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REGISTERED NUMBER: NI005683 (Northern Ireland)















SPERRIN METAL PRODUCTS LIMITED

Strategic Report, Directors' Report and

Financial Statements for the Year Ended 31 December 2023






SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)






Contents of the Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2023




Page

Company Information 1

Strategic Report 2

Directors' Report 3

Independent Auditors' Report 5

Income Statement 8

Statement of Financial Position 9

Statement of Changes in Equity 10

Notes to the Financial Statements 11


SPERRIN METAL PRODUCTS LIMITED

Company Information
FOR THE YEAR ENDED 31 DECEMBER 2023







DIRECTORS: Peter Gormley
Chris Devlin



REGISTERED OFFICE: Cahore Road,
Draperstown
Co. Londonderry
BT45 7AP



REGISTERED NUMBER: NI005683 (Northern Ireland)



INDEPENDENT AUDITORS: CavanaghKelly
Chartered Accountants and Statutory Auditors
36-38 Northland Row
Dungannon
Co. Tyrone
BT71 6AP



BANKERS: Danske Bank
North Business Centre
1-2 Broadway
Ballymena
Co. Antrim
BT43 7AA



SOLICITORS: Elliot Duffy Garrett
34 Upper Queen Street
Belfast
BT1 6FD

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Strategic Report
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Principal activities
The company's principal activities during the year were that of the manufacture, supply and installation of racking, shelving and related storage products.

REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS
The company reported a profit for the financial year of £2,398,642 (2022: £1,172,914). The directors consider the results of the financial year and the position of the company at the year end to be satisfactory. The company will continue to invest in people, product development and facilities to ensure its ongoing development and will continue to seek every opportunity to increase profitable turnover.

Key performance indicators
The company's key performance indicators are as follows:

2023 2022 2021
Net funds £5.71m £5.28m £2.78m
Gross profit margin 25.6% 15.9% 13.8%

PRINCIPAL RISKS AND UNCERTAINTIES
Business operations and execution of the company's strategic plan are subject to several risks and uncertainties:

Inflationary cost pressures: manufacturers continue to be exposed to pressures created by Brexit, rising energy costs, supply chain disruption and the war in Ukraine. The business remains vigilant to the potential headwinds experienced by all aspects of the project cycle and seeks to mitigate these risks through robust commercial and risk management, on-going dialogue with key stakeholders, including customers and supply chain.

Human resources: recruitment, retention and development of key employees is paramount in the current economic climate, and the business continues to invest in employment training and development, together with appropriate incentive and career progression arrangements.

ENVIRONMENT
The company recognises its corporate responsibility to carry out its operations whilst minimising environmental impacts. The directors' continued aim is to comply with all applicable environmental legislation, prevent pollution and reduce waste wherever possible.

HEALTH AND SAFETY
The company is committed to achieving the highest practicable standards in health and safety management and strives to make all sites and offices safe environments for employees and customers alike.

HUMAN RESOURCES
The company's most important resource is its people; their knowledge and experience is crucial to meeting customer requirements. Retention of key staff is crucial.

ON BEHALF OF THE BOARD:





Peter Gormley - Director


12 August 2024

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Directors' Report
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report with the financial statements of the Company for the year ended 31 December 2023.

PRINCIPAL ACTIVITY
The principal activity of the Company in the year under review was that of the manufacture, supply and installation of racking, shelving and related storage products.

DIVIDENDS
An interim dividend of £1,500,000 was paid during the year (2022: £500,000). The directors do not recommend payment of a final dividend (2022: £Nil).

DIRECTORS
Peter Gormley has held office during the whole of the period from 1 January 2023 to the date of this report.

Other changes in directors holding office are as follows:

Chris Devlin - appointed 3 January 2023

FINANCIAL RISK MANAGEMENT
The company's operations expose it to a variety of financial risks which include the effects of credit risk, foreign exchange risk and price risk. Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department.

CREDIT RISK
The company has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to individual customers is subject to a limit, which is reassessed regularly by management.

