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Marcegaglia Stainless Sheffield Ltd

Registered number: 13909552
Annual report and
 financial statements
For the 14 month period ended 31 December 2023

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
COMPANY INFORMATION


Directors
L M Bates 
E Bini (appointed 3 January 2023) 
A Marcegaglia (appointed 3 January 2023) 
E Marcegaglia (appointed 3 January 2023) 
D R Scaife 




Company secretary
B T Duffy (appointed 17 July 2023)



Registered number
13909552



Registered office
Yorkon Building
Europa Link

Sheffield

South Yorkshire

S9 1TZ




Independent auditors
Forvis Mazars LLP
Chartered Accountants & Statutory Auditor

5th Floor

3 Wellington Place

Leeds

LS1 4AP





 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 

CONTENTS



Page
Strategic Report
 
1 - 4
Directors' Report
 
5 - 8
Independent Auditors' Report
 
9 - 12
Statement of Comprehensive Income
 
13
Statement of Financial Position
 
14 - 15
Statement of Changes in Equity
 
16
Notes to the Financial Statements
 
17 - 36

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
STRATEGIC REPORT
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

Introduction
 
The directors present the Strategic Report for Marcegaglia Stainless Sheffield Ltd (the "Company") for the 14 month period ended 31 December 2023. The prior year information is for the unaudited 9 month period ended 31 October 2022 and is therefore not directly comparable. The Company was dormant in the prior period.
Marcegaglia Stainless Sheffield Limited was formed from a hive down into a subsidiary undertaking, Outokumpu Long Products Ltd by Outokumpu Stainless Ltd on 1 November 2022, having prepared dormant financial statements for the period from incorporation to 31 October 2022.
On 3 January 2023 the sale of Outokumpu Long Products Ltd, together with Long Products businesses in Sweden and the USA to Marcegaglia was completed and the name of the UK company was changed to Marcegaglia Stainless Sheffield Ltd.

Business review
 
The profit and loss for the 14 month period is shown on page 13. 
The 14-month period was characterised by a strong market in the first half which was a continuation of the global business improvements starting in 2021 and continuing during 2022. During the second half of the year there was a weakening in market demand resulting in lower prices and volumes for the industry as a whole. Despite these challenges the Company achieved a satisfactory result for the year, supported by the effects of the acquisition by Marcegaglia Group which provided increased loading stability by partially vertically integrating the overall Marcegaglia Group by the acquisition.

Principal risks and uncertainties
 
The management of the business is subject to a number of risks. The key business risks affecting the Company relate to competition from overseas, currency exchange and metal price volatility. The risk from overseas competitors is managed by continuous drive for efficiencies and in the business’ cost base. Metal price volatility is reduced by the use of alloy surcharges which enable partial hedging of the metal risks; in addition, the majority of the semis sales of the business are supplied to group companies worldwide on a cost-plus basis which mitigates the impact of metals risk for the Company. 
Credit risk is managed through a combination of credit insurance and robust internal and group credit control procedures.
Operational risks include inadequate or failed internal processes, employee actions, systems or events such as natural catastrophes and misconduct or crime. Risks of these types are often connected with production operations, logistics, financial processes, major investment projects, other projects or information technology and, should they materialise can lead to personal injury, liability, loss of property, interrupted operations or environmental impacts.
Marcegaglia Stainless Sheffield Limited’s operational risks are partly covered by insurance. The key operational risks for the Company are: a major fire or accident, IT dependency, project implementation risks and personnel related risks. To minimise possible damage to property and business interruptions which could result from a fire occurring at the production sites, Marcegaglia has systematic fire and security audit programmes in place.
Liquidity for the Company is provided by Marcegaglia Group and therefore is directly linked to that of Marcegaglia Holdings S.r.l. Cash pooling arrangements will be introduced in 2024.

- 1 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

Financial key performance indicators
 
The following KPIs form a part of the overall management administration structure used by management to monitor business performance.


