Company Registration No. 05761398 (England and Wales)
CEL SHEET METAL LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2023
12 Bessemer Court
Hownsgill Industrial Park
Knitsley Lane
Consett
Co Durham
DH8 7BL
CEL SHEET METAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Balance sheet
10
Notes to the financial statements
11 - 25
CEL SHEET METAL LIMITED
COMPANY INFORMATION
Directors
Mr Y Sey
Mr P W Sweeting
Mrs S M Shaw
Company number
05761398
Registered office
Unit C6 - C7
Stafford Park 11
Telford
Shropshire
TF3 3AY
Auditor
TC Group
12 Bessemer Court
Hownsgill Industrial Park
Knitsley Lane
Consett
Co Durham
DH8 7BL
CEL SHEET METAL 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 reported period represents the first full period for the business under the ultimate ownership of Northern Industries. This transition included the appointment of new directors for the company in March 2022.

 

Despite significant change and restructuring, the results for the financial year ending June 2023 were pleasing, sales levels when allowing for the distortion in the previous period caused by significant steel price variances, can be considered constant.

 

CEL and its directors enter the new reporting period with great optimism, and hope to see continued benefit of a more pro-active external sales strategy. That coupled with the hope that a number of traditional key clients linked to sectors that will continue to recover (both direct and indirect links to the automotive sector), it is believed will provide the base for further strong performance in the coming period.

 

Operationally the business continues to benefit from integration into the wider Northern Industries Group, in particular in its ability to rely on capacity support in the event of spike in requirements or machine downtime, providing greater resilience to the companies’ ability to trade at a consistent level.

 

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 and bank deposits. This is combined with an invoice discounting facility, cashflow loan and plant & machinery loan used for the funding of the purchase of the business, together with trade debtors and trade creditors that arise directly from its operations.

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

  2. Rent

  3. Material price increases

 

It is considered that all reasonable steps have been taken to mitigate exposure to the risks detailed above, in particular the business uses a ‘cost plus’ model for most sales transactions, that combined with a should lead-time means that the business is swiftly and effectively able to react to raw material price fluctuations.

CEL SHEET METAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
Principal risks and uncertainties (Continued)


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 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.

 

Key performance indicators

     12m to June 2023    6m to June 2022     Change

     (£)     (£)     (£)

 

Sales      10,201,223     5,828,998     4,372,225

 

Net profit/(loss) before tax 50,806     420,345     369,539

            

On behalf of the board

Mr P W Sweeting
Director
6 November 2023
CEL SHEET METAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -

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 sheet metal manufacturing.

Results and dividends

The profit for the year, after taxation, amounted to £270,517 (2022 ‑ £351,756).

 

In the year ended 30 June 2023, the company achieved sales of £10,201,223 (2022 ‑ £5,828,998).

A dividend of £405,182 (2022: £nil) was paid to CEL Sheet Metal (Holdings) Limited.

 

Directors

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

Mr Y Sey
Mr P W Sweeting
Mrs S M Shaw
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
CEL SHEET METAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -

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.

CEL SHEET METAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CEL SHEET METAL LIMITED
- 5 -
Opinion

We have audited the financial statements of CEL Sheet Metal Limited (the 'company') for the Year ended 30 June 2023 which comprise the statement of income and retained earnings, the balance sheet 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.

CEL SHEET METAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CEL SHEET METAL LIMITED
- 6 -

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.

CEL SHEET METAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CEL SHEET METAL LIMITED
- 7 -
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.

CEL SHEET METAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CEL SHEET METAL LIMITED
- 8 -

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
CEL SHEET METAL LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 JUNE 2023
- 9 -
Year
Period
ended
ended
30 June
30 June
2023
2022
Notes
£
£
Turnover
3
10,201,223
5,828,998
Cost of sales
(7,361,807)
(4,163,992)
Gross profit
2,839,416
1,665,006
Distribution costs
(433,598)
(159,097)
Administrative expenses
(2,167,129)
(1,051,064)
Operating profit
4
238,689
454,845
Interest receivable and similar income
7
339
26
Interest payable and similar expenses
8
(188,222)
(34,556)
Amounts written off investments
9
-
30
Profit before taxation
50,806
420,345
Tax on profit
10
219,711
(68,589)
Profit for the financial Year
270,517
351,756
Retained earnings brought forward
2,258,747
1,949,966
Dividends
11
(405,182)
(42,975)
Retained earnings carried forward
2,124,082
2,258,747