FOREIGN EXCHANGE RISK
While the greater part of the company's revenues and expenses are denominated in sterling, the company is exposed to some foreign exchange risk in the normal course of business, principally on payments received in Euro and US Dollar. While the company has not used financial instruments to date to hedge foreign exchange exposure, this position is kept constantly under review.

PRICE RISK
The company is exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.

RESEARCH AND DEVELOPMENT
The company is currently undertaking research and development projects covering new products and process improvement.

EMPLOYEES
Applications for employment by disabled persons are always fully considered, bearing in mind the respective aptitudes and abilities of the applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the company continues and the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of a disabled person should, as far as possible, be identical to that of a person who does not suffer from a disability.

Consultation with employees or their representatives has continued at all levels, with the aim of ensuring that their views are taken into account when decisions are made that are likely to affect their interests and that all employees are aware of the financial and economic performance of the company.

FUTURE DEVELOPMENTS
The section on future developments, which is detailed in the strategic report, is included in this report by cross reference.


SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Directors' Report
FOR THE YEAR 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

AUDITORS
The auditors, CavanaghKelly, have indicated their willingness to continue in office in accordance with the provision of Section 485 of the Companies Act 2006.

ON BEHALF OF THE BOARD:





Peter Gormley - Director


12 August 2024

Independent Auditors' Report to the Members of
Sperrin Metal Products Limited

Opinion
We have audited the financial statements of Sperrin Metal Products Limited (the 'Company') for the year ended 31 December 2023 which comprise the Income Statement, Statement of Financial Position, 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Auditors' Report thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

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

Independent Auditors' Report to the Members of
Sperrin Metal Products Limited


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

- We obtained understanding of the legal and regulatory requirements applicable to the company's financial statements and considered the most significant are the Companies Act 2006, Financial Reporting Standards (FRS102), Grant funding bodies regulation and UK taxation legislation;
- We have assessed the risk of material misstatement of the financial statements, including risk of material misstatement due to fraud and how it might occur by holding discussions with management and those charged with governance;
- We enquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations;
- Understanding the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; and
- Discussions amongst the audit engagement team regarding how fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion we identified the following potential areas where fraud may occur: timing of revenue recognition, recognition of grant income and management override.

The audit response to risks identified included:

- Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the relevant laws and regulations above;
- Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risk of material misstatement due to fraud;
- In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are reasonable and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

A further description of our responsibilities 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 Auditors' Report.

Independent Auditors' Report to the Members of
Sperrin Metal Products Limited


Use of our report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' 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.




Mr. Desmond Kelly (F.C.A) (Senior Statutory Auditor)
for and on behalf of CavanaghKelly
Chartered Accountants and Statutory Auditors
36-38 Northland Row
Dungannon
Co. Tyrone
BT71 6AP

12 August 2024

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Income Statement
FOR THE YEAR ENDED 31 DECEMBER 2023

2023 2022
Notes £ £

TURNOVER 5 16,707,283 16,283,539

Cost of sales (12,423,325 ) (13,694,812 )
GROSS PROFIT 4,283,958 2,588,727

Distribution costs (612,539 ) (637,083 )
Administrative expenses (586,709 ) (505,948 )
OPERATING PROFIT 7 3,084,710 1,445,696

Finance income 63,504 4,699
PROFIT BEFORE TAXATION 3,148,214 1,450,395

Tax on profit 8 (749,572 ) (277,481 )
PROFIT FOR THE FINANCIAL YEAR 2,398,642 1,172,914

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

2,398,642

1,172,914

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Statement of Financial Position
31 DECEMBER 2023

2023 2022
Notes £ £
NON-CURRENT ASSETS
Tangible assets 10 2,572,157 2,317,382

CURRENT ASSETS
Stocks 11 1,262,418 1,694,750
Receivables: amounts falling due within
one year

