Company registration number 1958200 (England and Wales)
KROMAT TRADING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
KROMAT TRADING LIMITED
COMPANY INFORMATION
Directors
Mr SJ Knowles
Mr GG Watt
Mr AE Gough
Mr AR Hickson
Secretary
Mr PR Campbell
Company number
1958200
Registered office
Salisbury House
London Wall
London
EC2M 5PS
Auditor
Cottons Accountants LLP
The Stables
Church Walk
Daventry
Northamptonshire
UK
NN11 4BL
KROMAT TRADING LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
5
Directors' responsibilities statement
4
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
KROMAT TRADING 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 principal activity of the company is that of traders of steel and associated products.

The company is a subsidiary of South West Structurals Limited, a company registered in England and Wales - further details of which can be found within the notes to the financial statements.

The directors consider that both the level of business and the financial position at the end of the year continue to be satisfactory. The company continues to strive to grow the customer and product base, whilst maintaining historical business relationships.

The company continues to enjoy an excellent reputation as one of few medium-sized independent steel traders able to compete with the large groups in its selected product and sales areas.

Steel by nature is a highly recyclable product. The company favours steel produced from scrap and endeavours to keep vehicle movements to a minimum. It is the policy of the company, where possible, to ship in bulk to reduce ship movements.

 

The company continues to respect the personal concerns and requirements of all staff.

 

Principal risks and uncertainties

The company is exposed to interest rate risk on its borrowings and is reliant upon facilities with its bankers (and related parties), which presents both liquidity and cash-flow risks.    The directors are of the opinion that the company's bankers are currently satisfied with the company's financial performance and do not believe that there is any immediate risk of facilities being withdrawn.    The company endeavours to always operate with a margin of available banking facilities.

The company is exposed to foreign exchange risk due to the nature of large foreign currency transactions. This is significantly mitigated through the use of forward exchange agreements matched to foreign currency contractual liabilities. There is a small residual risk attached to the possibility of being under or over-covered on contracts, but the directors consider this to be minimal.

Credit risk is mitigated through sales being credit insured or covered by security (either by way of letters of credit or cash deposits). The policy of the company is that all customers who wish to trade on credit terms with the company are subject to credit verification procedures. Receivables balances are monitored on an ongoing basis.

 

Commodity price risk is mitigated through the company principally operating with back-to-back trades, contractually covered with both supplier and customer.

 

Development and performance

Future developments

The directors note a satisfactory start to the new financial year, albeit with some activity constrained by interest rate increases and poor UK economic performance. Chinese slowdowns and EU reduced steel consumption have impacted the pricing and availability of steel leading to some reduction in demand for the company's products. However, the directors do not currently see a major impact upon the medium-term stability of the company and its finances.

KROMAT TRADING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Key performance indicators

The company's key financial and other performance indicators during the year were as follows:

 

Unit

2024

2023

Gross profit margin

%

8

9

Return on capital employed

%

74

73

Stock turnover

Days

63

69

Trade debtors

Days

62

62

Trade creditors

Days

34

14

 

Slavery and Human Trafficking Statement

The Modern Slavery Act 2015 requires certain businesses to publish a statement setting out the steps taken in the previous financial year to ensure that slavery and human trafficking is not taking place in their supply chains or own business.

Our supply chain

The company is committed to working with its supply chain and customer base to ensure that they are aware of their responsibilities under the Modern Slavery Act 2015 and that all parties remain committed to tacking the problems through their own actions.

The products sold or utilised by the company are primarily sourced from long-standing suppliers located world-wide. We work closely with steel producers all over the world and aim to visit these suppliers a minimum of once a year in order to keep in close contact with all levels of management throughout the supplier and in order to understand any changes in their production or raw material procurement.

The company does not knowingly deal with any businesses that are involved in slavery or human trafficking but does understand that this is a hidden problem that must be tackled in conjunction with suppliers. It is also fully aware of the issues and the company policy is stated in this document.

