Bright Steels Limited 00159061 false 2023-01-01 2023-12-31 2023-12-31 The principal activity of the company is the production, stockholding and sale of bright drawn steel bar. Digita Accounts Production Advanced 6.30.9574.0 true true true true 00159061 2023-01-01 2023-12-31 00159061 2023-12-31 00159061 bus:OrdinaryShareClass1 2023-12-31 00159061 bus:Consolidated 2023-12-31 00159061 core:CapitalRedemptionReserve 2023-12-31 00159061 core:RetainedEarningsAccumulatedLosses 2023-12-31 00159061 core:ShareCapital 2023-12-31 00159061 core:FinancialAssetsCostLessImpairment core:Non-currentFinancialInstruments 2023-12-31 00159061 core:CurrentFinancialInstruments core:WithinOneYear 2023-12-31 00159061 core:FurnitureFittingsToolsEquipment 2023-12-31 00159061 core:LandBuildings 2023-12-31 00159061 core:MotorVehicles 2023-12-31 00159061 core:OtherPropertyPlantEquipment 2023-12-31 00159061 core:DeferredTaxation 2023-12-31 00159061 bus:FRS102 2023-01-01 2023-12-31 00159061 bus:Audited 2023-01-01 2023-12-31 00159061 bus:FullAccounts 2023-01-01 2023-12-31 00159061 bus:RegisteredOffice 2023-01-01 2023-12-31 00159061 bus:Director2 2023-01-01 2023-12-31 00159061 bus:HighestPaidDirector 2023-01-01 2023-12-31 00159061 bus:OrdinaryShareClass1 2023-01-01 2023-12-31 00159061 bus:Consolidated 2023-01-01 2023-12-31 00159061 bus:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 00159061 core:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 00159061 core:ShareBuy-backReserve 2023-01-01 2023-12-31 00159061 core:FurnitureFittingsToolsEquipment 2023-01-01 2023-12-31 00159061 core:LandBuildings 2023-01-01 2023-12-31 00159061 core:MotorVehicles 2023-01-01 2023-12-31 00159061 core:OtherPropertyPlantEquipment 2023-01-01 2023-12-31 00159061 core:DeferredTaxation 2023-01-01 2023-12-31 00159061 core:UKTax 2023-01-01 2023-12-31 00159061 countries:AllCountries 2023-01-01 2023-12-31 00159061 2022-12-31 00159061 core:FurnitureFittingsToolsEquipment 2022-12-31 00159061 core:LandBuildings 2022-12-31 00159061 core:MotorVehicles 2022-12-31 00159061 core:OtherPropertyPlantEquipment 2022-12-31 00159061 core:DeferredTaxation 2022-12-31 00159061 2022-01-01 2022-12-31 00159061 2022-12-31 00159061 bus:OrdinaryShareClass1 2022-12-31 00159061 core:CapitalRedemptionReserve 2022-12-31 00159061 core:RetainedEarningsAccumulatedLosses 2022-12-31 00159061 core:ShareCapital 2022-12-31 00159061 core:FinancialAssetsCostLessImpairment core:Non-currentFinancialInstruments 2022-12-31 00159061 core:CurrentFinancialInstruments core:WithinOneYear 2022-12-31 00159061 core:FurnitureFittingsToolsEquipment 2022-12-31 00159061 core:LandBuildings 2022-12-31 00159061 core:MotorVehicles 2022-12-31 00159061 core:OtherPropertyPlantEquipment 2022-12-31 00159061 bus:HighestPaidDirector 2022-01-01 2022-12-31 00159061 core:UKTax 2022-01-01 2022-12-31 00159061 2021-12-31 iso4217:GBP xbrli:pure xbrli:shares

Registration number: 00159061

Bright Steels Limited

Annual Report and Financial Statements

For The Year Ended 31 December 2023

 

Bright Steels Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4

Independent Auditor's Report

5 to 7

Statement of Income and Retained Earnings

8

Balance Sheet

9

Statement of Cash Flows

10

Notes to the Financial Statements

11 to 20

 

Bright Steels Limited

Company Information


 

Directors

Mr L.P. Chouler

Mrs M.R.C. Pratt


 


 

Registered office

Norton Works
Norton
Malton
North Yorkshire
YO17 9BD



 

Auditors

Farrar Smith Limited
Chartered Accountants & Statutory Auditors
Unit 11, Fusion Court
Aberford Road
Garforth
Leeds
LS25 2GH

 

Bright Steels Limited

Strategic Report For The Year Ended 31 December 2023

The directors present their strategic report for the year ended 31 December 2023.

