Company Registration No. 06582155 (England and Wales)
Steelstock Services (Midlands) Limited
Annual report and financial statements
for the year ended 31 December 2023
Steelstock Services (Midlands) Limited
Company information
Directors
Laurence McDougall
Mark Bradford
Matthew Rhodes
Kim McDougall
Company number
06582155
Registered office
Vulcan House
York Road
Thirsk
North Yorkshire
YO7 3BT
Independent auditor
Saffery LLP
10 Wellington Place
Leeds
LS1 4AP
Business address
Cable Street
Wolverhampton
West Midlands
WV2 2HX
Bankers
HSBC Bank plc
North & West Yorkshire Corporate Banking Centre
HSBC House
1 Bond Court
Leeds
LS1 2JZ
Steelstock Services (Midlands) Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
Steelstock Services (Midlands) Limited
Strategic report
For the year ended 31 December 2023
1

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

Review of the business

We aim to present a balanced review of the development and performance of the company during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business and mindful of the risks and uncertainties we face.

This business review has been prepared solely to provide information to shareholders as a body to assess the Company’s strategies and the potential for those strategies to succeed. The review should not be relied on by any other party or for any other purpose.

We consider that our key performance indicators are those demonstrating our financial performance and strength of the Company as a whole; being turnover and gross profit margin.

 

2023

2022

2021

 

000s

000s

000s

Turnover

12,087

16,795

15,257

Gross profit margin

11.44%

17.25%

21.27%

The above Gross Profit Margin percentages are calculated after charging processing costs but before transport costs.

Prices continued to fall across 2023 due to increasing interest rates contributing to reduced demand for large projects. The current year sees this price erosion persisting with many high profile failures in the construction sector adding to poor market sentiment further depressing prices in the current year. To protect against the threat of insolvency the company continues to insure its debts.

Given the support of the Company’s main creditor, All Steels Trading Ltd, the directors are confident the business remains a going concern.

The Company has continued its programme of investing in additional processing equipment and committed to installing further machinery in the current year. This will give the Company further capacity and capabilities to offer its customers.

The Company is committed to providing a safe working environment and has a focus on maintaining robust systems and documentation. The Company achieved ISO9001 accreditation in December 2021 as further evidence of this commitment.

Dividends totalling £Zero (2022 - £291,000) were paid during the year. The directors do not recommend payment of a final dividend.

HSBC continued to provide finance facilities throughout 2023 and facilities have been extended through 2024.

 

Principal risks and uncertainties

The principal risk for the Company is the fluctuating steel prices. To combat this the Company is on a stock reduction programme and using supplier links looking to conduct more business just in time.

Steelstock Services (Midlands) Limited
Strategic report (continued)
For the year ended 31 December 2023
2

On behalf of the board

Laurence McDougall
Director
18 October 2024
Steelstock Services (Midlands) Limited
Directors' report
For the year ended 31 December 2023
3

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

Principal activities
The principal activity of the company continued to be that of steel stockholders and processors.
Results and dividends

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

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

Directors

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

Laurence McDougall
Mark Bradford
Matthew Rhodes
Kim McDougall
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Strategic Report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the Directors' Report. It has done so in respect of future developments.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Laurence McDougall
Director
18 October 2024
Steelstock Services (Midlands) Limited
Directors' responsibilities statement
For the year ended 31 December 2023
4

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

 

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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

Steelstock Services (Midlands) Limited
Independent auditor's report
To the members of Steelstock Services (Midlands) Limited
5
Opinion

We have audited the financial statements of Steelstock Services (Midlands) 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, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Steelstock Services (Midlands) Limited
Independent auditor's report (continued)
To the members of Steelstock Services (Midlands) Limited
6

Opinions on other matters prescribed by the Companies Act 2006

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

 

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

Steelstock Services (Midlands) Limited
Independent auditor's report (continued)
To the members of Steelstock Services (Midlands) Limited
7

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. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

 

Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.

 

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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

Use of our report

This report is made solely to the company's 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.

Steelstock Services (Midlands) Limited
Independent auditor's report (continued)
To the members of Steelstock Services (Midlands) Limited
8
Martin Holden
Senior Statutory Auditor
For and on behalf of Saffery LLP
21 October 2024
Chartered Accountants
Statutory Auditors
10 Wellington Place
Leeds
LS1 4AP
Steelstock Services (Midlands) Limited
Statement of comprehensive income
For the year ended 31 December 2023
9
2023
2022
as restated
Notes
£
£
Turnover
3
12,087,000
16,795,132
Cost of sales
(10,703,637)
(13,897,729)
Gross profit
1,383,363
2,897,403
Distribution costs
(857,166)
(931,744)
Administrative expenses
(1,026,768)
(1,228,239)
Other operating income
-
0
5,506
Operating (loss)/profit
4
(500,571)
742,926
Interest payable and similar expenses
8
(60,325)
(42,772)
(Loss)/profit before taxation
(560,896)
700,154
Tax on (loss)/profit
9
138,898
(131,187)
(Loss)/profit for the financial year
(421,998)
568,967

The income statement has been prepared on the basis that all operations are continuing operations.