12

1,636,327

2,129,263
Cash at bank 5,707,858 5,287,459
8,606,603 9,111,472
PAYABLES
Amounts falling due within one year 13 (2,935,066 ) (4,347,071 )
NET CURRENT ASSETS 5,671,537 4,764,401
TOTAL ASSETS LESS CURRENT
LIABILITIES

8,243,694

7,081,783

PROVISIONS FOR LIABILITIES 14 (670,610 ) (386,466 )

GOVERNMENT GRANTS 15 (97,418 ) (118,293 )
NET ASSETS 7,475,666 6,577,024

CAPITAL AND RESERVES
Called up share capital 16 222,700 222,700
Retained earnings 7,252,966 6,354,324
SHAREHOLDERS' FUNDS 7,475,666 6,577,024

The financial statements were approved by the Board of Directors and authorised for issue on 12 August 2024 and were signed on its behalf by:





Peter Gormley - Director


SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Statement of Changes in Equity
FOR THE YEAR ENDED 31 DECEMBER 2023

Called up
share Retained Total
capital earnings equity
£ £ £
Balance at 1 January 2022 222,700 5,681,410 5,904,110

Changes in equity
Dividends - (500,000 ) (500,000 )
Total comprehensive income - 1,172,914 1,172,914
Balance at 31 December 2022 222,700 6,354,324 6,577,024

Changes in equity
Dividends - (1,500,000 ) (1,500,000 )
Total comprehensive income - 2,398,642 2,398,642
Balance at 31 December 2023 222,700 7,252,966 7,475,666

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2023

1. STATUTORY INFORMATION

Sperrin Metal Products Limited is a private company, limited by shares, registered in Northern Ireland. The company's registered number and registered office address can be found on the Company Information page. The principal activity of the company during the year was that of manufacture, supply and installation of racking, shelving and related storage products

2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3. ACCOUNTING POLICIES

Basis of preparing the financial statements
The financial statements have been prepared on a going concern basis under the historical cost convention. The policies detailed below have been applied to all the year, presented unless otherwise stated.

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. These are outlined in note 4 to the financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions
FRS 102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions.

The company has taken advantage of the following exemptions:

• from preparing a Statement of cash flows on the basis that it is a qualifying entity; its cash flows is included in the cash flows and profit and loss in the consolidated financial statements;

• from the financial instrument disclosures, required under FRS 102 paragraphs 11.41(b) to 11.48(c) and 12.26 to 12.29, as the information is provided in the consolidated statement disclosure; and

• from disclosing the company’s key management personnel compensation as required by FRS 102 paragraph 33.7.

Revenue
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. Turnover 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 turnover is recognised:

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

Rendering of services
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
i) the amount of turnover can be measured reliably;
ii) it is probable that the company will receive the consideration due under the contract;
iii) the stage of completion of the contract at the end of the reporting period can be measured
reliably; and
iv) the costs incurred and the costs to complete the contract can be measured reliably.

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

3. ACCOUNTING POLICIES - continued

Property, plant and equipment
Property, Plant and Equipment 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.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the Statement of income and retained earnings during the period in which they are incurred.

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. The estimated useful lives range as follows:

Depreciation is provided on the following bases:

Freehold buildings- 2% straight line
Plant and machinery- 15% reducing balance
Motor vehicles- 25% straight line
Canteen and office equipment- 25% straight line

Freehold land is not depreciated.

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 within the Statement of income and retained earnings.

Inventories
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.

At each Balance sheet 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 the Income Statement.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

3. ACCOUNTING POLICIES - continued

Foreign currencies
(i) Functional and presentation currency

The company's functional and presentational currency is GBP.

(ii) 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 the Statement of income and retained earnings except when deferred in other comprehensive income as qualifying cash flow hedges.

Employee benefits
The company operates a range of benefits to employees, including paid holiday arrangements and a defined contribution plan.

(i) Short term benefits

Short term benefits, including holiday pay and other similar non-monetary benefits are recognised as an expense, in the period in which the service is receivable.

(ii) Defined contribution plan

The company operated 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 obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.

