Company registration number 14094731 (England and Wales)
GENESIS STEEL (OMAGH) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
GENESIS STEEL (OMAGH) LIMITED
COMPANY INFORMATION
Directors
P M Daniels
L Coppenhall
N Croft
Company number
14094731
Registered office
Unit 6
Baxters Lane
St. Helens
Merseyside
United Kingdom
WA9 3NP
Auditor
JS. Audit Limited
James House
Stonecross Business Park
Yew Tree Way
Warrington
Cheshire
WA3 3JD
Business address
Unit 6
Baxters Lane
St. Helens
Merseyside
United Kingdom
WA9 3NP
GENESIS STEEL (OMAGH) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
GENESIS STEEL (OMAGH) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Review of the business
The company’s financial and other performance indicators during the year (2023: the period 9th May 2022 to 31 March 2023) were as follows:
The financial year saw worldwide steel prices slowly soften as they continued to come down from the record highs reached in 2022. However, through a combination of prudent purchasing and strong stock turnover, the company was able to achieve a satisfactory sales and profit performance, though the reduction in gross margin reflected the tightening of prices.
Importation procedures and trading in Northern Ireland are complex in the post-Brexit environment.
P M Daniels
Director
30 July 2024
GENESIS STEEL (OMAGH) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of the sale of steel products.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £220,984. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
P M Daniels
L Coppenhall
N Croft
Financial instruments
Market risk
This is predominantly the risk that commodity prices will move adversely in the time between the purchase order and the customer sale. The company minimizes this risk by constantly assessing stock levels and the forward order book. It aims to purchase in such as way as to maximize the contingency available against price decreases while minimizing the window of opportunity, in terms of time, for the market to move adversely, while at the same time ensuring that levels of stock are maintained so that supplies to customers remain secure. Foreign exchange represents a lesser risk, due to the fact that sterling is the predominant currency for both sales and purchases, but the company uses forward currency contracts to minimize exchange risk when necessary.
Liquidity risk
The company uses an invoice discounting facility to ensure that sufficient cash is available to meet all its financial commitments as they fall due. The company regularly performs cash flow forecasts, and ensures that its invoice discounting facility level contains sufficient contingency to deal with any unforeseen market conditions or trading events.
Credit risk
This is predominantly the risk of customer default. This risk is managed through the careful assessment of a customer's creditworthiness, both prior to commencing trade, and also throughout the trading relationship. The results of this assessment determine the credit limits and payment mechanisms that may be required. The company also uses credit insurance to further minimize credit risk.
Future developments
The steel market weakened in the months following the year end. However, the company’s adherence to its key trading principles ensured that it has achieved a stable trading performance since then. The company, along with the rest of the UK steel industry, continues to monitor events at Tata Steel UK. The effect of these developments on the UK steel market is currently uncertain, but the company is well placed to mitigate any adverse risks. The fact that steel prices have returned to much lower levels over the last two years, and that the company is predominantly re-stocked, means that the company’s general downside risk is reduced.
Auditor
JS. Audit Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
GENESIS STEEL (OMAGH) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s.414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
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
P M Daniels
Director
30 July 2024
GENESIS STEEL (OMAGH) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GENESIS STEEL (OMAGH) LIMITED
- 4 -
Opinion
We have audited the financial statements of Genesis Steel (Omagh) Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
GENESIS STEEL (OMAGH) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GENESIS STEEL (OMAGH) LIMITED (CONTINUED)
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, included in the directors' report, 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 and fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities including fraud is detailed below.
Based on our understanding of the company and sector, we identified that the principal risks of non-compliance with laws and regulations related to, but were not limited to, the Companies Act 2006, UK tax, employment, pension and health and safety legislation and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to management bias in accounting estimates and judgements and risk of fraudulent revenue recognition.
GENESIS STEEL (OMAGH) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GENESIS STEEL (OMAGH) LIMITED (CONTINUED)
- 6 -
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management about actual and potential litigation and claims, their policies and procedures to prevent and detect fraud as well as whether they have knowledge of any actual, suspected or alleged fraud;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance;
obtaining an understanding of provisions and holding discussions with management to understand the basis of recognition or non-recognition of tax provisions; and
in addressing the risk of fraud through management override of controls: testing the appropriateness of journal entries; assessing whether the accounting estimates, judgements and decisions made by management are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s 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.
Christopher Moss BSc F.C.A.
Senior Statutory Auditor
For and on behalf of JS. Audit Limited
30 July 2024
Chartered Accountants
Statutory Auditor
James House
Stonecross Business Park
Yew Tree Way
Warrington
Cheshire
WA3 3JD
GENESIS STEEL (OMAGH) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
11 Month
Year
Period
ended
ended
31 March
31 March
2024
2023
Notes
£
£
Turnover
3
22,497,819
15,317,746
Cost of sales
(19,892,043)
(13,193,031)
Gross profit
2,605,776
2,124,715
Administrative expenses
(930,100)
(568,020)
Other operating income
26,713
1,788
Operating profit
4
1,702,389
1,558,483
Interest receivable and similar income
7
122
-
Interest payable and similar expenses
8
(141,809)
(32,810)
Profit before taxation
1,560,702
1,525,673
Tax on profit
9
(381,448)
(297,101)
Profit for the financial year
1,179,254
1,228,572
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GENESIS STEEL (OMAGH) LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
201,886
136,500
Current assets
Stocks
12
2,765,872
1,316,756
Debtors
13
5,614,693
6,852,175
Cash at bank and in hand
67,437
23,669
8,448,002
8,192,600
Creditors: amounts falling due within one year
14
(6,577,746)
(7,249,740)
Net current assets
1,870,256
942,860
Total assets less current liabilities
2,072,142
1,079,360
Creditors: amounts falling due after more than one year
15
(32,272)
Provisions for liabilities
Deferred tax liability
18
2,240
(2,240)
-
Net assets
2,037,630
1,079,360
Capital and reserves
Called up share capital
20
1,000
1,000
Profit and loss reserves
2,036,630
1,078,360
Total equity
2,037,630
1,079,360
The financial statements were approved by the board of directors and authorised for issue on 30 July 2024 and are signed on its behalf by:
P M Daniels
Director
Company registration number 14094731 (England and Wales)
GENESIS STEEL (OMAGH) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 9 May 2022
-
Period ended 31 March 2023:
Profit and total comprehensive income
-
1,228,572
1,228,572
Issue of share capital
20
1,000
-
1,000
Dividends
10
-
(150,212)
(150,212)
Balance at 31 March 2023
1,000
1,078,360
1,079,360
Year ended 31 March 2024:
Profit and total comprehensive income
-
1,179,254
1,179,254
Dividends
10
-
(220,984)
(220,984)
Balance at 31 March 2024
1,000
2,036,630
2,037,630
GENESIS STEEL (OMAGH) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(690,008)
(916,845)
Interest paid
(141,809)
(32,810)
Income taxes paid
(296,385)
Net cash outflow from operating activities
(1,128,202)
(949,655)
Investing activities
Purchase of tangible fixed assets
(84,778)
(156,000)
Proceeds from disposal of tangible fixed assets
76,178
Loans advanced
(1,000)
Interest received
122
Net cash used in investing activities
(9,478)
(156,000)
Financing activities
Proceeds from issue of shares
1,000
Proceeds from borrowings
1,468,693
1,278,536
Payment of finance leases obligations
(66,261)
Dividends paid
(220,984)
(150,212)
Net cash generated from financing activities
1,181,448
1,129,324
Net increase in cash and cash equivalents
43,768
23,669
Cash and cash equivalents at beginning of year
23,669
Cash and cash equivalents at end of year
67,437
23,669
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
1
Accounting policies
Company information
Genesis Steel (Omagh) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 6, Baxters Lane, St. Helens, Merseyside, United Kingdom, WA9 3NP.
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.
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.
1.3
Turnover
Turnover represents amounts receivable for manufactured steel processing goods dispatched by the balance sheet date, net of VAT and trade discounts.
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.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and machinery
25% on cost on straight line basis
Motor vehicles
25% on cost on straight line basis
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
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.
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
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.
1.6
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.
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.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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.
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
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.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
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 critical judgement made in preparing the financial statements to be in relation to their assessment of the valuation of stock. A line by line review is carried out to determine the stock provision required.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sales of goods
22,497,819
15,317,746
2024
2023
£
£
Turnover analysed by geographical market
UK
20,874,032
14,538,139
Ireland
1,623,787
779,607
22,497,819
15,317,746
2024
2023
£
£
Other revenue
Interest income
122
-
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
8,292
(1,788)
Fees payable to the company's auditor for the audit of the company's financial statements
9,100
7,000
All other fees payable to the company's auditor
3,900
2,000
Depreciation of owned tangible fixed assets
42,532
19,500
Depreciation of tangible fixed assets held under finance leases
13,006
-
Loss on disposal of tangible fixed assets
2,676
-
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Admin
4
4
Production
3
2
Sales
3
3
Directors
3
3
Total
13
12
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
454,011
266,724
Social security costs
40,023
31,292
Pension costs
55,156
15,145
549,190
313,161
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
99,782
75,833
Company pension contributions to defined contribution schemes
35,933
8,396
135,715
84,229
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
122
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on invoice finance arrangements
140,621
32,810
Other finance costs:
Interest on finance leases and hire purchase contracts
1,188
-
141,809
32,810
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
379,924
297,101
Adjustments in respect of prior periods
(716)
Total current tax
379,208
297,101
Deferred tax
Origination and reversal of timing differences
10,535
Adjustment in respect of prior periods
(8,295)
Total deferred tax
2,240
Total tax charge
381,448
297,101
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:
2024
2023
£
£
Profit before taxation
1,560,702
1,525,673
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
390,176
289,878
Tax effect of expenses that are not deductible in determining taxable profit
283
6,757
Under/(over) provided in prior years
(716)
Deferred tax adjustments in respect of prior years
(8,295)
Depreciation in excess of capital allowances
466
Taxation charge for the year
381,448
297,101
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Taxation
(Continued)
- 18 -
A UK corporation tax rate of 25% was announced in the Chancellor's Budget of 3 March 2021 and applied from 1 April 2023. Deferred tax has been calculated at this rate.
10
Dividends
2024
2023
£
£
Final paid
220,984
150,212
11
Tangible fixed assets
Plant and machinery
Motor vehicles
Total
£
£
£
Cost
At 1 April 2023
156,000
156,000
Additions
2,800
196,978
199,778
Disposals
(81,978)
(81,978)
At 31 March 2024
158,800
115,000
273,800
Depreciation and impairment
At 1 April 2023
19,500
19,500
Depreciation charged in the year
39,408
16,130
55,538
Eliminated in respect of disposals
(3,124)
(3,124)
At 31 March 2024
58,908
13,006
71,914
Carrying amount
At 31 March 2024
99,892
101,994
201,886
At 31 March 2023
136,500
136,500
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Motor vehicles
101,994
12
Stocks
2024
2023
£
£
Raw materials and consumables
2,765,872
1,316,756
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
5,548,135
6,822,537
Other debtors
1,000
16,272
Prepayments and accrued income
65,558
13,366
5,614,693
6,852,175
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
17
16,467
Other borrowings
16
2,747,229
1,278,536
Trade creditors
3,336,045
5,553,196
Corporation tax
379,924
297,101
Other taxation and social security
63,426
9,873
Other creditors
4,172
2,742
Accruals and deferred income
30,483
108,292
6,577,746
7,249,740
Included within other loans is a balance of £2,747,229 (2023: £1,278,536) relating to a financing facility which is secured against the debts it relates to.
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
17
32,272
16
Loans and overdrafts
2024
2023
£
£
Other loans
2,747,229
1,278,536
Payable within one year
2,747,229
1,278,536
The loans are secured by fixed charges over the assets to which they relate.
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
16,467
In two to five years
32,272
48,739
Finance lease payments represent rentals payable by the company for certain items of motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Assets held under finance leases are secured against the assets to which they relate.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
5,253
-
Short term timing differences
(3,013)
-
2,240
-
2024
Movements in the year:
£
Liability at 1 April 2023
-
Charge to profit or loss
2,240
Liability at 31 March 2024
2,240
The deferred tax liability set out above is expected to reverse within 4 years and relates to accelerated capital allowances that are expected to mature within the same period.
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
55,156
15,145
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.
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary of £1 each
505
505
505
505
B Ordinary of £1 each
290
290
290
290
C Ordinary of £1 each
180
180
180
180
D Ordinary of £1 each
5
5
5
5
E Ordinary of £1 each
10
10
10
10
F Ordinary of £1 each
10
10
10
10
1,000
1,000
1,000
1,000
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2024
2023
£
£
Aggregate compensation
177,597
91,719
Transactions with related parties
During the year, the company purchased stock and had expenses recharged from a company under common control, amounting to £6,203,627 (2023: £9,257,963). Sales amounting to £4,848 (2023: £Nil) were made to this entity.
Also, during the year the company incurred management charges from the above entity of £nil (2023: £12,000).
As at 31 March 2024, £36,877 (2023: £2,604,493) was owed to this company.
During the year, the company sold items to another company under common control, amounting to £37,307 (2023: £Nil).
As at 31 March 2024, £37,307 (2023: £Nil) was due from this associated company.
Included within other debtors is an amount of £1,000 (2023: £Nil) owed from a director. This represents amounts outstanding at the year end and advances made throughout the year. The maximum amount outstanding during the year was £1,000 (2023: £Nil).
22
Ultimate controlling party
The ultimate controlling party is P M Daniels.
GENESIS STEEL (OMAGH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
23
Cash absorbed by operations
2024
2023
£
£
Profit for the year after tax
1,179,254
1,228,572
Adjustments for:
Taxation charged
381,448
297,101
Finance costs
141,809
32,810
Investment income
(122)
Loss on disposal of tangible fixed assets
2,676
-
Depreciation and impairment of tangible fixed assets
55,538
19,500
Movements in working capital:
Increase in stocks
(1,449,116)
(1,316,756)
Decrease/(increase) in debtors
1,238,482
(6,852,175)
(Decrease)/increase in creditors
(2,239,977)
5,674,103
Cash absorbed by operations
(690,008)
(916,845)
24
Analysis of changes in net debt
1 April 2023
Cash flows
New finance leases
31 March 2024
£
£
£
£
Cash at bank and in hand
23,669
43,768
-
67,437
Borrowings excluding overdrafts
(1,278,536)
(1,468,693)
-
(2,747,229)
Obligations under finance leases
-
66,261
(115,000)
(48,739)
(1,254,867)
(1,358,664)
(115,000)
(2,728,531)
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