2023

Operating margin
2.0%
Operating profit/turnover



Return on capital employed
35.1%
Operating profit/average operating capital



Revenue per employee
1.9
Turnover (£m)/employee numbers
Debtors days
36
Trade debtors/turnover
Stock days
63
Stock/cost of sales
Employee numbers
395
Average during the year
Accident rate
3.7
Lost time accidents per million working hours

The above KPIs form part of a comprehensive set of KPIs used throughout the business on a daily, weekly, monthly and quarterly basis. As the Company was dormant in the previous period there is no comparative information. 
Business activity is monitored in management meetings held on a monthly basis.

Future developments
 
The acquisition of Marcegaglia Stainless Sheffield Ltd by Marcegaglia Group is an important part of the Group strategy to integrate upstream, and the supply of Stainless Steel slabs to the Marcegaglia Group grew through 2023. The efficiency of any melting shop is underpinned by a high utilisation rate, and continued increases in supply to the group are progressing well in 2024, with an aim to double the production levels in the melting shop compared with those on acquisition.
The Company also supplies semi-finished product to other Long Products units in Sweden and the USA that were part of the Long Products acquisition by Marcegaglia, as well as for internal consumption for rod and bar sales, together with external semi-product sales. Growth is targeted in all downstream segments in the coming years to further increase production of the company.
Work is ongoing to increase the efficiency and throughput of the business, supported by targeted capital investment where required to enable a total melting output of more than 500,000t of Stainless Steel to be produced in the melting shop in the coming years. 

- 2 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

Section 172 statement
Directors’ statement of compliance with duty to promote the success of the Company
The Directors of the Company act in accordance with the set of duties as detailed in s172 of the UK Companies Act 2006 which is summarised as follows:
Section 172 of The Companies Act 2006 states that a director of a company must act in the way he/she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to: 
 the likely consequences of any decision in the long term; 
 the interests of the Company’s employees; 
 the need to foster the Company’s business relationships with suppliers, customers and others; 
 the impact of the Company’s operations on the community and the environment; 
 the desirability of the Company maintaining a reputation for high standards of business conduct; and 
 the need to act fairly as between members of the Company.
Our people and values
Our employees are integral to our business objectives and performance. For the business to be successful we work collaboratively with our teams, coach and develop their talents, and proactively seek to hear feedback. We have reward and recognition schemes in place to celebrate success. We actively manage the Health and Safety of our teams through robust processes, reporting and upskilling both hands on and e learning where appropriate. We meet all regulatory requirements and document updates and outcomes. Our employee handbook emphasizes the expectation that all colleagues are treated fairly and with respect; we have clear guidance on the behaviours we positively promote and the standard to which we hold each other to account.
Business Relationships
We maintain productive relationships with all our suppliers and customers, through regular and transparent communications. In addition, it is company policy to pay suppliers promptly and to agreed terms. We proactively search for business partnerships that hold like minded values, such as honesty and integrity.
Community and environment
We continue to support charities with causes that resonate with our colleagues and are important to our local communities with a focus on child and youth development and wellbeing.
Shareholders
We have ultimate shareholders to whom all activities are reportable. The strategy is agreed by the Board of Directors and managed through the annual budget compilation, review and reporting processes, which is updated quarterly to ensure that medium and long term goals are being met to support the ongoing development and success of the Company.

- 3 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023


This report was approved by the board on 29 August 2024 and signed on its behalf.



E Marcegaglia
Director
- 4 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
DIRECTORS' REPORT
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

The Directors present their report and the financial statements for the 14 month period ended 31 December 2023.

Directors' responsibilities statement

The Directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The principal activity of the Company is the manufacture and distribution of stainless steel products.

Results and dividends

The profit for the 14 month period, after taxation, amounted to £15,300k (unaudited 9 month period ended 31 October 2022 - £Nil).