Employees

All employees involved in procurement are aware if the Modern Slavery Act 2015 and understand the requirement to report any suspicions that they may have of any violations on the part of any of our suppliers. They will also be kept advised of any changes to the act in the future.

If any violation is found through our engagement processes we will take action to address the situation, taking into consideration the interests of those whose rights have been violated.

This policy will be reviewed annually unless circumstances demand a more frequent review.

This statement is made pursuant to section 54 of the Modern Slavery Act 2015 and constitutes the company's slavery and human trafficking statement for the year ended 31st March 2025.

KROMAT TRADING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
Section 172 statement

The board of directors of Kromat Trading Limited consider that they have acted in good faith in a way that would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1) (a-f) of the Companies Act 2006) in the decisions taken during the year ended 31 March 2022.

 

Specific ways we addressed the needs of our stakeholders are:

 

Our customers

 

Our suppliers

 

Our people

 

Our community and environment

 

Our shareholders

 

On behalf of the board

Mr SJ Knowles
Director
12 August 2024
KROMAT TRADING LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 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.

KROMAT TRADING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -

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 steel trader

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

Mr SJ Knowles
Mr GG Watt
Mr AE Gough
Mr AR Hickson
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 SJ Knowles
Director
12 August 2024
KROMAT TRADING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KROMAT TRADING LIMITED
- 6 -
Opinion

We have audited the financial statements of Kromat Trading Limited (the 'company') for the year ended 31 March 2024 which comprise the profit and loss account, 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:

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.

Opinions on other matters prescribed by the Companies Act 2006

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

KROMAT TRADING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KROMAT TRADING LIMITED (CONTINUED)
- 7 -
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:

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

KROMAT TRADING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KROMAT TRADING LIMITED (CONTINUED)
- 8 -

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

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 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.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Richard Wilch FCCA
Senior Statutory Auditor
For and on behalf of Cottons Accountants LLP
19 August 2024
Chartered Accountants
Statutory Auditor
The Stables
Church Walk
Daventry
Northamptonshire
UK
NN11 4BL
KROMAT TRADING LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
40,112,761
58,214,910
Cost of sales
(36,878,199)
(52,963,923)
Gross profit
3,234,562
5,250,987
Administrative expenses
(2,017,979)
(4,077,975)
Operating profit
4
1,216,583
1,173,012
Interest receivable and similar income
8
92,231
-
0
Interest payable and similar expenses
9
(1,165,200)
(931,876)
Profit before taxation
143,614
241,136
Tax on profit
10
(43,670)
15,117
Profit for the financial year
99,944
256,253

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

KROMAT TRADING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
£
£
Profit for the year
99,944
256,253
Other comprehensive income
-
-
Total comprehensive income for the year
99,944
256,253
KROMAT TRADING LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,089
2,207
Current assets
Stocks
12
5,247,628
7,724,583
Debtors
14
7,171,681
10,424,441
Cash at bank and in hand
6,509,393
2,386,272
18,928,702
20,535,296
Creditors: amounts falling due within one year
15
(17,229,413)
(18,937,227)
Net current assets
1,699,289
1,598,069
Net assets
1,700,378
1,600,276
Capital and reserves
Called up share capital
19
50,158
50,000
Profit and loss reserves
1,650,220
1,550,276
Total equity
1,700,378
1,600,276
The financial statements were approved by the board of directors and authorised for issue on 12 August 2024 and are signed on its behalf by:
Mr SJ Knowles
Director
Company registration number 1958200 (England and Wales)
KROMAT TRADING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2022
50,000
1,294,023
1,344,023
Year ended 31 March 2023:
Profit and total comprehensive income
-
256,253
256,253
Balance at 31 March 2023
50,000
1,550,276
1,600,276
Year ended 31 March 2024:
Profit and total comprehensive income
-
99,944
99,944
Issue of share capital
19
158
-
158
Balance at 31 March 2024
50,158
1,650,220
1,700,378
KROMAT TRADING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
7,363,822
14,426,687
Interest paid
(1,165,200)
(931,876)
Income taxes paid
(80,613)
(60,040)
Net cash inflow from operating activities
6,118,009
13,434,771
Investing activities
Purchase of tangible fixed assets
(1,551)
(2,990)
Interest received
92,231
-
0
Net cash generated from/(used in) investing activities
90,680
(2,990)
Financing activities
Proceeds from issue of shares
158
-
0
Repayment of bank loans
(2,085,726)
(14,057,665)
Net cash used in financing activities
(2,085,568)
(14,057,665)
Net increase/(decrease) in cash and cash equivalents
4,123,121
(625,884)
Cash and cash equivalents at beginning of year
2,386,272
3,012,156
Cash and cash equivalents at end of year
6,509,393
2,386,272
KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
1
Accounting policies
Company information