Debtors
Debtors are stated after all known bad debts have been written off. Specific provision has been made against all debts considered doubtful of collection.

Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with bank and bank overdrafts.

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

3. ACCOUNTING POLICIES - continued

Interest income
Interest income is recognised in the Statement of income and retained earnings using the effective interest method.

Finance costs
Finance costs are charged to the Statement of income and retained earnings 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.

Borrowing costs
All borrowing costs are recognised in the Statement of income and retained earnings in the period in which they are incurred.

Financial instruments
The company have chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances and amounts owed by related parties are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the income statement.

If there is decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the income statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables, bank loans and overdrafts and amounts owed to related parties are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.


SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

3. ACCOUNTING POLICIES - continued
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

(iii) Offsetting

Financial assets and liabilities are offset and 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.

Dividends and distribution to equity holders
Dividends and other distributions to the company's shareholders are recognised as a liability in the financial period in which the dividends and other distributions are approved by the company's shareholders.

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 the Statement of income and retained earnings in the year that the company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet 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 Balance sheet.

Government grants
Grants that relate to specific capital expenditure are treated as deferred income and credited to the Statement of income and retained earnings over the related asset's useful economic life. Grants that relate to revenue expenditure are credited to the Statement of income and retained earnings over the period that the revenue expenditure relates to.

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.

Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Judgements In applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(a) Critical judgements in applying the entity's accounting policies

There are no critical judgements in applying the entity's accounting policies.

(b) Key accounting estimates and assumptions

Warranty Provision
The Company offers a warranty for any goods sold. Provision is made for potential claims under warranty for goods which have a default. Management review the level of sales and the number of warranty claims made on a regular basis in order to calculate the provision for future claims for goods sold.

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

5. TURNOVER

All turnover is derived from the company's principal activities. No analysis of turnover is presented as the directors consider disclosure to be seriously prejudicial to the interests of the company.

6. EMPLOYEES AND DIRECTORS

Staff costs, including directors' remuneration, were as follows:
20232022
£   £   
Wages and salaries2,337,3962,229,880
Social security costs200,624203,912
Other pension costs118,25589,382
2,656,2752,523,174

The average number of employees during the year was as follows:


2023

202
2
Production6870
Selling and Distribution108
Administration96
8784


During the year, retirement benefits were accruing to 2 directors (2022: 1) in respect of defined benefit pension schemes. The directors of the company are considered to be key management.

2023 2022
£    £   
Directors' remuneration 270,753 147,335
Pension costs 11,630 13,208
282,383 160,563

Information regarding the highest paid director for the year end 31 December 2023 is as follows:
2023 2022
£    £   
Wages and salaries 187,023 147,335
187,023 147,335

7. OPERATING PROFIT

The operating profit is stated after charging/(crediting):
20232022
£   £   
Depreciation of tangible assets331,591293,130
Fees payable to the company's auditors for the audit of the
company's annual financial statements

14,600


13,900
Deferred capital grants released(20,875)(20,875)
Profit on disposal of tangible assets(20,841)(8,500)

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

8. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
£ £
Current tax:
UK corporation tax 667,678 269,483
Under provision of tax in
prior period (268 ) -
Total current tax 667,410 269,483

Deferred tax 82,162 7,998
Tax on profit 749,572 277,481

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£ £
Profit before tax 3,148,214 1,450,395
Profit multiplied by the standard rate of corporation tax in the UK
of 23.521% (2022 - 19%)

740,491

275,575

Effects of:
Expenses not deductible for tax purposes - (1,235 )
Income not taxable for tax purposes 336 2,508
Capital allowances in excess of depreciation - (1,298 )
Adjustments to tax charge in respect of previous periods (268 ) 1,931

Non-relevant depreciation 10,355 -
Impact of super-deduction (6,408 ) -
Impact of rate change 5,066 -
Total tax charge 749,572 277,481