Dividends paid in the period amounted to £Nil (unaudited 9 month period ended 31 October 2022 - £Nil).
- 5 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

Directors

The Directors who served during the 14 month period were:

L M Bates 
E Bini (appointed 3 January 2023) 
A Marcegaglia (appointed 3 January 2023) 
E Marcegaglia (appointed 3 January 2023) 
D R Scaife 
M G Mikiewicz (resigned 3 January 2023)

Going concern

At the time of approving the financial statements, the Company's Directors have a reasonable expectation that the Company will be able to continue in operational existence for the foreseeable future. 
The Company is a significant part of the €228m acquisition of the former Outokumpu Long Products Division by Marcegaglia Group (“Group”) on 3 January 2023 and is a key part of the Group's drive to further improve sustainability and competitiveness by vertical integration into steelmaking. The acquisition of the Company enables Marcegaglia Group to both reinforce the long products steel portfolio and strengthen the flat products businesses in Italy with supply from the UK.  The Group has clear growth plans for the Company supported by capital investments to reach beyond 500,000 tonnes of stainless steel per annum which will be used to supply other parts of the Group as well as for external customers. As part of the growth, an investment of over £20m has just been approved by Group to improve output in the arc furnace.
The Directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements to support the going concern assessment. In addition, the Marcegaglia Group, headed by Antonio and Emma Marcegaglia (who are also directors of the Company), provides liquidity for the Company via access to credit lines and through Group loans as required. 
Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Engagement with employees

The Company places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Company. Employee representatives are consulted regularly on a wide range of matter affecting their current and future interests. 

Disabled employees

Applications for employment by disabled persons are always fully considered, bearing in mind the abilities of the application concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the Company continues and that appropriate  training is arranged. It is the policy of the Company that the training, career development and promotion of disabled persons should, as far as possible be identical to that of other employees. 

Qualifying third party indemnity provisions

Directors' and officers' insurance is in place for all directors to provide appropriate cover for their reasonable actions on behalf of the Company. No further directors' indemnities are in place.

- 6 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

Greenhouse gas emissions, energy consumption and energy efficiency action

The Company's greenhouse gas emissions and energy consumption for the 14 month period are as follows:


Energy Consumption over reporting period (MWh)
Emission intensity (kgCO2/t product)

Electricity
Natural Gas
Propane
Diesel
Scope 1
Scope 2
Company
200,059
115,552
5,585
8,700
157
110

Scope 1 (direct) carbon emissions from melting operations are verified as part of the requirements for participation in the UK carbon emissions trading scheme (UKETS), emissions from rolling operations are calculated using the same factors from the UK National GHG Inventory (2023).  Scope 2 (indirect) emissions are calculated from electricity consumption and a UK grid average carbon intensity of 162 kgCO2/kWh.
This is the first year of reporting for Marcegaglia Stainless Sheffield Ltd, covering the 14 months from 1 November 2022 to 31 December 2023 inclusive, and as such no comparable date from previous years is available.
In the melting operations, the majority of electricity  is consumed in the electric arc furnace (EAF) where electrical energy is used to melt scrap and other raw materials. Natural gas is used to pre-heat or dry refractory linings, and propane is used as a fuel for cutting torches. The majority of diesel is used as fuel for on-site transport of raw materials and product. At rolling operations, the majority of natural gas is used to re-heat or anneal steel stock.
Energy consumption is a significant proportion of our operating costs and is carefully monitored and tracked. Energy and resource efficiency is at the forefront of all we do, and projects to improve our performance are always considered. In 2023, a new furnace optimisation model was installed at SMACC which significantly reduced specific electricity usage. In 2024 we are examining options to reduce waste heat across all operations.
Carbon emissions from the production of stainless steel are dominated not by scope 1 or scope 2 emissions, but by the upstream contribution from the mining, refining and transportation of alloys such as ferrochrome or ferronickel (so called scope 3 emissions). In a bid to reduce the our overall impact, the use of these ferro-alloys is minimised through careful selection of scrap materials, providing a secondary source of chrome and nickel constituents. Our use of secondary sources is being tracked and subject to targets, and in 2024 we are developing a tool to estimate our scope 3 emissions on a monthly basis.

Matters covered in the Strategic Report

Certain information is not shown in the Director's Report because it is shown in the Strategic Report on pages 1 - 4 instead under s414C(11). The Strategic Report includes a business review, principal risks and uncertainties, future developments and information on the Company's key performance indicators.