Kromat Trading Limited is a private company limited by shares incorporated in England and Wales. The registered office is Salisbury House, London Wall, London, EC2M 5PS.

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

 

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

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

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

1.4
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:

Fixtures and fittings
4 years
Computers
2 years

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.

KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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.

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.

 

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.

1.7
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.

KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
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.

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.

KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
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.

1.9
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.

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.

KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
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

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.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sales
40,112,761
58,214,910
2024
2023
£
£
Other revenue
Interest income
92,231
-
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
-
0
(156,186)
Depreciation of owned tangible fixed assets
2,669
2,964
Operating lease charges
18,785
3,906
KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
5,300
5,313
6
Employees

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

2024
2023
Number
Number
Sales, marketing and distribution
8
8

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
866,599
1,145,790
Social security costs
110,776
125,922
Pension costs
73,150
428,800
1,050,525
1,700,512
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
372,250
613,800
Company pension contributions to defined contribution schemes
22,600
275,500
394,850
889,300

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023: 4).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
412,250
238,000
Company pension contributions to defined contribution schemes
30,000
100,000
KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
92,216
-
0
Other interest income
15
-
0
Total income
92,231
-
0
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
92,216
-
0
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
57,328
352,648
Interest payable to group undertakings
1,107,753
579,228
Other interest on financial liabilities
119
-
0
1,165,200
931,876
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
34,075
80,613
Deferred tax
Origination and reversal of timing differences
9,595
(95,730)
Total tax charge/(credit)
43,670
(15,117)
KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
10
Taxation
(Continued)
- 21 -

The actual charge/(credit) 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
143,614
241,136
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
35,904
45,816
Tax effect of expenses that are not deductible in determining taxable profit
7,391
35,535
Change in unrecognised deferred tax assets
47,095
(95,729)
Permanent capital allowances in excess of depreciation
280
(739)
Pension
(47,000)
-
0
Taxation charge/(credit) for the year
43,670
(15,117)
11
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 April 2023
5,202
22,264
27,466
Additions
-
0
1,551
1,551
At 31 March 2024
5,202
23,815
29,017
Depreciation and impairment
At 1 April 2023
4,510
20,749
25,259
Depreciation charged in the year
402
2,267
2,669
At 31 March 2024
4,912
23,016
27,928
Carrying amount
At 31 March 2024
290
799
1,089
At 31 March 2023
692
1,515
2,207
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
5,247,628
7,724,583
13
Financial instruments
KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
13
Financial instruments
(Continued)
- 22 -
Financial assets

Financial assets that are debt instruments measured at amortised cost comprise trade debtors and other debtors. As at 31st March 2024 these amounted to £6,832,264 (2023: £9,866,721).

Financial liabilities

Financial liabilities that are debt instruments measured at amortised cost comprise trade creditors, bank loans and overdrafts, other creditors and accruals. As at 31st March 2024 these amounted to £4,136,544 (2023: £6,084,469).

14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
6,832,264
9,866,721
Other debtors
225,758
299,998
Prepayments and accrued income
27,681
162,149
7,085,703
10,328,868
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 17)
85,978
95,573
Total debtors
7,171,681
10,424,441
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
-
0
2,085,726
Trade creditors
3,207,292
2,098,316
Corporation tax
34,075
80,613
Other taxation and social security
446,452
716,080
Other creditors
12,682,342
12,410,610
Accruals and deferred income
859,252
1,545,882
17,229,413
18,937,227
KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
16
Loans and overdrafts
2024
2023
£
£
Bank loans and overdrafts
-
0
2,085,726
Payable within one year
-
0
2,085,726

The bank loans and overdrafts are secured by fixed and floating charges over all assets of the company.