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

CEL SHEET METAL LIMITED
BALANCE SHEET
AS AT
30 JUNE 2023
30 June 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
1,774,611
1,975,347
Current assets
Stocks
13
419,500
503,116
Debtors
14
5,749,862
6,350,503
Cash at bank and in hand
53,948
489,469
6,223,310
7,343,088
Creditors: amounts falling due within one year
15
(4,607,763)
(5,455,682)
Net current assets
1,615,547
1,887,406
Total assets less current liabilities
3,390,158
3,862,753
Creditors: amounts falling due after more than one year
16
(565,221)
(861,964)
Provisions for liabilities
Deferred tax liability
19
344,014
385,201
(344,014)
(385,201)
Net assets
2,480,923
2,615,588
Capital and reserves
Called up share capital
21
9,804
9,804
Revaluation reserve
346,937
346,937
Capital redemption reserve
100
100
Profit and loss reserves
2,124,082
2,258,747
Total equity
2,480,923
2,615,588
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. 05761398
CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
1
Accounting policies
Company information

CEL Sheet Metal Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit C6 - C7, Stafford Park 11, Telford, Shropshire, TF3 3AY.

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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. 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.

CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 12 -
1.3
Reporting period

The reporting period under review is made up of 12 months. The previous reporting period under review was made up to 6 months. The previous accounting period was been shortened due to the company becoming part of a group during that period, to align with fellow group undertakings. For this reason the comparative figures presented are not entirely comparable.

1.4
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.

1.5
Tangible fixed assets

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

Depreciation is 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
10% reducing balance
Fixtures and fittings
25% - 33% reducing balance
Motor vehicles
25% reducing balance
Office Equipment
25% - 33% reducing balance
Tooling
10% reducing balance

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.

CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

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.

1.7
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.

1.8
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.

CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
1.9
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.

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.

CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
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.

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.

1.10
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.

1.11
Taxation

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

CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 16 -
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.

1.12
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.

1.13
Retirement benefits

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

1.14
Leases

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

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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

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.

 

The directors consider the valuation of work in progress to be a key source of estimation uncertainty. The valuation of work in progress has been estimated by applying percentage of completion of each job in progress at the reporting date to the total expected costs on the job.

 

The carrying value of work in progress at 30 June 2022 is £277,562 (Dec 2021: £287,295).

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

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.

CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales of goods
9,951,613
5,686,613
Sales of scrap metal
249,610
142,385
10,201,223
5,828,998
2023
2022
£
£
Other significant revenue
Interest income
339
26
4
Operating profit
2023
2022
Operating profit for the period is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
14,400
10,015
Depreciation of owned tangible fixed assets
219,040
108,752
Operating lease charges
144,394
66,924
5
Employees

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

2023
2022
Number
Number
65
63
CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
5
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,475,917
1,194,062
Social security costs
239,856
110,473
Pension costs
92,919
30,398
2,808,692
1,334,933
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
-
0
12,240
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
339
26
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
33,755
20,372
Interest on invoice finance arrangements
105,648
-
0
Interest on finance leases and hire purchase contracts
48,819
14,184
188,222
34,556
9
Amounts written off investments
2023
2022
£
£
Other gains and losses
-
30
CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
49,664
96,424
Adjustments in respect of prior periods
(228,188)
-
0
Total current tax
(178,524)
96,424
Deferred tax
Origination and reversal of timing differences
(41,187)
(27,835)
Total tax (credit)/charge
(219,711)
68,589

The rate of corporation tax increased from 19% to 25% with effect from 1 April 2023.