Fair review of the business

Global downturn affected our sector from which Bright Steels Ltd were not immune. Managing our way through challenges the year brought, showed our ability to adapt and move with the global marketplace. This enabled us to post a satisfactory year’s trading result.

As the year progressed, demand dropped away and prices moved steadily down. This led to reduction in turnover of 9.5% down to £21.1m. Gross margin, which is one of the main key performance indicators we use in the business also decreased by 6.1% to 23.6%.

2023 has been a challenge on several fronts, Inflationary pressure, higher wage costs, energy price increases, to name but a few. Moving into 2024 with CBAM now with us and further global unrest spreading in the Middle East, instability is still influencing the global marketplace.

Despite these challenges the Director's are pleased to report a pre tax profit of £605,680.

Throughout 2023 investment and improvement in our facilities and equipment continued. Plans developed in 2023 are moving to delivery in 2024 one of which will upgrade our coil production lines.

Overall the Directors are more than satisfied with the 2023 results and the Company remains in a strong position to meet the challenges ahead.

Principal risks and uncertainties

The management of the business and the nature of the market area where the company operates are subject to a number of risks.

The directors are of the opinion that a thorough risk management process is in place which involves the formal review of the risks identified.


Financial risk management
The company's operations expose it to a variety of financial business risks including the effects of changes in interest rates, foreign currency exchange rates, credit risk and liquidity risk, which are offset by a robust system of company research and analysis, credit insurance and foreign exchange facility.

The company does at times have material exposures in these areas identified above and, consequently uses derivative instruments to manage these exposures.

The directors believe that the company is well placed to manage its business risk successfully despite the current uncertain economic outlook.

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

Foreign currency risk
The company is exposed in its trading operations to the risk of changes in foreign currency exchange rates. As the company buys and sells goods in foreign currencies the overall risk is minimised and controlled by the use of the derivative instruments mentioned above. The main foreign currencies in which the company operates are the Euro, the US dollar and the Canadian dollar.

 

Bright Steels Limited

Strategic Report For The Year Ended 31 December 2023 (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 it's trade debtors. Credit risk is managed by monitoring the aggregate amount and duration of exposure to any one customer depending upon their credit rating plus credit insurance. The amounts presented in the balance sheet are net of doubtful debts, estimated by the company's management based on prior experience and their assessment of the current economic environment.

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

Approved and authorised by the Board on 25 July 2024 and signed on its behalf by:
 

.........................................
Mr L.P. Chouler
Director

 

Bright Steels Limited

Directors' Report For The Year Ended 31 December 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Principal activity

The principal activity of the company is the production, stockholding and sale of bright drawn steel bar.

Directors of the company

The directors who held office during the year were as follows:

Mr L.P. Chouler

Mrs M.R.C. Pratt

Matters covered in the strategic report
Certain information has not been included in the directors' report because it has been included in the strategic report instead under s.414c(11). The information shown in the strategic report relates to the business review, principal risks and uncertainties and key performance indicators.

Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

The auditors Farrar Smith Limited are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised by the Board on 25 July 2024 and signed on its behalf by:
 

.........................................
Mr L.P. Chouler
Director

 

Bright Steels Limited

Independent Auditor's Report to the Members of Bright Steels Limited

Opinion

We have audited the financial statements of Bright Steels Limited (the 'company') for the year ended 31 December 2023, which comprise the Statement of Income and Retained Earnings, Balance Sheet, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 31 December 2023 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.

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 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 director's 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 original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Bright Steels Limited

Independent Auditor's Report to the Members of Bright Steels Limited (continued)

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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:

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 directors' 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 Statement of Directors' Responsibilities [set out on page 4], 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 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.