Steelstock Services (Midlands) Limited
Statement of financial position
As at 31 December 2023
10
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
628,193
795,012
Current assets
Stocks
12
2,415,251
3,839,774
Debtors
13
2,281,317
2,028,795
Cash at bank and in hand
6,005
4,391
4,702,573
5,872,960
Creditors: amounts falling due within one year
14
(4,808,064)
(5,780,682)
Net current (liabilities)/assets
(105,491)
92,278
Total assets less current liabilities
522,702
887,290
Provisions for liabilities
Deferred tax liability
16
57,410
195,155
465,292
1,487,290
Long term associated company loan
6
-
600,000
Called up share capital
18
50,000
50,000
Profit and loss reserves
415,292
837,290
Total equity
465,292
887,290
465,292
1,487,290
The financial statements were approved by the board of directors and authorised for issue on 18 October 2024 and are signed on its behalf by:
Laurence McDougall
Director
Company Registration No. 06582155
Steelstock Services (Midlands) Limited
Statement of changes in equity
For the year ended 31 December 2023
11
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
50,000
559,323
609,323
Year ended 31 December 2022:
Profit and total comprehensive income
-
568,967
568,967
Dividends
10
-
(291,000)
(291,000)
Balance at 31 December 2022
50,000
837,290
887,290
Year ended 31 December 2023:
Loss and total comprehensive income
-
(421,998)
(421,998)
Balance at 31 December 2023
50,000
415,292
465,292
Steelstock Services (Midlands) Limited
Statement of cash flows
For the year ended 31 December 2023
12
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
202,674
1,169,638
Interest paid
(60,325)
(42,772)
Income taxes paid
(92,821)
(68,452)
Net cash inflow from operating activities
49,528
1,058,414
Investing activities
Purchase of tangible fixed assets
-
0
(261,000)
Net cash used in investing activities
-
(261,000)
Financing activities
Repayment of bank loans
(49,740)
(379,703)
Dividends paid
-
0
(421,000)
Net cash used in financing activities
(49,740)
(800,703)
Net decrease in cash and cash equivalents
(212)
(3,289)
Cash and cash equivalents at beginning of year
(140)
3,150
Cash and cash equivalents at end of year
(355)
(140)
Relating to:
Cash at bank and in hand
6,005
4,391
Bank overdrafts included in creditors payable within one year
(6,360)
(4,531)
Steelstock Services (Midlands) Limited
Notes to the financial statements
For the year ended 31 December 2023
13
1
Accounting policies
Company information

Steelstock Services (Midlands) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Vulcan House, York Road, Thirsk, North Yorkshire, YO7 3BT.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

Despite the net current liabilities of £105,490 and loss after tax of £421,998 for the year ended 31 December 2023, based on current trading position and support of its main creditor, All Steels Trading Limited (connected through common majority ownership), which has confirmed that it will continue to support the Company and will not seek repayment of the balance owing to it for a period of at least 12 months from the approval of the financial statements, the directors are confident that the Company will remain a going concern. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

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

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

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings Leasehold
over the lease term
Plant and machinery
15% straight line
Fixtures, fittings & equipment
33% straight line
Motor vehicles
15% - 25% straight line
Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
14

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Land and Buildings represent improvements to Leasehold property.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to net realisable value.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's 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 debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
15
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

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

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including trade creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

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

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
16
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.14
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
17
1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Critical accounting judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Provisions

Provision is made for bad and doubtful debts and obsolete stock. These provisions require management's best estimate of the recoverability of trade debtors and the expected future use and net realisable value of stock.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Sale of goods
12,087,000
16,795,132
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
12,087,000
16,795,132
2023
2022
£
£
Other revenue
Grants received
-
5,506
Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
18
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(5,506)
Depreciation of owned tangible fixed assets
166,819
135,183
Operating lease charges
131,004
229,448
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
18,500
17,250
6
Employees

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

2023
2022
Number
Number
Directors
1
1
Employees
30
31
Total
31
32

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,103,059
1,151,444
Social security costs
108,424
120,782
Pension costs
24,367
25,336
1,235,850
1,297,562

Only one of the statutory directors receives remuneration through the company. The remaining three directors are remunerated through a related company.

Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
19
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
73,664
77,069
Company pension contributions to defined contribution schemes
1,321
1,321
74,985
78,390

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

 

8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on invoice finance arrangements
60,325
42,772
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
97,890
Adjustments in respect of prior periods
-
0
550
Total current tax
-
0
98,440
Deferred tax
Origination and reversal of timing differences
(138,898)
31,578
Adjustment in respect of prior periods
-
0
1,169
Total deferred tax
(138,898)
32,747
Total tax (credit)/charge
(138,898)
131,187
Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
9
Taxation (continued)
20

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(560,896)
700,154
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(131,923)
133,029
Tax effect of expenses that are not deductible in determining taxable profit
845
(10,040)
Adjustments in respect of prior years
1,156
-
0
Adjustments in respect of financial assets
276
-
0
Change in deferred tax rate
(8,220)
7,579
Prior year corporation tax
(1,032)
619
Taxation (credit)/charge for the year
(138,898)
131,187
10
Dividends
2023
2022
£
£
Interim paid
-
0
291,000
11
Tangible fixed assets
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023 and 31 December 2023
97,086
750,558
142,588
418,456
1,408,688
Depreciation and impairment
At 1 January 2023
96,484
252,128
142,241
122,823
613,676
Depreciation charged in the year
602
97,904
347
67,966
166,819
At 31 December 2023
97,086
350,032
142,588
190,789
780,495
Carrying amount
At 31 December 2023
-
0
400,526
-
0
227,667
628,193
At 31 December 2022
602
498,430
347
295,633
795,012

 

Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
21
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,415,251
3,839,774
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,130,671
2,062,177
Corporation tax recoverable
53
-
0
Prepayments and accrued income
150,593
161,773
2,281,317
2,223,950
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
1,074,450
1,122,361
Trade creditors
3,541,607
4,308,556
Corporation tax
-
0
93,921
Other taxation and social security
85,083
91,849
Accruals and deferred income
106,924
163,995
4,808,064
5,780,682

The bank borrowings are secured by debentures dated 2 August 2017 and 11 August 2017 containing a fixed charge over debtors and floating charge over all assets of the company. The company also has a charge over the legal assignment of contract monies dated 13 February 2018.

 

15
Loans and overdrafts
2023
2022
£
£
Invoice Finance Facility
1,068,090
1,117,830
Bank Overdraft
6,360
4,531
1,074,450
1,122,361
Payable within one year
1,074,450
1,122,361
Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
22
16
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
155,338
196,616
Tax losses
(96,450)
-
Short term timing differences
(1,478)
(1,461)
57,410
195,155
2023
Movements in the year:
£
Liability at 1 January 2023
195,155
Credit to profit or loss
(137,745)
Liability at 31 December 2023
57,410
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
24,367
25,336

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000
Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
23
19
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
172,023
180,610
Between two and five years
-
0
255,356
172,023
435,966
20
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Entities under common control
647,241
794,047
7,350,088
15,187,360

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Entities under common control
3,122,844
4,155,904

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities under common control
225,523
226,897
21
Directors' transactions

Dividends totalling £nil (2022 - £291,000) were paid in the year in respect of shares held by the company's directors.

22
Ultimate controlling party

The ultimate controlling party is Laurence McDougall by virtue of his 80% shareholding.

Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
24
23
Cash generated from operations
2023
2022
£
£
(Loss)/profit for the year after tax
(421,995)
568,967
Adjustments for:
Taxation (credited)/charged
(138,898)
131,187
Finance costs
60,325
42,772
Depreciation and impairment of tangible fixed assets
166,819
135,183
Movements in working capital:
Decrease/(increase) in stocks
1,424,523
(906,851)
(Increase)/decrease in debtors
(57,314)
177,402
(Decrease)/increase in creditors
(830,786)
1,020,978
Cash generated from operations
202,674
1,169,638
24
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
4,391
1,614
6,005
Bank overdraft
(4,531)
(1,829)
(6,360)
(140)
(215)
(355)
Invoice finance facility
(1,117,830)
49,740
(1,068,090)
(1,117,970)
49,525
(1,068,445)
25
Prior period adjustment
Reconciliation of changes in equity
The prior period adjustments do not give rise to any effect upon equity.
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Cost of sales
(335,522)
Distribution expenses
335,522
Total adjustments
-
Profit as previously reported
568,967
Profit as adjusted
568,967
Steelstock Services (Midlands) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
25
Prior period adjustment (continued)
25
Notes to reconciliation
Reallocation of expenditure

Prior year costs have been reallocated between Cost of Sales and Distribution expenses. This has not had an impact upon overall profit.

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