Company Registration No. 03872973 (England and Wales)
STEELWAY FENSECURE LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2023
12 Bessemer Court
Hownsgill Industrial Park
Knitsley Lane
Consett
Co Durham
DH8 7BL
STEELWAY FENSECURE LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11 - 12
Statement of changes in equity
13
Notes to the financial statements
14 - 32
STEELWAY FENSECURE LIMITED
COMPANY INFORMATION
Directors
Mr Y Sey
Mr P W Sweeting
Mr P Noble-Jones
Company number
03872973
Registered office
Queensgate Works
Bilston Road
Wolverhampton
WV2 2NJ
Auditor
TC Group
12 Bessemer Court
Hownsgill Industrial Park
Knitsley Lane
Consett
Co Durham
DH8 7BL
STEELWAY FENSECURE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -

The directors present the strategic report for the year ended 30 June 2023.

Fair review of the business

The financial year ending June 2023 (FY22/23), represented the second full year for Steelway Fensecure Ltd under the ultimate ownership of Northern Industries. Overall, the year was very pleasing, reporting 29% growth in sales, and a 800% increase net profits, whilst also continuing the development of the businesses infrastructure under the new ownership, to facilitate continued growth in the following periods. A new financing solution was put in place in March which has removed the cashflow challenge created by the significant growth in the past 2 years.

 

The core Steelway division showed strong commercial performance, with order levels at a record level for the period. By the second quarter of the period, market pricing for Steel and other materials, whilst still volatile had begun to settle and as such the profitability of the business in the second half of the year increased significantly as the stability washed through allowing stronger alignment of cost and revenues on longer term contracts, many of which ran over from the previous reporting period.

 

With a new streamlined B2B model, the Fensecure division far exceeded expectations during the period, benefitting from strong relationships in the play sector which delivered a consistently strong requirement for the core product line.

 

Brickhouse delivered consistent and profitable levels of output throughout the year. Exceeding budgeted levels of both turnover and profitability. The division is benefiting from strong performance in its core sectors, growth from its framework contracts in the water sector and by the fourth quarter of the period, from a new revenue stream selling low complexity sheet metal products, using the excess machine hours on the new nightshift, which was introduced early 2023 at the Brickhouse site.

 

The Protect division, formed at the start of the previous financial period, showed on budget performance, doubling its turnover from the previous period. The division continues to grow its market share, and the products and services are delivering synergistic commercial benefits to the Brickhouse division, helping extend the reach for these products into the wider security sector as part of a suite of solutions provided by the Protect project team.

 

As the business enters the new financial reporting period, it does so with great optimism from the directors - carrying an order book equivalent to in excess 4 months turnover, up significantly on the same period last year, and growing month on month with a strong sales pipeline. The 2 main manufacturing sites both finished the year with a second manufacturing shift, in order to deliver a significantly increased level of operational capacity in the FY23/24 period.

 

STEELWAY FENSECURE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
Principal risks and uncertainties

The company's operations expose it to a variety of financial risks including the effects of changes in interest rates on debt, credit risk and liquidity risk.

The company does not have material exposures in any of the areas identified above and, consequently does not use derivative instruments to manage these exposures.

The company's principal financial instruments comprise sterling cash, bank deposits, a debt provider via its parent company, used for the funding of the purchase of the business together with trade debtors and trade creditors that arise directly from its operations.

 

In March, the business also introduced an invoice financing facility.

The main risks arising from the company's financial instruments can be analysed as follows:‑

Price risk
Whilst the Directors consider there is no one outstanding price risk, the business is subject to the usual trading risks:

  1. Energy/Utilities

    (The business has fixed energy contracts that take it beyond the next reporting period, so consider this not to be a short term risk.)

  2. Rent

  3. Material price increases

It is considered all reasonable steps have been taken to mitigate exposure to the risks detailed above.



Credit risk
The company's principal financial assets are bank balances, cash, and trade debtors, which represent the company's maximum exposure to credit risk in relation to financial assets.

 

The primary customer base is directly or indirectly linked to government infrastructure sites, specifically within the utility sector. Given the payment profile of these customers, the directors consider the risk associated to the debtor book to be modest.

The company's credit risk is primarily attributable to its trade debtors. Credit risk is managed by monitoring the aggregate amount and duration of exposure to any one customer depending upon their credit rating. The amounts presented in the balance sheet are net of allowances for doubtful debts, estimated by the company's management based on prior experience and their assessment of the current economic environment.

In addition, credit insurance is taken out on clients based upon their credit ratings on individual companies.

The credit risk on liquid funds is limited because the counterparties are banks with high credit‑ratings assigned by international credit‑rating agencies. The company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.

