REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
VDL STEELWELD UK LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
VDL STEELWELD UK LIMITED |
VDL STEELWELD UK LIMITED |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 6 |
Report of the Independent Auditors | 8 |
Income Statement | 12 |
Other Comprehensive Income | 13 |
Balance Sheet | 14 |
Statement of Changes in Equity | 15 |
Notes to the Financial Statements | 16 |
Trading and Profit and Loss Account | 24 |
VDL STEELWELD UK LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 December 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants & Registered Auditors |
Lawford House |
4 Albert Place |
London |
N3 1QB |
VDL STEELWELD UK LIMITED |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
The directors present their strategic report for VDL Steelweld UK Limited for the period ended 31 December 2023. |
REVIEW OF BUSINESS |
The Directors report an increasingly bright outlook in the Automotive industry, mainly due to the required investment for electrification of vehicles by all the major manufacturers globally, reporting revenue of £24.6 million (2022: £11.7 million), which reflects our efforts to reinforce the position of VDL Steelweld as a quality supplier for the delivery of Innovative Automation solutions within the production automation segment. |
We remain focused mainly on the Automotive sector and our key customers amongst the global Automotive OEM's. |
2023 highlights include: |
The start of 2023 saw the complete Organisation engaged on completion of existing orderbook projects for our existing customer, Jaguar Landrover, within the production automation sector for the delivery of Automotive Production Systems. |
In late 2023 we successfully close Project 241 in Solihull. |
Throughout the entire period of 2023 we have successfully delivered a new Framing Line facility for Project 305 in Solihull. This line was running in full production mode prior to the end of the year, however due to changes requested by the customer we will continue with this project into 2024. |
The largest project under execution in 2023 was the Project 304 being delivered in the JLR Halewood facility which was originally awarded in mid-2022. This project will continue until mid 2025 before final handover to the customer will take place. |
Midway through 2023 we have started the integration for the 2nd new model (Project 306) into the JLR Halewood facility and this project will continue through to early 2026. |
In late 2023 we successfully close Project 241 in Solihull. |
New customer, McClaren onboarded in late 2023 where we were requested to deliver a small concept study for a new production process. |
Major success achieved December 2023 with a large new engineering order for the new Mini production planned to be delivered in the BMW plant in Oxford. |
We continue to see a positive trend in terms of new RFQs being received and therefore our Concepts and Proposal staff have been kept relatively busy. |
The outlook into 2024 is looking very positive due to the longevity of the current projects live on the order book and therefore carried forward into 2024 as well as the large new project awarded to us by BMW. With these orders secured the UK capacity for 2024 has been almost fully secured and also provides the opportunity for further investment in resources to align with our strategy of controlled growth. |
Despite this positivity in terms of order book and new opportunities our expectation is that we will remain in a very challenged industry and prices will remain a key factor when it comes to new business awards. |
VDL STEELWELD UK LIMITED |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
MISSION, VISION AND STRATEGY |
Mission |
To provide the development, production and integration of innovative products and solutions as well as to preserve and grow opportunities for employment. |
Vision |
To be the preferred supplier of choice for Production Systems, Special Products and AGV's and be renowned as a reliable and flexible partner. |
Strategy |
To strengthen our existing customer relationships and partnerships. |
To continue our controlled global expansion. |
To remain a project driven organisation dedicated to our customer's needs. |
PLANS FOR FUTURE PERIODS |
VDL Steelweld UK Limited is focused on the following for the future - |
Our future plans remain focused around continuing to consolidate our position as a leading supplier in Body in White Production Automation Systems and staying very close to our key customers.Due to the current healthy order project our primary focus will be upon the quality execution of our existing projects, whilst simultaneously keeping an active eye and engagement on innovation and new sales within the ever changing landscape being significantly challenged due to the electrification and environmental challenges being faced by Automotive OEMS. |
Our strategy remains to be a close partner to our key customers and securing continuous orders by providing on the doorstep services whenever and wherever our customers need them.However with the ever increasing focus on E-Mobility and the environmental impact of the automotive world, VDL Steelweld as a group is investing in the battery assembly space via a test project recently executed in The Netherlands and over the coming few years we intend to establish ourselves as a leading player in the field of Battery Automation systems.This should help to safeguard the workforce we have built up in the UK over the last decade and hopefully bring the potential for continued, controlled growth. |
Our focus will remain on our core competence of BIW automation systems within the UK market, but continued emphasis will be applied on our ability to support the other VDL Steelweld global offices, with a particular focus on supporting the operations established in the USA plus the expansion of our Engineering services and Manufacturing capabilities at our sister company in India. This will help us to offer a lower cost solution to our customers in an ever challenging price market. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The business undertook a level of debt in 2019 to finance a property acquisition and business growth. This loan is paid back to VDL Steelweld in the Netherlands in 2023. |
VDL STEELWELD UK LIMITED |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
PRICE RISK, CREDIT RISK, LIQUIDITY RISK AND CASH FLOW |
VDL Steelweld UK limited agrees with the main customer a contract in EURO. |
The business's principal financial instruments are comprised of bank balances, trade creditors, trade debtors and finance lease agreements (as relevant). The main purpose of these is to finance the continuing operations of the business. |
The company has an agreed inter-company debt of £ 8,736,269 which was renewed on 31.12.2023. |
Trade debtors are carefully managed in respect of credit and cash flow risk by policies that govern the facilities |
that are offered to customers and regular monitoring of the amounts due. The amounts presented in the balance |
sheet is net of allowances for doubtful debts. |
Trade creditor liquidity risk is carefully managed by regular planning and monitoring of payment obligations. |
In behalf of the transfer-price-policies, VDL Steelweld B.V. compensates the result before taxes to 6% over the cost of sales and de administrative expenses excluding these cost made at the Steelweld-group. |
GOING CONCERN |
While the company achieved its revenue growth and operating profit objectives, it made a profit after depreciation and loss on foreign exchange for the period of £1,267,963 (2022: £537,842). |
As disclosed above, this level of debt is dependent on the continued support of VDL Steelweld B.V. |
Following a review of forecasts undertaken which incorporate the continuation of the funding outlined above; at 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. |
Key performance indicators |
2023 | 2022 |
Turnover | 24,623,260 | 11,684,972 |
Gross profit (loss) before transfer price adjustment | 4,873,164 | (964,717) |
Transfer price adjustment | 3,310,040 | 621,362 |
Gross profit (loss) | 1,563,124 | (1,586,079) |
The company tracks sales in terms of orders received and shipments made monthly. Profit and loss performance are tracked by product and/or service type, to provide analysis of the revenue, material, direct and indirect costs by activity. |
Because of the project nature of the business, results are reviewed as a full trading quarter against the agreed budget. |
VDL STEELWELD UK LIMITED |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
OTHER INFORMATION AND EXPLANATIONS |
Policy on payments to suppliers |
It is the company's policy to agree terms and conditions for its business transactions with suppliers. The company seeks to comply by the payment terms agreed where it is satisfied that the supplier has provided the goods and services, in accordance with the agreed terms and conditions. |
Activities within the year |
The period 2023 has been a very busy time for VDL Steelweld UK having many major projects being delivered at various Jaguar Landrover sites. Based on this we continued to reinforce our workforce to support other engineering requirements across the organisation which has enabled us to support our project needs. |
We have concluded projects in Solihull and Halewood and with a variety of new orders and 2nd models being introduced into the already installed facilities we have remained almost fully loaded in terms of our capacity throughout 2023. Due to the fact that many of our projects have a long delivery timing of 2-3 years as a norm, we also have a bright outlook into 2024 and beyond. The nature of the orders we have received from JLR and BMW lay down a strong baseline of work coming out of 2023 and into 2024. |
This provides overall a healthy and stable outlook for the future of VDL Steelweld UK. |
We have also continued to support the VDL Steelweld group on Concepts and Proposals for new projects across the company and we have also dedicated a small number of employees from the UK to the Business Development team looking after our entry into the Battery Electric Vehicle space as we look to become a prominent player in the supply of Battery Assembly solutions. |
Other information and explanations |
The business has consolidated against its strategic plan and having been forced to make certain cutbacks during 2020/21, due to Covid 19, we are pleased to report that in 2023 we have continued to rebuild and strengthen our workforce with several new hires, based on the new project awards and generally positive expectations going forward. |
We have carried out some further restructuring across the VDL Steelweld group as we look to strengthen our financial position as well as invoking some strategical changes largely due to increasing demands on price level and costs. |
With an already healthy order book carried over from 2023 we expect a fairly bright 2024 which we hope will enable further potential for growth / rebuild, but primarily will provide stability throughout the coming year. |
Our principle market and continued sales focus will remain on securing work within the BIW Automotive Industry strengthening our position as a key supplier of Production Automation Systems. At the same time we continue to invest in our capability to deliver Battery Module assembly solutions as well as continuing to investigate potential from both inside and outside the VDL Group for diversification into other industries where our core skills can also be applied. |
The directors, investors and senior leadership team are encouraged with the progress that has been made in |
2023 that has achieved both solid results and high levels of customer satisfaction, which remains a core focus of our business. |
ON BEHALF OF THE BOARD: |
VDL STEELWELD UK LIMITED |
REPORT OF THE DIRECTORS |
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 production automation. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2023. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
RESULTS AND DIVIDENDS |
The profit for the year, after taxation, amounted to £956,838 (2022: £ 426,872) |
No ordinary dividends were paid. The directors do not recommend payment of a final dividend. |
MATTERS COVERED IN THE STRATEGIC REPORT |
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out 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 director 's report. It has done so in respect of business review, future developments, principal risks and uncertainties. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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: |
- | 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. |
VDL STEELWELD UK LIMITED |
REPORT OF THE DIRECTORS |
for the Year Ended 31 December 2023 |
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. |
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. |
AUDITORS |
The auditors, Sterlings Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
VDL STEELWELD UK LIMITED |
Opinion |
We have audited the financial statements of VDL Steelweld UK Limited (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, 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 included in the annual report other than the financial statements and our Report of the Auditors 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 or a material misstatement of other information. 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
VDL STEELWELD UK 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 Report of the Directors. |
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 Statement of Directors' Responsibilities set out on page six, 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
VDL STEELWELD UK LIMITED |
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 a Report of the Auditors 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: |
* The Senior Statutory Auditor ensured that the audit team collectively had the appropriate competence, skills, and capabilities to identify or recognise non-compliance with applicable laws and regulations; |
* We identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the relevant industry; |
* We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, and other legislation; |
* We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence where relevant; and |
* Identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
* Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
* Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls we: |
* Performed analytical procedures to identify any unusual or unexpected relationships; |
* Tested journal entries to identify unusual transactions; |
* Assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and |
* Investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
* Agreeing financial statement disclosures to underlying supporting documentation; |
* Reading the minutes of meetings of those charged with governance; |
* Enquiring of management as to actual and potential litigation and claims; and |
* Reviewing correspondence with HM Revenue & Customs and relevant regulators. |
There are inherent limitations in our audit procedures described above. The more remote that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
VDL STEELWELD UK LIMITED |
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 Report of the Auditors. |
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 a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants & Registered Auditors |
Lawford House |
4 Albert Place |
London |
N3 1QB |
VDL STEELWELD UK LIMITED |
INCOME STATEMENT |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER |
Cost of sales |
GROSS PROFIT/(LOSS) | ( |
) |
Administrative expenses |
(1,734,773 | ) | (4,003,103 | ) |
Other operating income |
OPERATING PROFIT | 5 |
Interest payable and similar expenses | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
VDL STEELWELD UK LIMITED |
OTHER COMPREHENSIVE INCOME |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
VDL STEELWELD UK LIMITED (REGISTERED NUMBER: 11354161) |
BALANCE SHEET |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 8 |
CURRENT ASSETS |
Debtors | 9 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 10 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 11 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 12 |
Retained earnings |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
VDL STEELWELD UK LIMITED |
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 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2023 |
VDL STEELWELD UK LIMITED |
NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
VDL Steelweld UK Limited is a private company limited by shares and is registered and incorporated in England and Wales (Company number: 11354161). |
The registered office is 8a & 8b Tournament Court, Tournament Fields, Edgehill Drive, Warwick, CV34 6LG. |
The company's principal activities and nature of its operations are disclosed in the Directors' Report. |
Monetary amounts in these financial statements are rounded to the nearest £1 . |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements have been prepared under the historic 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 Republic of Ireland and the Companies Act 2006. |
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (See Note 3) |
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. |
The company has therefore taken advantage of exemptions from the following disclosure requirements: |
- Section 4 'Statement of Financial Position' - Reconciliation of the opening and closing number of shares; |
- Section 33 'Related Party Disclosures'- Compensation for key management personnel. |
The following principal accounting policies have been applied: · |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows. |
Going concern |
At 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 . |
As the company operates under a transfer pricing arrangement with its parent company, VDL Steelweld BV, which ensure that the company will generate positive trading results, the profit and loss forecasts prepared indicate that the company has sufficient resources in place to enable it to continue trading for the foreseeable future. Additionally, the parent company has confirmed in writing that it will not seek repayment of the intercompany balance of £8,736,589 included in note 9, nor plan to cease operations in the UK for a period of at least 12 months from the date of signing these financial statements. |
Whilst some level of future uncertainty remains, the directors have taken into consideration the company's operating structure, profit and loss forecasts and the availability of the financial strength and cash availability of the wider VDL Group if required, consider the company is able to continue meeting its liabilities as they fall due in the foreseeable future which is considered to be a period of 12 months from the date of approving the financial statements. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements. |
VDL STEELWELD UK LIMITED |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Revenue from contracts |
Revenue from contracts 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: |
- the amount of revenue can be measured reliably; |
- it is probable that the Company will receive the consideration due under the contract; |
- the stage of completion of the contract at the end of the reporting period can be measured reliably; |
- the costs incurred and the costs to complete the contract can be measured reliably. |
The stage of completion is calculated by comparing costs incurred, mainly in relation to the contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that probably will be recovered. |
Other income |
Staff are recharged between the group dependent on the location of the assigned projects. Recharges are booked to recognise the appropriate level of work done for each entity. This is shown as an intercompany recharge within other income . |
Finance costs |
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument. |
Debtors |
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. |
Cash and cash equivalents |
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
Creditors |
Short term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. |
Provisions for liabilities |
Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation". |
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the 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. |
VDL STEELWELD UK LIMITED |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The Company only enters into basic financial instrument transactions that result in the recognition of |
financial assets and liabilities like trade and other debtors and creditors and loans from related parties. |
Equity instruments |
Equity instruments issued by the company are recorded at the fair value of 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. |
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. |
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. |
Tangible fixed assets |
Long leasehold | - |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
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 or deferred taxation assets and liabilities are not discounted. |
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 balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet 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. |
VDL STEELWELD UK LIMITED |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Foreign currencies |
Functional and presentation currency |
The Company's functional and presentational currency is GBP. |
Transactions and balances |
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. |
At each period end foreign currency monetary items are translated using the closing rate. Non |
monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. |
Foreign exchange gains and .losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. |
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within administrative expenses. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY ESTIMATES OF 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. |
The items in the financial statements where these judgements and estimates have been made include: |
Stage of completion of contracts for revenue recognition and valuation of WIP |
Although the stage of completion is calculated by comparing costs incurred, mainly in relation to the contractual hourly staff rates and materials, as a proportion of total costs, there is potential that this is not a fair representation of the stage of completion of the contract. |
In a case where the standard calculation is not appropriate, an estimate is made based on the probability of costs incurred being recovered. The assessment of this probability is a management judgement, which inherently includes a certain degree of uncertainty. |
VDL STEELWELD UK LIMITED |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Employees |
2023 | 2022 |
£ | £ |
Directors' remuneration |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery |