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and assessing risk of material misstatements in respect of irregularities, including fraud and non compliance with laws and regulations, we considered the following:

The nature of the industry and sector. Control environment and business performance including the design of the remuneration policies, bonus levels and performance targets.

Enquiry of management and those charged with governance about their own identification and assessment of the risks of irregularities and whether such irregularities may occur as a result of fraud or error.

Detecting and responding to the risk of fraud and whether management have knowledge of any actual, suspected or alleged fraud.

When identifying and assessing the risks of material misstatement due to fraud, there is a presumption that there are risks of fraud in revenue recognition, therefore an evaluation of which type of revenue and transactions or assertions give rise to such risks.

 

Bright Steels Limited

Independent Auditor's Report to the Members of Bright Steels Limited (continued)

Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates 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.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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.

......................................
Julie Konczyk BFP FCA FCCA (Senior Statutory Auditor)
For and on behalf of Farrar Smith Limited, Statutory Auditor

Unit 11, Fusion Court
Aberford Road
Garforth
Leeds
LS25 2GH

25 July 2024

 

Bright Steels Limited

Profit and Loss Account and Statement of Retained Earnings

For The Year Ended 31 December 2023

Note

2023
£

2022
£

           

Turnover

3

 

21,067,816

 

23,290,058

Cost of sales

   

(16,100,805)

 

(16,378,776)

Gross profit

   

4,967,011

 

6,911,282

Distribution costs

   

(2,057,508)

 

(2,506,631)

Administrative expenses

   

(2,381,163)

 

(2,279,158)

Other operating income

4

 

75,434

 

73,001

Operating profit

6

 

603,774

 

2,198,494

Interest receivable and similar income

7

13,567

 

739

 

Interest payable and similar charges

8

(11,661)

 

(11,248)

 

   

1,906

 

(10,509)

Profit before tax

   

605,680

 

2,187,985

Taxation

12

 

(145,192)

 

(426,836)

Profit for the financial year

   

460,488

 

1,761,149

Retained earnings brought forward

   

12,875,165

 

11,519,353

Dividends paid

   

(405,337)

 

(405,337)

Retained earnings carried forward

   

12,930,316

 

12,875,165

 

Bright Steels Limited

(Registration number: 00159061)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

           

Fixed assets

   

 

Tangible assets

13

 

2,010,031

 

2,014,775

Investment property

14

 

2,200,000

 

2,200,000

Other financial assets

15

 

91,838

 

91,838

   

4,301,869

 

4,306,613

Current assets

   

 

Stocks

16

7,068,515

 

9,924,516

 

Debtors

17

4,053,189

 

4,604,158

 

Cash at bank and in hand

 

1,549,815

 

670,061

 

 

12,671,519

 

15,198,735

 

Creditors: Amounts falling due within one year

19

(3,294,871)

 

(5,901,799)

 

Net current assets

   

9,376,648

 

9,296,936

Total assets less current liabilities

   

13,678,517

 

13,603,549

Provisions for liabilities

20

 

(724,201)

 

(704,384)

Net assets

   

12,954,316

 

12,899,165

Capital and reserves

   

 

Called up share capital

20,025

 

20,025

 

Capital redemption reserve

23

3,975

 

3,975

 

Profit and loss account

23

12,930,316

 

12,875,165

 

Total equity

   

12,954,316

 

12,899,165

Approved and authorised by the Board on 25 July 2024 and signed on its behalf by:
 

.........................................
Mrs M.R.C. Pratt
Director

 

Bright Steels Limited

Statement of Cash Flows For The Year Ended 31 December 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

460,488

1,761,149

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

6

247,824

233,392

Profit on disposal of tangible assets

5

(3,596)

-

Finance income

7

(13,567)

(739)

Finance costs

8

11,661

11,248

Income tax expense

12

145,192

426,836

 

848,002

2,431,886

Working capital adjustments

 

Decrease/(increase) in stocks

16

2,856,001

(1,106,449)

Decrease/(increase) in trade debtors

17

550,969

(286,595)

Decrease in trade creditors

19

(2,606,928)

(542,638)

Cash generated from operations

 

1,648,044

496,204

Income taxes paid

12

(125,375)