Liquidity risk
The company's policy has been to ensure continuity of funding through acquiring an element of the company's fixed assets under finance leases, and arranging funding from the company's parent company.

STEELWAY FENSECURE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
Key performance indicators

 

2023

2023

Change

 

(£)

(£)

(£)

Sales

18,690,966

14,484,886

4,206,080

Net profit/(loss) before tax

762,286

91,559

670,727

This report was approved by the board and signed on its behalf.

 

Mr P W Sweeting
Director
6 November 2023
STEELWAY FENSECURE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -

The directors present their annual report and financial statements for the year ended 30 June 2023.

Principal activities

The principal activity of the company continued to be that of steel fabrications, access covers and security equipment.

Results and dividends

The profit for the year, after taxation, amounted to £593,332 (2022 ‑ £65,888).

 

In the year ended 30 June 2023, the company achieved sales of £18,690,966 (2022 ‑ £14,484,886), an increase of 29%

A dividend of £607,157 (2022 ‑ £227,109) was paid to Steelway Group Holdings Limited.

 

Ordinary dividends were paid amounting to £607,157. 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:

Mr M S Lunde
(Resigned 1 July 2022)
Mr Y Sey
Mr P W Sweeting
Mr P Noble-Jones
Auditor

The auditor, TC Group, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr P W Sweeting
Director
6 November 2023
STEELWAY FENSECURE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 5 -

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.

STEELWAY FENSECURE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STEELWAY FENSECURE LIMITED
- 6 -
Opinion

We have audited the financial statements of Steelway Fensecure Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of comprehensive income, 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 FRS 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.

STEELWAY FENSECURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STEELWAY FENSECURE LIMITED
- 7 -

Opinions on other matters prescribed by the Companies Act 2006

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

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 and the directors' report.

 

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

 

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

STEELWAY FENSECURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STEELWAY FENSECURE LIMITED
- 8 -
Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

 

Our approach was as follows:

ŸŸŸ

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

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. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. 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 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.

STEELWAY FENSECURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STEELWAY FENSECURE LIMITED
- 9 -

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.

Rebecca Davison (Senior Statutory Auditor)
For and on behalf of TC Group
7 November 2023
Statutory Auditor
12 Bessemer Court
Hownsgill Industrial Park
Knitsley Lane
Consett
Co Durham
DH8 7BL
STEELWAY FENSECURE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
18,690,966
14,484,886
Cost of sales
(13,448,676)
(10,446,306)
Gross profit
5,242,290
4,038,580
Distribution costs
(457,135)
(295,213)
Administrative expenses
(3,956,893)
(3,642,182)
Other operating income
18,388
29,791
Operating profit
4
846,650
130,976
Interest receivable and similar income
8
16,199
-
0
Interest payable and similar expenses
9
(80,561)
(39,417)
Amounts written off investments
10
(20,002)
-
Profit before taxation
762,286
91,559
Tax on profit
11
(168,954)
(25,671)
Profit for the financial year
593,332
65,888

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

STEELWAY FENSECURE LIMITED
BALANCE SHEET
AS AT
30 JUNE 2023
30 June 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
13
9,000
13,500
Tangible assets
14
473,867
566,097
Investments
15
-
0
20,002
482,867
599,599
Current assets
Stocks
17
872,938
1,033,178
Debtors
18
5,390,099
3,013,359
Cash at bank and in hand
130,680
397,295
6,393,717
4,443,832
Creditors: amounts falling due within one year
19
(5,507,429)
(3,826,799)
Net current assets
886,288
617,033
Total assets less current liabilities
1,369,155
1,216,632
Creditors: amounts falling due after more than one year
20
(153,750)
-
0
Provisions for liabilities
Deferred tax liability
22
76,304
63,706
(76,304)
(63,706)
Net assets
1,139,101
1,152,926
Capital and reserves
Called up share capital
25
200,000
200,000
Profit and loss reserves
939,101
952,926
Total equity
1,139,101
1,152,926
STEELWAY FENSECURE LIMITED
BALANCE SHEET (CONTINUED)
AS AT
30 JUNE 2023
30 June 2023
- 12 -
The financial statements were approved by the board of directors and authorised for issue on 6 November 2023 and are signed on its behalf by:
Mr P W Sweeting
Director
Company Registration No. 03872973
STEELWAY FENSECURE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 July 2021
200,000
1,114,147
1,314,147
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
65,888
65,888
Dividends
12
-
(227,109)
(227,109)
Balance at 30 June 2022
200,000
952,926
1,152,926
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
593,332
593,332
Dividends
12
-
(607,157)
(607,157)
Balance at 30 June 2023
200,000
939,101
1,139,101
STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 14 -
1
Accounting policies
Company information

Steelway Fensecure Limited is a private company limited by shares incorporated in England and Wales. The registered office is Queensgate Works, Bilston Road, Wolverhampton, WV2 2NJ.