Disclosure of information to auditors

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
- 7 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

Post balance sheet events

On 27 February 2024, the intercompany loan account of £48,749k was converted into share capital following an allotment of shares to Marcegaglia Steel SpA.

Auditors

Forvis Mazars LLP were appointed as auditors during the period.

The auditorsForvis Mazars LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 29 August 2024 and signed on its behalf.
 





E Marcegaglia
Director
- 8 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARCEGAGLIA STAINLESS SHEFFIELD LTD
 

Opinion

We have audited the financial statements of Marcegaglia Stainless Sheffield Ltd (the ‘Company’) for the 14 month period ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity 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 FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

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 14 month period 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’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.
- 9 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARCEGAGLIA STAINLESS SHEFFIELD LTD
 

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 the 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.

Matters on which we are required to report by exception

In 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
- 10 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARCEGAGLIA STAINLESS SHEFFIELD LTD
 

Responsibilities of Directors

As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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 intend either 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 the financial statements. 
 
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
 
Irregularities, including 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. 

Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: UK tax legislation and health and safety regulation.

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.  

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006. 
- 11 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARCEGAGLIA STAINLESS SHEFFIELD LTD
 

In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition which we pinpointed to the cut off assertion and significant one-off or unusual transactions. 

Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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.

Use of the audit 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.




Shaun Mullins (Senior Statutory Auditor)

  
for and on behalf of

Forvis Mazars LLP
Chartered Accountants and Statutory Auditor 
5th Floor
3 Wellington Place
Leeds
LS1 4AP

29 August 2024
- 12 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

14 month
period
ended 31 December 2023
9 month period
ended 31 October 
2022 (Unaudited)
Note
£000
£000

  

Turnover
 4 
746,772
-

Cost of sales
  
(719,135)
-

Gross profit
  
27,637
-

Administrative expenses
  
(12,497)
-

Operating profit
 5 
15,140
-

Interest receivable and similar income
 9 
166
-

Interest payable and similar expenses
 10 
(5,953)
-

Profit before tax
  
9,353
-

Tax on profit
 11 
5,947
-

Profit for the financial 14 month period
  
15,300
-

Other comprehensive income for the 14 month period
  

Unrealised surplus on revaluation of tangible fixed assets
  
51,360
-

Deferred tax movement on revaluation
  
(12,840)
-

Total comprehensive income for the 14 month period
  
53,820
-

The notes on pages 17 to 36 form part of these financial statements.
- 13 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
REGISTERED NUMBER: 13909552

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022 (Unaudited)
Note
£000
£000

  

Fixed assets
  

Intangible assets
 12 
1,852
-

Tangible assets
 13 
92,722
-

  
94,574
-

Current assets
  

Stocks
 14 
124,453
-

Debtors: amounts falling due within one year
 15 
69,558
-

Cash at bank and in hand
 16 
4,367
-

  
198,378
-

Creditors: amounts falling due within one year
 17 
(155,259)
-

Net current assets
  
 
 
43,119
 
 
-

Total assets less current liabilities
  
137,693
-

  

Creditors: amounts falling due after more than one year
 18 
(48,749)
-

  
88,944
-

Provisions for liabilities
  

Deferred taxation
 19 
(6,802)
-

Other provisions
 20 
(13,572)
-

Net assets
  
 
 
68,570
 
 
-


Capital and reserves
  

Called up share capital 
 21 
14,750
-

Revaluation reserve
 22 
37,593
-

Profit and loss account
 22 
16,227
-

  
68,570
-

- 14 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
REGISTERED NUMBER: 13909552
    
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 August 2024.




E Marcegaglia
Director

The notes on pages 17 to 36 form part of these financial statements.
- 15 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

£000
£000
£000
£000


At 11 February 2022 (unaudited)
-
-
-
-
Total comprehensive income for the period
-
-
-
-



At 1 November 2022
-
-
-
-


Comprehensive income for the 14 month period

Profit for the 14 month period
-
-
15,300
15,300

Surplus on revaluation of tangible fixed assets
-
51,360
-
51,360

Depreciation on revaluation transfer
-
(927)
927
-

Deferred tax movement on revaluation
-
(12,840)
-
(12,840)
Total comprehensive income for the 14 month period
-
37,593
16,227
53,820


Contributions by and distributions to owners

Shares issued during the 14 month period
14,750
-
-
14,750


Total transactions with owners
14,750
-
-
14,750


At 31 December 2023
14,750
37,593
16,227
68,570


The notes on pages 17 to 36 form part of these financial statements.