(428,706)

Net cash flow from operating activities

 

1,522,669

67,498

Cash flows from investing activities

 

Interest received

7

13,567

739

Acquisitions of tangible assets

(243,080)

(124,987)

Proceeds from sale of tangible assets

 

3,596

-

Net cash flows from investing activities

 

(225,917)

(124,248)

Cash flows from financing activities

 

Interest paid

8

(11,661)

(11,248)

Dividends paid

24

(405,337)

(450,337)

Net cash flows from financing activities

 

(416,998)

(461,585)

Net increase/(decrease) in cash and cash equivalents

 

879,754

(518,335)

Cash and cash equivalents at 1 January

 

670,061

1,188,396

Cash and cash equivalents at 31 December

 

1,549,815

670,061

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England & Wales.

The address of its registered office is:
Norton Works
Norton
Malton
North Yorkshire
YO17 9BD

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The presentational and functional currency is the British Pound Sterling (£).

Going concern

The financial statements have been prepared on a going concern basis.

Judgements

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the anticipated actual results.The key areas requiring the use of accounting estimates and assumptions are addressed below,

Key sources of estimation uncertainty

The Directors have taken judgements and estimates and applied them consistently with regard to accounting estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities. The items in the financial statements where these judgements and estimates have been made include the useful economic lives and residual value of fixed assets, the fair value of investments, the recoverability of trade and other debtors and the valuation of inventories..

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.
The company recognises revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the company. Turnover is not disclosed by class or market since in the opinion of the directors this would be prejudicial to the interests of the company.

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Tangible assets

Tangible assets are stated in the Balance Sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Land and buildings

2% straight line

Furniture, fittings and equipment

10% - 25% straight line

Motor vehicles

20% - 25% straight line

Other property, plant & equipment

5% - 10% straight line

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually. The valuers use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss. Deferred taxation is provided on these gains at the rate expected to apply when the property is sold.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for goods sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments

Classification
The company only enters into basic financial instrument transactions, except as noted below, that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.
Derivatives, including 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 remeasured at their fair value. Changes in the fair value of derivatives are recognised in profit and loss. The company does not currently apply hedge accounting for foreign exchange contracts.

3

Turnover

The analysis of the company's revenue for the year from continuing operations is as follows:

2023
 £

2022
 £

Sale of goods

21,067,816

23,290,058

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023 (continued)

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2023
 £

2022
 £

Rent received

74,145

71,711

Sundry income

1,289

1,290

75,434

73,001

5

Other gains and losses

The analysis of the company's other gains and losses for the year is as follows:

2023
 £

2022
 £

Gain/loss on disposal of property, plant and equipment

3,596

-

6

Operating profit

Arrived at after charging/(crediting)

2023
 £

2022
 £

Depreciation expense

247,824

233,392

Foreign exchange gains

(19,734)

(143,109)

Profit on disposal of property, plant and equipment

(3,596)

-

7

Other interest receivable and similar income

2023
 £

2022
 £

Interest income on bank deposits

13,567

739

8

Interest payable and similar expenses

2023
 £

2022
 £

Interest on bank overdrafts and borrowings

7,661

8,848

Interest expense on other finance liabilities

4,000

2,400

11,661

11,248

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023 (continued)

9

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

3,030,634

3,272,802

Social security costs

318,298

376,387

Pension and related costs, defined contribution scheme

319,059

298,230

3,667,991

3,947,419

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Production

56

54

Administration and support

13

13

Sales, marketing and distribution

4

3

73

70

10

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
 £

2022
 £

Remuneration

574,750

641,533

Contributions paid to money purchase schemes

23,548

17,990

598,298

659,523

During the year the number of directors who were receiving benefits and share incentives was as follows:

2023
 No.

2022
 No.

Accruing benefits under money purchase pension scheme

1

1

In respect of the highest paid director:

2023
 £

2022
 £

Remuneration

335,920

396,811

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023 (continued)

11

Auditors' remuneration

2023
 £

2022
 £

Audit of the financial statements

16,500

17,000


 