9. DIVIDENDS
2023 2022
£ £
Ordinary shares shares of 1 each
Interim 1,500,000 500,000

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

10. PROPERTY, PLANT AND EQUIPMENT
Freehold Plant and Motor Computer
property machinery vehicles equipment Totals
£ £ £ £ £
COST
At 1 January 2023 2,190,456 5,011,910 335,384 614,909 8,152,659
Additions 10,800 473,511 64,500 47,714 596,525
Disposals - - (73,633 ) - (73,633 )
At 31 December 2023 2,201,256 5,485,421 326,251 662,623 8,675,551
DEPRECIATION
At 1 January 2023 977,333 4,047,893 220,447 589,604 5,835,277
Charge for year 44,025 215,632 51,052 20,882 331,591
Eliminated on disposal - - (63,474 ) - (63,474 )
At 31 December 2023 1,021,358 4,263,525 208,025 610,486 6,103,394
NET BOOK VALUE
At 31 December 2023 1,179,898 1,221,896 118,226 52,137 2,572,157
At 31 December 2022 1,213,123 964,017 114,937 25,305 2,317,382

11. STOCKS
2023 2022
£ £
Raw materials 400,971 599,838
Work-in-progress 861,447 1,094,912
1,262,418 1,694,750

There are no significant differences between the replacement cost of raw materials and consumables and WIP and goods for resale.

12. RECEIVABLES: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£ £
Trade receivables 1,423,922 1,953,951
Other receivables 103,891 92,680
Prepayments and accrued income 108,514 82,632
1,636,327 2,129,263

13. PAYABLES: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£ £
Trade payables 1,799,958 2,756,635
Corporation tax 501,822 271,414
Social security and other taxes 72,622 71,505
Other payables 73,441 73,054
Accruals and deferred income 487,223 1,174,463
2,935,066 4,347,071

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

14. PROVISIONS FOR LIABILITIES
2023 2022
£ £
Deferred tax 304,030 221,868
Warranty provision 366,580 164,598
670,610 386,466

Deferred Warranty
tax provision
£ £
Balance at 1 January 2023 221,868 164,598
Provided during year 82,162 201,982
Balance at 31 December 2023 304,030 366,580

The company offers a warranty for any goods sold. Provision is made for potential claims under warranty for goods which have a default. Management review the level of sales and the number of warranty claims made on a regular basis in order to calculate the provision for future claims for goods sold. Deferred tax is in relation to accelerated capital allowances.

15. GOVERNMENT GRANTS
2023 2022
£ £
Deferred government grants 97,418 118,293

16. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £ £
222,700 Ordinary shares 1 222,700 222,700

17. CONTINGENT LIABILITIES

There is a contingent liability to repay certain government grants received under the terms of letters of offer from Invest Northern Ireland if the company fails to achieve and maintain specified employment levels. In the opinion of the directors the terms of the letters of offer have been complied with and no loss is expected.

18. CAPITAL COMMITMENTS

At 31 December 2023, the company had capital commitments of £Nil (2022: £30,992).

19. PENSION COMMITMENTS

The company operates a defined contribution scheme for certain directors and employees. The pension charge represents the contributions paid by the company to the scheme and amounts to £118,255 (2022: £89,382). The outstanding liability at year end amounts to £23,496 (2022: £13,754).

20. RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

SPERRIN METAL PRODUCTS LIMITED (REGISTERED NUMBER: NI005683)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

21. ULTIMATE CONTROLLING PARTY

The directors regard Sperrin Holdings Limited, which is registered in Northern Ireland, to be the company's ultimate controlling party. According to the register kept by the company, Sperrin Holdings Limited had a 100% interest in the equity capital of Sperrin Metal Products Limited at 31 December 2023.

The smallest and largest undertaking of which the company is a member and for which group financial statements are prepared, is Sperrin Holdings Limited, a company incorporated in Northern Ireland. Group financial statements for this company are prepared and are available to the public from the company secretary at Sperrin Holdings Limited, Cahore Road, Draperstown, County Londonderry, BT45 7AP.