The actual (credit)/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
50,806
420,345
Expected tax charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
10,415
79,866
Tax effect of expenses that are not deductible in determining taxable profit
937
90
Depreciation in excess of capital allowances
38,312
16,468
Movement in Deferred Tax provision
(41,187)
(27,835)
Adjustment re previous years
(228,188)
-
0
Taxation (credit)/charge for the period
(219,711)
68,589
11
Dividends
2023
2022
£
£
Final paid
405,182
42,975
CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
12
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Office Equipment
Tooling
Total
£
£
£
£
£
£
Cost or valuation
At 1 July 2022
2,484,135
54,367
88,995
40,047
386,635
3,054,179
Additions
7,350
6,377
-
0
4,577
-
0
18,304
At 30 June 2023
2,491,485
60,744
88,995
44,624
386,635
3,072,483
Depreciation and impairment
At 1 July 2022
840,725
34,003
60,120
22,658
121,326
1,078,832
Depreciation charged in the Year
176,546
5,362
6,776
5,051
25,305
219,040
At 30 June 2023
1,017,271
39,365
66,896
27,709
146,631
1,297,872
Carrying amount
At 30 June 2023
1,474,214
21,379
22,099
16,915
240,004
1,774,611
At 30 June 2022
1,643,410
20,364
28,875
17,389
265,309
1,975,347

Tangible Assets with a Net Book Value of £1,474,214 (2022: £1,643,410) at 30 June 2023 are secured against the Company's Hire Purchase obligations.

Plant and machinery with a carrying amount of £1,836,120 were revalued at December 2020 by a firm of independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar machinery.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Plant and Machinary
2023
2022
£
£
Cost
2,469,633
2,469,633
Accumulated depreciation
(1,333,179)
(1,206,906)
Carrying value
1,136,454
1,262,727
CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 22 -
13
Stocks
2023
2022
£
£
Raw materials and consumables
184,382
225,554
Work in progress
235,118
277,562
419,500
503,116
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,295,727
2,899,849
Prepayments and accrued income
138,806
136,325
2,434,533
3,036,174
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
3,315,329
3,314,329
Total debtors
5,749,862
6,350,503
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
166,667
166,667
Obligations under finance leases
18
130,575
124,805
Other borrowings
17
1,588,604
2,288,247
Trade creditors
1,973,098
2,229,170
Corporation tax
49,664
296,130
Other taxation and social security
251,819
235,143
Other creditors
297,931
2,917
Accruals and deferred income
149,405
112,603
4,607,763
5,455,682
CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 23 -
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
125,000
291,667
Obligations under finance leases
18
440,221
570,297
565,221
861,964

 

17
Loans and overdrafts
2023
2022
£
£
Bank loans
291,667
458,334
Invoice discounting
1,588,604
2,288,247
1,880,271
2,746,581
Payable within one year
1,755,271
2,454,914
Payable after one year
125,000
291,667

 

A loan was entered into by CEL Sheet Metal Limited in March 2022 with a lending company Close Brothers. The loan is to be repaid in equal monthly instalments over 36 months on which interest is paid at a rate of 6% over the bank of England base rate, repayable by March 2025. the loan is secured by way of a floating charge over the assets and investments held by CEL Sheet Metal Limited.

 

An invoice discounting arrangement was entered into by the CEL Sheet Metal Limited in March 2022. The invoice discounting balance is secured against the company's trade debtors and by fixed and floating charges over the company's assets.

18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
136,545
124,805
In two to five years
434,251
570,297
570,796
695,102
CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
18
Finance lease obligations
(Continued)
- 24 -

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

19
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
344,014
385,201
2023
Movements in the Year:
£
Liability at 1 July 2022
385,201
Credit to profit or loss
(41,187)
Liability at 30 June 2023
344,014

The deferred tax liability set out above is expected to reverse within [12 months] and relates to accelerated capital allowances that are expected to mature within the same period.

20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
92,919
30,398

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.

21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
9,804
9,804
9,804
9,804
CEL SHEET METAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 25 -
22
Operating lease commitments
Lessee

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
147,231
139,971
Between two and five years
148,174
161,002
295,405
300,973
23
Related party transactions

At 30 June 2023 a balance of £3,315,329 (June 22: £3,314,329) was due to CEL Sheet Metal Limited from CEL Sheet Metal (Holdings) Limited, the companies immediate parent company.

 

At 30 June 2023 a balance of £106,351 (June 22: £nil) was due to Steelway Fensecure Limited, a fellow group undertaking,by CEL Sheet Metal Limited.

 

At 30 June 2023 a balance of £65,189 (June 22: £nil) was due to JHT Fabrications Limited, a fellow group undertaking,by CEL Sheet Metal Limited.

 

At 30 June 2023 a balance of £125,472 (June 22: £nil) was due to Northern Industries UK 1 Limited, the ultimate parent company of CEL Sheet Metal Limited. .

 

The balances above were lent interest free.

24
Ultimate controlling party

The Company's immediate parent company is CEL Sheet Metal (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.

2023-06-302022-07-01falseCCH SoftwareCCH Accounts Production 2023.300Mr Y SeyMr P W SweetingMrs S M Shawfalse057613982022-07-012023-06-3005761398bus:Director12022-07-012023-06-3005761398bus:Director22022-07-012023-06-3005761398bus:Director32022-07-012023-06-3005761398bus:RegisteredOffice2022-07-012023-06-30057613982023-06-30057613982022-01-012022-06-3005761398core:RetainedEarningsAccumulatedLosses2022-06-3005761398core:RetainedEarningsAccumulatedLosses2021-12-3105761398core:RetainedEarningsAccumulatedLosses2023-06-3005761398core:RetainedEarningsAccumulatedLosses2022-06-3005761398core:ShareCapital2023-06-3005761398core:ShareCapital2022-06-3005761398core:RevaluationReserve2023-06-3005761398core:RevaluationReserve2022-06-3005761398core:CapitalRedemptionReserve2023-06-3005761398core:CapitalRedemptionReserve2022-06-30057613982022-06-3005761398core:RetainedEarningsAccumulatedLosses2022-01-012022-06-3005761398core:PlantMachinery2023-06-3005761398core:FurnitureFittings2023-06-3005761398core:MotorVehicles2023-06-3005761398core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2023-06-3005761398core:Non-standardPPEClass2ComponentTotalPropertyPlantEquipment2023-06-3005761398core:PlantMachinery2022-06-3005761398core:FurnitureFittings2022-06-3005761398core:MotorVehicles2022-06-3005761398core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-06-3005761398core:Non-standardPPEClass2ComponentTotalPropertyPlantEquipment2022-06-3005761398core:CurrentFinancialInstrumentscore:WithinOneYear2023-06-3005761398core:CurrentFinancialInstrumentscore:WithinOneYear2022-06-3005761398core:Non-currentFinancialInstrumentscore:AfterOneYear2023-06-3005761398core:Non-currentFinancialInstrumentscore:AfterOneYear2022-06-3005761398core:CurrentFinancialInstruments2023-06-3005761398core:CurrentFinancialInstruments2022-06-3005761398core:Non-currentFinancialInstruments2023-06-3005761398core:Non-currentFinancialInstruments2022-06-3005761398core:PlantMachinery2022-07-012023-06-3005761398core:FurnitureFittings2022-07-012023-06-3005761398core:MotorVehicles2022-07-012023-06-3005761398core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-07-012023-06-3005761398core:Non-standardPPEClass2ComponentTotalPropertyPlantEquipment2022-07-012023-06-3005761398core:UKTax2022-07-012023-06-3005761398core:UKTax2022-01-012022-06-300576139812022-07-012023-06-300576139812022-01-012022-06-300576139822022-07-012023-06-300576139822022-01-012022-06-300576139832022-07-012023-06-300576139832022-01-012022-06-3005761398core:PlantMachinery2022-06-3005761398core:FurnitureFittings2022-06-3005761398core:MotorVehicles2022-06-3005761398core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-06-3005761398core:Non-standardPPEClass2ComponentTotalPropertyPlantEquipment2022-06-30057613982022-06-3005761398core:AfterOneYear2023-06-3005761398core:AfterOneYear2022-06-3005761398core:WithinOneYear2023-06-3005761398core:WithinOneYear2022-06-3005761398core:BetweenTwoFiveYears2023-06-3005761398core:BetweenTwoFiveYears2022-06-3005761398bus:PrivateLimitedCompanyLtd2022-07-012023-06-3005761398bus:FRS1022022-07-012023-06-3005761398bus:Audited2022-07-012023-06-3005761398bus:FullAccounts2022-07-012023-06-30xbrli:purexbrli:sharesiso4217:GBP