12

Taxation

Tax charged/(credited) in the income statement

2023
 £

2022
 £

Current taxation

UK corporation tax

125,375

428,706

Deferred taxation

Arising from origination and reversal of timing differences

19,817

(1,870)

Tax expense in the income statement

145,192

426,836

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK of 23.52% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

605,680

2,187,985

Corporation tax at standard rate

142,456

415,717

Effect of expense not deductible in determining taxable profit (tax loss)

13,207

10,811

Deferred tax expense relating to changes in tax rates or laws

1,176

6,190

Decrease from effect of tax incentives

(11,647)

(5,882)

Total tax charge

145,192

426,836

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023 (continued)

13

Tangible assets

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Other property, plant and equipment
 £

Total
£

Cost or valuation

At 1 January 2023

2,457,186

705,941

252,571

6,504,361

9,920,059

Additions

-

45,686

29,939

167,455

243,080

Disposals

-

(201,542)

-

(56,002)

(257,544)

At 31 December 2023

2,457,186

550,085

282,510

6,615,814

9,905,595

Depreciation

At 1 January 2023

1,688,325

627,549

198,519

5,390,891

7,905,284

Charge for the year

45,594

38,160

30,216

133,854

247,824

Eliminated on disposal

-

(201,542)

-

(56,002)

(257,544)

At 31 December 2023

1,733,919

464,167

228,735

5,468,743

7,895,564

Carrying amount

At 31 December 2023

723,267

85,918

53,775

1,147,071

2,010,031

At 31 December 2022

768,861

78,392

54,052

1,113,470

2,014,775

Included within the net book value of land and buildings above is £723,267 (2022 - £768,861) in respect of freehold land and buildings.
 

14

Investment properties

2023
£

At 1 January

2,200,000

At 31 December

2,200,000

The investment properties were last valued by an independent third party valuer as of 31 December 2021. The directors have reviewed similar properties in the area and other available data as a basis for determining a suitable fair value at the balance sheet date. In the opinion of the directors, this value remains appropriate for the current year.

On a depreciated historic cost basis the investment properties would have a net book value of £31,426. (2022 £34,721)

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023 (continued)

15

Other financial assets (current and non-current)

2023
 £

2022
 £

Non-current financial assets

Financial assets at cost less impairment

91,838

91,838

16

Stocks

2023
£

2022
£

Raw materials and consumables

2,750,139

5,531,944

Finished goods and goods for resale

4,318,376

4,392,572

7,068,515

9,924,516

17

Debtors

Due within one year

2023
£

2022
£

Trade debtors

3,733,707

4,397,001

Other debtors

103,349

29,645

Prepayments

216,133

177,512

 

4,053,189

4,604,158

18

Cash and cash equivalents

2023
 £

2022
 £

Cash at bank

1,549,815

670,061

19

Creditors

2023
 £

2022
 £

Due within one year

Trade creditors

2,126,494

4,319,939

Social security and other taxes

463,162

797,118

Other creditors

104,000

102,400

Accrued expenses

601,215

682,342

3,294,871

5,901,799

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023 (continued)

20

Provisions for liabilities

Deferred tax
£

At 1 January 2023

704,384

Increase (decrease) in existing provisions

19,817

At 31 December 2023

724,201

21

Pension and other schemes

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions payable by the Company during the year amounted to £280,070. (2022 - £259,170)

22

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary of £1 each

20,025

20,025

20,025

20,025

         

23

Reserves

Profit and Loss Reserves represent all current and prior period retained profits and losses. £1,577,335 of the Profit and Loss reserves at 31 December 2023 (2022: £1,577,335) is non-distributable. The non-distributable element of the Profit and Loss reserves relate to investment property revaluation gains, net of related deferred taxation.

Capital Redemption Reserve represents the nominal value of share capital bought back by the company.

24

Dividends

 

2023

2022

 

£

£

Final dividend

90,112

90,112

Interim dividends

315,225

315,225

 

405,337

405,337

 

Bright Steels Limited

Notes to the Financial Statements For The Year Ended 31 December 2023 (continued)

25

Commitments

Capital commitments

At the year end the Company had capital commitments, contracted for but not provided in the financial statements of £416,305. (2022 £97,636).