Project Steel Midco 2 Limited
Registered number: 11727784
Annual report and audited financial statements
For the year ended 31 December 2023
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PROJECT STEEL MIDCO 2 LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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PROJECT STEEL MIDCO 2 LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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PROJECT STEEL MIDCO 2 LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their Strategic Report for the year ended 31 December 2023.
Principal activity and review of the business
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The principal activity of the Company is that of a holding company within the Group (Project Steel Topco Limited & its subsidiaries), owning 88% of Project Steel Bidco Limited. The principal activity of the trading subsidiary ("Utility Bidder") is to provide small and medium-sized enterprises ("SMEs") with comparison, switching and intermediary services for utilities and other services. Utility Bidder Limited is one of the leading providers and over the period has continued to grow successfully with more customers using the services.
Turnover predominantly represents amounts recharged to other group entities and expenses salary costs.
Principal risks & uncertainties
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As an intermediate holding company there are no principal risks or uncertainties other than the recoverability of amounts owed by group undertakings. The principal risks and uncertainties faced by the Group headed by Project Steel Topco Limited ("the Group") are outlined in the financial statements of Project Steel Topco Limited.
Financial key performance indicators
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As an intermediate holding company producing services to other group companies there are no financial key performance indicators utilised.
This report was approved by the board on 23 September 2024 and signed on its behalf.
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PROJECT STEEL MIDCO 2 LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
Directors' responsibilities statement
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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;
∙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 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.
The loss for the year, after taxation, amounted to £129,429 (2022 - profit £70,512).
The directors who served during the year were:
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PROJECT STEEL MIDCO 2 LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group, headed by Project Steel Topco Limited (the Group), manages its day to day working capital requirements and the levels of cash and cash equivalents, trade debtors and creditors. As set out in the Directors’ Report, the Group through 2023 has seen recoveries in overall trading as suppliers have returned with price books and improving contract terms.
The directors regularly prepare forecasts and mitigating actions that would be taken to help manage the Group's cash positions. The directors regularly prepare forecasts and projections seek to take account of ongoing changes in trading performance and working capital. These forecasts are then tested to assess the potential effects of suppliers changing price books, introducing shorter term contracts, or temporarily withdrawing price books or accelerating supplier consumption reconciliations or higher levels of clawbacks arising from the closure of customers' businesses. If one of these events was to take effect then the directors would implement changes within the business seeking to mitigate the impact of one or more of the above changes.
These forecasts show that the Group can continue to operate and after making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern in preparing its financial statements.
The Company itself has no significant external trading activity in the year other than salary costs which are recharged and this is expected to continue for at least twelve months from the sign off of the financial statements. The most significant liabilities falling due within one year are those owed to other group companies and the wider Group has confirmed support to the Company should it be required to meet liabilities as they fall due. On this basis the Company is not expected to have any unmet cash requirements for the foreseeable future and therefore the going concern basis remains appropriate.
Disclosure of information to auditor
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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 auditor is 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 auditor is aware of that information.
The auditor, Forvis Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 23 September 2024 and signed on its behalf.
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PROJECT STEEL MIDCO 2 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PROJECT STEEL MIDCO 2 LIMITED
Opinion
We have audited the financial statements of Project Steel Midco 2 Limited (the ‘Company’) for the year 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 loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’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.
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PROJECT STEEL MIDCO 2 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PROJECT STEEL MIDCO 2 LIMITED
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.
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PROJECT STEEL MIDCO 2 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PROJECT STEEL MIDCO 2 LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 2, 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 these 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: employment regulation, health and safety regulation, anti-money laundering 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.
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PROJECT STEEL MIDCO 2 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PROJECT STEEL MIDCO 2 LIMITED
In addition, we evaluated the directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of override of controls, and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to 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.
Neil Barton (Senior Statutory Auditor)
for and on behalf of
Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
One St. Peter's Square
Manchester
M2 3DE
23 September 2024
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PROJECT STEEL MIDCO 2 LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Exceptional administrative expenses
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(Loss)/profit for the financial year
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There are no items of other comprehensive income for 2023 or 2022 other than the (loss)/profit for the year. As a result, no separate Statement of Comprehensive Income has been presented.
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The notes on pages 11 to 21 form part of these financial statements.
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PROJECT STEEL MIDCO 2 LIMITED
REGISTERED NUMBER: 11727784
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 23 September 2024.
The notes on pages 11 to 21 form part of these financial statements.
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PROJECT STEEL MIDCO 2 LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Comprehensive income for the year
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Total comprehensive income for the year
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 11 to 21 form part of these financial statements.
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Project Steel Midco 2 Limited (‘the Company’) is a private company, limited by shares incorporated in the United Kingdom.
The address of its registered office and principal place of business is:
Corby Innovation Hub
Bangrave Road South
Corby
NN17 1NN
These financial statements have been presented in pounds sterling which is the functional currency of the company and rounded to the nearest £.
2.Accounting policies
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Basis of preparation of financial statements
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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
These financial statements have been presented in pound sterling which is the functional currency of the Company.
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:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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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 4 Statement of Financial Position paragraph 4.12(a)(iv);
∙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 11.41(b), 11.41(c), 11.41(e), 11.41(f), 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 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Project Steel Topco Limited as at 31 December 2023 and these financial statements may be obtained from Corby Innovation Hub, Bangrave Road South, Corby, England, NN17 1NN.
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Exemption from preparing consolidated financial statements
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The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
The Group, headed by Project Steel Topco Limited (the Group), manages its day to day working capital requirements and the levels of cash and cash equivalents, trade debtors and creditors. As set out in the Directors’ Report, the Group through 2023 has seen recoveries in overall trading as suppliers have returned with price books and improving contract terms.
