640

)

-

Auditors' remuneration for audit services

25,000

25,000

Foreign exchange differences

126,155

94,026

Stock as an expense

5,361,424

3,923,946

Research and development

-

554,956

8.

TAXATION

Analysis of the tax credit

The tax credit on the profit for the year was as follows:

Period

1/1/21

Year Ended

to

30/12/22

30/12/21

€

€

Current tax:

UK corporation tax

(112,486

)

(84,885

)

Deferred tax

(452,015

)

25,680

Tax on profit/(loss)

(564,501

)

(59,205

)