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.

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 financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Northern Industries UK 1 Limited. These consolidated financial statements are available online at Companies House or from its registered office, 12 Bessemer Court, Hownsgill Industrial Park, Knitsley Lane, Co. Durham, DH8 7BL.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Patents & licences
Straight Line over 10 years
1.6
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.

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 16 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Plant and equipment
5 - 25% Straight Line
Fixtures and fittings
10 - 33.33% Straight Line
Motor vehicles
20 - 33.33% Straight Line

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.

1.7
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.8
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 17 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.11
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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 18 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

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

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

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

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 19 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.12
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.13
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 20 -
1.14
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.15
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.16
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 21 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful lives of tangiable fixed assets

The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of assets. The useful economic lives and residual values are re-assessed annually.

They are amended when necessary to reflect current estimates, based on technological advancement, economic utilisation and the physical condition of the assets.

Stock valuation

The estimated selling price is reviewed for each individual stock item and the directors assess the need for any specific provisions depending on the market conditions or condition of the individual stock item.

Work in progress valuation

The carrying value of work in progress is reviewed for each individual item in order to ensure the carrying value is not in excess of the items net realisable value at any given stage in the production process. Directors assess the need for any specific provisions depending on market conditions and the condition and stage of completion of each item included in work in progress.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Core Division
9,627,234
8,072,886
Fencing
1,941,890
1,948,350
Brickhouse
4,953,433
3,582,240
Protect
2,032,297
799,314
Other
136,112
82,096
18,690,966
14,484,886
2023
2022
£
£
Turnover analysed by geographical market
UK
18,652,009
14,453,063
Europe
38,957
31,823
18,690,966
14,484,886
STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
3
Turnover and other revenue
(Continued)
- 22 -
2023
2022
£
£
Other significant revenue
Dividends received
16,199
-
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Research and development costs
19,840
22,944
Depreciation of owned tangible fixed assets
168,823
159,886
Amortisation of intangible assets
4,500
4,500
Operating lease charges
386,805
303,204
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
21,587
16,375
6
Employees

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

2023
2022
Number
Number
Production
102
81
Technical and Selling
36
45
Administration
21
12
Total
159
138
STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
6
Employees
(Continued)
- 23 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
5,367,503
4,749,034
Social security costs
521,084
445,750
Pension costs
140,448
127,763
6,029,035
5,322,547
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
284,223
237,961
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
167,574
119,961
Company pension contributions to defined contribution schemes
6,538
2,849
8
Interest receivable and similar income
2023
2022
£
£
Income from fixed asset investments
Income from shares in group undertakings
16,199
-
0
STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 24 -
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
6,593
2,760
Interest on invoice finance arrangements
70,972
-
0
Other interest
2,996
36,657
80,561
39,417
10
Amounts written off investments
2023
2022
£
£
Loss on disposal of investments held at fair value
(20,002)
-
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
156,356
-
0
Deferred tax
Origination and reversal of timing differences
12,598
25,671
Total tax charge
168,954
25,671

The rate of UK corporation tax increased from 19% to 25% from 1st April 2023.

The effective rate of tax for the period has been calculated as 20.5% based on 9 months of profits chargeable at 19% and 3 months chargeable at 25%.

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
11
Taxation
(Continued)
- 25 -

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
762,286
91,559
Expected tax charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
156,269
17,396
Tax effect of expenses that are not deductible in determining taxable profit
(153)
9,272
Tax effect of income not taxable in determining taxable profit
3,402
(21,518)
Unutilised tax losses carried forward
-
0
(8,364)
Permanent capital allowances in excess of depreciation
11,718
3,214
Deferred tax resulting from timing differences
12,598
25,671
Carried forward tax losses utilised
(14,880)
-
0
Taxation charge for the year
168,954
25,671
12
Dividends
2023
2022
£
£
Interim paid
607,157
227,109
STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 26 -
13
Intangible fixed assets
Patents & licences
£
Cost
At 1 July 2022 and 30 June 2023
45,000
Amortisation and impairment
At 1 July 2022
31,500
Amortisation charged for the year
4,500
At 30 June 2023
36,000
Carrying amount
At 30 June 2023
9,000
At 30 June 2022
13,500
14
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 July 2022
2,559,224
600,232
310,147
3,469,603
Additions
17,906
35,649
23,038
76,593
At 30 June 2023
2,577,130
635,881
333,185
3,546,196
Depreciation and impairment
At 1 July 2022
2,044,769
548,590
310,147
2,903,506
Depreciation charged in the year
140,911
27,144
768
168,823
At 30 June 2023
2,185,680
575,734
310,915
3,072,329
Carrying amount
At 30 June 2023
391,450
60,147
22,270
473,867
At 30 June 2022
514,455
51,642
-
0
566,097
STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 27 -
15
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
16
-
0
20,002
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 July 2022
20,002
Valuation changes
(20,002)
At 30 June 2023
-
Carrying amount
At 30 June 2023
-
At 30 June 2022
20,002
16
Subsidiaries