The directors regularly prepare forecasts and mitigating actions that would be taken to help manage the Group's cash positions. The directors regularly prepare forecasts and projections seek to take account of ongoing changes in trading performance and working capital. These forecasts are then tested to assess the potential effects of suppliers changing price books, introducing shorter term contracts, or temporarily withdrawing price books or accelerating supplier consumption reconciliations or higher levels of clawbacks arising from the closure of customers' businesses. If one of these events was to take effect then the directors would implement changes within the business seeking to mitigate the impact of one or more of the above changes.
These forecasts show that the Group can continue to operate and after making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern in preparing its financial statements.
The Company itself has no significant external trading activity in the year other than salary costs which are recharged and this is expected to continue for at least twelve months from the sign off of the financial statements. The most significant liabilities falling due within one year are those owed to other group companies and the wider Group has confirmed support to the Company should it be required to meet liabilities as they fall due. On this basis the Company is not expected to have any unmet cash requirements for the foreseeable future and therefore the going concern basis remains appropriate.
Turnover 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. Revenue for the company represents the recharge of Group costs.
Finance costs are charged to the Statement of Comprehensive Income 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.
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
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Investments in subsidiaries
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Investments held as fixed assets are stated at cost less accumulated impairment losses.
The carrying value of fixed asset investments is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
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.
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Cash and cash equivalents
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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.
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.
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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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.
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In applying the Company’s accounting policies, the directors are required to make judgments, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgments, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgments, estimates and assumptions, the actual results and outcomes may differ.
As an intermediate holding company, there are not viewed as being any significant judgments or key sources of estimation uncertainty that are applicable other than assessing the recoverability of amounts owed by Group undertakings.
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All turnover arose within the United Kingdom.
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Fees in relation to services provided by the Company's auditors, for audit services, have been borne by Utility Bidder Limited, an indirect subsidiary of and on behalf of the Company.
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 2 directors (2022 - 2) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £212,499 (2022 - £193,500).
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The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £8,078 (2022 - £7,560).
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Professional fees related to a project undertaken during the year that was considered more non recurring in nature.
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Origination and reversal of timing differences
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Taxation on profit/(loss) on ordinary activities
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- 17 -
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
9.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:
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(Loss)/profit on ordinary activities before tax
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(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Remeasurement of deferred tax for changes in tax rates
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Movement in deferred tax not recognised
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Total tax charge for the year
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Factors that may affect future tax charges
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The rate of corporation tax in the United Kingdom has increased from 19% to 25%. Companies with profits of £50,000 or less will 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 will apply but with a marginal relief applying as profits increase.
- 18 -
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Investments in subsidiary companies
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The following was a subsidiary undertaking of the Company:
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Project Steel Bidco Limited
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Corby Innovation Hub, Bangrave Road South,Corby, NN17 1NN
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Utility Bidder Holdings Limited is a wholly owned subsidiary of Project Steel Bidco Limited, Utility Bidder Limited is a wholly owned subsidiary of Utility Bidder Holdings Limited. All of the companies are registered at Corby Innovation Hub, Bangrave Road South, Corby, NN17 1NN.
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
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- 19 -
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
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Allotted, called up and fully paid
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62,008 (2022 - 62,008) Ordinary shares of £0.01 each
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Share premium account
The share premium account comprises amount paid in excess of the nominal value of issued share capital.
Profit & loss account
The profit and loss account represent the cumulative profits and losses of the Company less dividends.
- 20 -
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PROJECT STEEL MIDCO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Related party transactions
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The Company is a wholly-owned subsidiary of Project Steel Topco Limited and as such has taken advantage of the exemption permitted by Section 33 Related Party Disclosures, not to provide disclosures of transactions entered into with other wholly-owned members of the Group.
During the year ended 31 December 2023, Utility Bidder Limited paid £Nil (2022: £96) in expenses on behalf of Project Steel Midco 2 Limited. Project Steel Midco 2 Limited received £Nil (2022: £Nil) in receipts on behalf of Utility Bidder Limited and a management charge received from Utility Bidder Limited totalling £855,544 (2022: £773,675). Utility Bidder Limited paid payroll costs and professional fees on behalf of Project Steel Midco 2 Limited totalling £791,809 (2022: £686,444).
Utility Bidder Limited received £Nil (2022: £Nil) of funds on behalf of Project Steel Midco 2 Limited.
At the Statement of Financial Position date, the Company is owed £398,858 (2022: £405,503) from Utility Bidder Limited. Utility Bidder Limited is a related party by virtue of holding 88% of the share capital in the Company.
At the Statement of Financial Position date, the Company is owed £16,465,875 (2022: £16,465,875) from Project Steel Bidco Limited. Project Steel Bidco Limited is a related party by virtue of holding 88% of the share capital in the Company.
A director of the Company is also a director of Walbrook Advisors Limited. During the year the Company paid Walbrook Advisors Limited consultancy fees totalling £28,500 (2022: £28,500). The balance owed at the year end to Walbrook Advisors Limited was £8,550 (2022: £8,550).
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The immediate parent and controlling party is Project Steel Midco 1 Limited, its registered office being Corby Innovation Hub, Bangrave Road South, Corby, England, NN17 1NN.
The ultimate parent is Project Steel Topco Limited, its registered office being Corby Innovation Hub, Bangrave Road South, Corby, England, NN17 1NN, and the ultimate controlling party is Sovereign Capital IV Limited Partnership, its registered office address being 25 Victoria Street, London SW1 0EX.
- 21 -
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