- 16 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

1.


General information

Marcegaglia Stainless Sheffield Ltd ("the Company") is a private limited company, limited by shares and registered in England & Wales, registration number 13909552.
The address of the registered office is Yorkon Building, Europa Link, Sheffield, United Kingdom, S9 1TZ.
The principal activity of the Company is the manufacture and distribution of stainless steel products.
The prior year information is for the unaudited 9 month period ended 31 October 2022 and is therefore not directly comparable. The Company was dormant in the prior year.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Marcegaglia Holdings S.r.l. as at 31 December 2023 and these financial statements may be obtained from Bresciani16 Gazoldo Degli Ippoliti, Mantova, 46040 Italy.

- 17 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

At the time of approving the financial statements, the Company's Directors have a reasonable expectation that the Company will be able to continue in operational existence for the foreseeable future. 
The Company is a significant part of the €228m acquisition of the former Outokumpu Long Products Division by Marcegaglia Group (“Group”) on 3 January 2023 and is a key part of the Group's drive to further improve sustainability and competitiveness by vertical integration into steelmaking. The acquisition of the Company enables Marcegaglia Group to both reinforce the long products steel portfolio and strengthen the flat products businesses in Italy with supply from the UK.  The Group has clear growth plans for the Company supported by capital investments to reach beyond 500,000 tonnes of stainless steel per annum which will be used to supply other parts of the Group as well as for external customers. As part of the growth, an investment of over £20m has just been approved by Group to improve output in the arc furnace.
The Directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements to support the going concern assessment. In addition, the Marcegaglia Group, headed by Antonio and Emma Marcegaglia (who are also directors of the Company), provides liquidity for the Company via access to credit lines and through Group loans as required. 
Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP, rounded to the nearest £1,000.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

- 18 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.6

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.9

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

- 19 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.11

Current and deferred taxation

The tax expense for the 14 month period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

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 in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.12

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

- 20 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Land and buildings
-
2.5 - 4%
Plant & machinery
-
5 - 20%
Fixtures & fittings
-
5 - 20%
Assets under construction
-
Not depreciated until in use

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.14

Revaluation of tangible fixed assets

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 
2.15

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is 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.

- 21 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.16

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.18

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.19

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
- 22 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.20

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Statement of Financial Position 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

- 23 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.20
Financial instruments (continued)

Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

- 24 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Critical judgments in applying the Company's accounting policies
The critical judgments that the Directors have made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements:
(i) Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the Directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability and where applicable, the ability of the asset to be operated as planned. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
(i) Stock provisioning 
The Company manufactures and sells stainless steel and is subject to fluctuations in metal prices. As a result, it is necessary to consider recoverability of the cost of inventory and any associated provisioning. When calculating stock provisioning the directors have considered both internal and external sources of information including quantity of stock item held, current orders of the stock item, historic saleability of the stock item and wider market conditions.


4.


Turnover

Analysis of turnover by country of destination:

14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
£000
£000

United Kingdom
7,056
-

Rest of Europe
633,459
-

Rest of the world
106,257
-

746,772
-


- 25 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

5.


Operating profit

The operating profit is stated after charging:

14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
£000
£000

Research & development charged as an expense
32
-

Exchange differences
6,370
-

Defined contribution pension cost
2,685
-

Depreciation expense
5,883
-

Loss on disposal of assets
64
-


6.


Auditors' remuneration

During the 14 month period, the Company obtained the following services from the Company's auditors:


14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
£000
£000

Fees payable to the Company's  for the audit of the Company's financial statements
175
-

Fees payable to the Company's  in respect of:

Taxation compliance services
11
-

All non-audit services not included above
109
-


295
-


- 26 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

7.