17
Deferred taxation

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

Assets
Assets
2024
2023
Balances:
£
£
Accelerated capital allowances
(272)
(177)
Retirement benefit obligations
40,000
87,000
Unpaid bonuses
46,250
8,750
85,978
95,573
2024
Movements in the year:
£
Asset at 1 April 2023
(95,573)
Charge to profit or loss
9,595
Asset at 31 March 2024
(85,978)
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
73,150
428,800

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.

KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
50,000
50,000
50,000
50,000
Ordinary B of 1p each
15,789
-
158
-
65,789
50,000
50,158
50,000

The company has two classes of ordinary shares.

 

The first class "A" carry no right to fixed income. The shares carry the right to participate in any distribution of the company with respects both capital and dividends. The shares carry rights to participate in a vote of the members, whether by poll or show of hands.

 

The second class "B" carry no right to fixed income. The shares carry the right to participate in any distribution of the company with respects to both capital and dividends. The shares are only entitled to any positive difference (if any) in net shareholder funds value 2023 and the adjusted shareholder funds value at the exit date. The shares carry rights to participate in a vote of the members, whether by poll or show of hands.

 

20
Capital commitments

The total amount contracted for but not provided in the financial statements was £NIL (2023: £NIL).

21
Related party transactions

Summary of transactions with group companies

 

The company sold goods to Tubetrade PLC (a subsidiary of South West Structurals Limited) during the year amounting to £2,098,952 (2023 - £6,655,176). It also purchased goods during the year amounting to nil (2023 - £54). At 31 March 2023 the trade debtor amount due from Tubetrade PLC was £220,897 (2023 - nil); the trade creditor amount due to Tubetrade PLC was nil (2023 - £57). Additionally, the company had a loan balance receivable from Tubetrade PLC at 31 March 2024 of £1 (2023 - £300,001).

 

The company sold goods to Ramsteel Tubes Limited (a wholly owned subsidiary of Tubetrade PLC) during the year amounting to £1,599 (2023 - £463,211). It also purchased goods during the year amounting to £179,207 (2023 - nil). At 31 March 2024 the trade debtors balance due from Ramsteel Tubes Limited was £4,860 (2023 - nil). At 31 March 2023 the trade creditors balance due to Ramsteel Tubes Limited was nil (2023 - ££173,438)

 

The company paid management charges to South West Structurals Limited (the parent company of Kromat Trading Limited) during the year of £650,000 (2023 - £2,050,000) and interest of £1,107,753 (2023 - £579,228). At 31 March 2023 the amount owing to South West Structurals Limited was £12,539,963 (2023 - £11,882,572).

22
Ultimate controlling party

The company's parent company and both the largest and smallest group of undertakings for which group accounts are prepared is South West Structurals Limited, a company incorporated in England and Wales. The registered office of South West Structurals Limited is: Salisbury House, London Wall, London, England, EC2M 5PS.

The ultimate controlling party is Mr S J Knowles, a director of the company.

KROMAT TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
23
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
99,944
256,253
Adjustments for:
Taxation charged/(credited)
43,670
(15,117)
Finance costs
1,165,200
931,876
Investment income
(92,231)
-
0
Depreciation and impairment of tangible fixed assets
2,669
2,964
Movements in working capital:
Decrease in stocks
2,476,955
4,680,440
Decrease in debtors
3,243,165
3,562,507
Increase in creditors
424,450
5,007,764
Cash generated from operations
7,363,822
14,426,687
24
Analysis of changes in net funds
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
2,386,272
4,123,121
6,509,393
Borrowings excluding overdrafts
(2,085,726)
2,085,726
-
300,546
6,208,847
6,509,393
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