Details of the company's subsidiaries at 30 June 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Steelway Limited
Queensgate Workes, Bilston Road, Wolverhampton WV2 2NJ
Ordianry
100.00
Matt Page Installations Limited
The Cattle Sheds Edwards Green Farm, Brickendon Lane, Brickendon, Hertfordshire, England, SG13 8NT
Ordinary
100.00
17
Stocks
2023
2022
£
£
Raw materials and consumables
613,105
644,328
Work in progress
177,528
318,202
Finished goods and goods for resale
82,305
70,648
872,938
1,033,178
STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 28 -
18
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,703,649
2,819,930
Other debtors
1,462,523
9,963
Prepayments and accrued income
223,927
183,466
5,390,099
3,013,359
19
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
21
41,000
-
0
Other borrowings
21
1,306,187
-
0
Trade creditors
1,948,194
2,149,260
Corporation tax
156,356
-
0
Other taxation and social security
507,413
510,598
Deferred income
23
-
0
8,698
Other creditors
585,723
589,755
Accruals and deferred income
962,556
568,488
5,507,429
3,826,799
20
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
21
153,750
-
0
STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 29 -
21
Loans and overdrafts
2023
2022
£
£
Bank loans
194,750
-
0
Invoice discounting
1,306,187
-
0
1,500,937
-
0
Payable within one year
1,347,187
-
0
Payable after one year
153,750
-
0

The above bank loan was entered into by Steelway Fensecure Limited in March 2023, with Cynergi Finance. The loan is to be repaid in equal monthly instalments over 5 years on which interest is paid at a rate of 35%. The loan is to be fully repaid by March 2028.

The loan is secured by way of a fixed charge over the plant and equipment owned by Steelway Fensecure Limited.

 

 

An invoice discounting arrangement was entered into by the company. The invoice discounting balance is secured against the company's trade debtors and by fixed and floating charges over all the company's assets.

22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
76,304
79,295
Tax losses
-
(15,589)
76,304
63,706
STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
22
Deferred taxation
(Continued)
- 30 -
2023
Movements in the year:
£
Liability at 1 July 2022
63,706
Charge to profit or loss
12,598
Liability at 30 June 2023
76,304

 

23
Deferred income
2023
2022
£
£
Other deferred income
-
8,698
24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
140,448
127,763

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

25
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordianry of £1 each
200,000
200,000
200,000
200,000
26
Financial commitments, guarantees and contingent liabilities

Steelway Group Holdings Limited, a fellow group company, holds a loan due to Triple Point. The loan is secured via a debenture with Steelway Group Holdings Limited, Steelway Fensecure Limited, Steelway Access Covers Limited, Steelway Group Limited, JHT Fabrications Limited and JHT Group Holdings Limited. The lender has a fixed and floating charge over investments and the assets held by the entities.

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 31 -
27
Operating lease commitments
Lessee

Total operating lease payments recognised as an expense in the year to 30 June 2023 were £311,870 (2022: £396,073).

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
330,756
311,870
Between two and five years
533,585
623,117
In over five years
63,108
112,692
927,449
1,047,679
28
Ultimate controlling party

The Company's immediate parent company is Steelway Holdings Limited, a private limited company incorporated in England and Wales.

 

The ultimate parent company and controlling party is Northern Industries UK 1 Limited, a private limited company incorporated in England and Wales. The registered office is 12 Bessemer Court, Hownsgill Ind.Park, Knitsley Lane, Co. Durham, England, DH8 7BL.

 

The largest and smallest group of undertakings for which group accounts have been prepared is that headed by Northern Industries UK 1 Limited. Its group accounts are available at companies house.

STEELWAY FENSECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 32 -
29
Related party transactions
Transactions with related parties

At 30 June 2023 Steelway Fensecure Limited had the following balances outstanding (to)/from fellow group undertakings:

 

2023 2022

 

Steelway Group Holdings Limited £287,053 (£531,404)

 

JHT Fabrications Limited £39,372 £4,762

Steelway Limited (£58,351) (£58,351)

 

JHT Group holdings Limited £481,543 £-

 

CEL Sheet Metal Limited £106,503 £-

 

Matt Page Installations Limited £16,199 £-

 

 

No interest was charged or received on any of the amounts stated above.

 

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