Employees

Staff costs, including Directors' remuneration, were as follows:


14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
£000
£000

Wages and salaries
20,761
-

Social security costs
2,317
-

Cost of defined contribution scheme
2,685
-

25,763
-


The average monthly number of employees, including the Directors, during the 14 month period was as follows:


14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
            No.
            No.







Employees
395
-

- 27 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

8.


Directors' remuneration

14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
£000
£000

Directors' emoluments
304
-

Company contributions to defined contribution pension schemes
16
-

320
-


During the 14 month period retirement benefits were accruing to 2 Directors (unaudited 9 month period ended 31 October 2022: NIL) in respect of defined contribution pension schemes.

The highest paid Director received remuneration of £181k (unaudited 9 month period ended 31 October 2022: £NIL).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £16k (unaudited 9 month period ended 31 October 2022: £NIL).


9.


Interest receivable

14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
£000
£000


Bank interest receivable
166
-

- 28 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

10.


Interest payable and similar expenses

14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
£000
£000


Bank interest payable
483
-

Loans from group undertakings
5,470
-

5,953
-


11.


Taxation


14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
£000
£000

Corporation tax


Current tax on profits for the year
92
-

Total current tax
92
-

Deferred tax


Origination and reversal of timing differences
(6,039)
-

Total deferred tax
(6,039)
-


Tax on profit
(5,947)
-
- 29 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023
 
11.Taxation (continued)


Factors affecting tax charge for the 14 month period/period

The tax assessed for the 14 month period is lower than (2022 - the same as) the standard rate of corporation tax in the UK of22.87% (2022 - 19%). The differences are explained below:

14 month period ended 31 December 2023
9 month period ended 31 October 2022 (Unaudited)
£000
£000


Profit on ordinary activities before tax
9,353
-


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 22.87% (2022 - 19%)
2,139
-

Effects of:


Expenses not deductible for tax purposes
1,408
-

Fixed asset differences
73
-

Other tax adjustments, reliefs and transfers
(9,054)
-

Chargeable gains
11,748
-

Deferred tax charged directly to STRGL
(12,840)
-

Remeasurement of deferred tax for changes in tax rates
579
-

Total tax charge for the period
(5,947)
-


Factors that may affect future tax charges

From 1 April 2023, the rate of corporation tax in the United Kingdom increased from 19% to 25%. Companies with profits of £50,000 or less continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate applies but with a marginal relief applying as profits increase.
The Company has applied the temporary mandatory exemption to recognising and disclosing information about deferred tax assets and liabilities related to Pillar II income taxes in accordance with the FRC amendments to FRS 102. The Company has also chosen to apply the Pillar II disclosure exemption as equivalent disclosures are included in the Marcegaglia Holdings S.r.l. 2023 consolidated financial statements.  

- 30 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

12.


Intangible assets






Computer software
General intangibles
Total

£000
£000
£000



Cost


Additions
1,096
-
1,096


Transfers
-
756
756



At 31 December 2023

1,096
756
1,852






Net book value



At 31 December 2023
1,096
756
1,852



At 31 October 2022 (Unaudited)
-
-
-



- 31 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

13.


Tangible fixed assets







Land and buildings
Plant & machinery
Assets under construction
Total

£000
£000
£000
£000



Cost or valuation


Additions
2,654
3,654
613
6,921


Disposals
(21)
(2,322)
-
(2,343)


Transfers
17,974
141,290
1,702
160,966


Revaluations
51,360
-
-
51,360



At 31 December 2023

71,967
142,622
2,315
216,904



Depreciation


Charge for the period
1,090
4,793
-
5,883


Disposals
(21)
(2,256)
-
(2,277)


Transfers
15,775
104,801
-
120,576



At 31 December 2023

16,844
107,338
-
124,182



Net book value



At 31 December 2023
55,123
35,284
2,315
92,722



At 31 October 2022 (Unaudited)
-
-
-
-


14.


Stocks

2023
2022 (Unaudited)
£000
£000

Raw materials and consumables
74,181
-

Work in progress (goods to be sold)
31,147
-

Finished goods and goods for resale
19,125
-

124,453
-


- 32 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

15.


Debtors

2023
2022 (Unaudited)
£000
£000

Trade debtors
7,441
-

Amounts owed by group undertakings
46,220
-

Other debtors
14,491
-

Prepayments and accrued income
385
-

Tax recoverable
1,021
-

69,558
-


Amounts owed by group undertakings are unsecured, interest free and repayable on demand.


16.


Cash and cash equivalents

2023
2022 (Unaudited)
£000
£000

Cash at bank and in hand
4,367
-



17.


Creditors: Amounts falling due within one year

2023
2022 (Unaudited)
£000
£000

Trade creditors
92,813
-

Amounts owed to group undertakings
45,891
-

Other taxation and social security
465
-

Accruals and deferred income
16,090
-

155,259
-


Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

- 33 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

18.


Creditors: Amounts falling due after more than one year

2023
2022 (Unaudited)
£000
£000

Amounts owed to group undertakings
48,749
-


See note 25 for post balance sheet event in regards to this loan. Interest is charged on this loan at 6%.


19.


Deferred taxation






2023


£000






Charged to profit or loss
(6,802)



At end of year
(6,802)

The deferred taxation balance is made up as follows:

31 December
31 October
2023
2022 (Unaudited)
£000
£000


Fixed asset timing differences
6,038
-

Capital gains
(12,840)
-

(6,802)
-

- 34 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

20.


Provisions






Radiation provision
Decommissioning provision
Customer complaints provision
Total

£000
£000
£000
£000





Transfers on 1 November 2022
(2,077)
(9,300)
(1,044)
(12,421)


Charged to P&L
190
-
(1,341)
(1,151)



At 31 December 2023
(1,887)
(9,300)
(2,385)
(13,572)

Radiation provision: During the year 2000, Outokumptu Stainless Limited's routine operating practices identified a low level of radioactive contamination during testing of waste materials. This is believed to have arisen from contamination within a scrap load - scrap is used as a primary raw material. The Health and Safety Executive and Environmental Agency have indicated that the Company has done everything possible to address the issue and that any risk to the public or employees is insignificant. The provision of £2.1m was hived down from Outokumpu Stainless Limited. The provision is calculated based on the estimated cost of disposing of the contaminated materials.
Decommissioning Liabilities: The decommissioning provision relates to the cost of capping a landfill site on the Europa Link site. £9.3m of costs are expected to be incurred up to 2046 including aftercare. The provision has been based on current environmental standards and current prices.
Customer complaints provision: Provisions totalling £2.4m have been made in respect of potential customer-related claims.  


21.


Share capital

2023
2022 (Unaudited)
£000
£000
Authorised, allotted, called up and fully paid



14,750,100 (2022 - 100) Ordinary shares of £1 each
14,750
-


The 14,750,100 Ordinary shares carry the right to vote, receive dividends and capital distribution rights.


22.


Reserves

Revaluation reserve

The revaluation reserve represents cumulative gains recognised on the revaluation of land and buildings.

Profit & loss account

The profit and loss account represents profits made by the company less any dividends declared.

- 35 -

 
MARCEGAGLIA STAINLESS SHEFFIELD LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 14 MONTH PERIOD ENDED 31 DECEMBER 2023

23.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £2,685k for the 14 month period ended 31 December 2023 (unaudited 9 month period ended 31 October 2022: £Nil).
At the balance sheet date £Nil (2022: £Nil) was payable to the fund.


24.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022 (Unaudited)
£000
£000


Not later than 1 year
690
-

Later than 1 year and not later than 5 years
1,750
-

2,440
-


25.


Related party transactions

The Company has taken advantage of the exemption available in section 33 of FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" related party disclosures from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company.


26.


Post balance sheet events

On 27 February 2024, the intercompany loan account of £48,749k was converted into share capital following an allotment of shares to Marcegaglia Steel SpA.


27.


Controlling party

The immediate parent company is Marcegaglia Steel SpA through sole shareholding.
The ultimate controlling parties is A and E Marcegaglia who are shareholders of Marcegaglia Holding S.r.l., the ultimate parent undertaking.

 
- 36 -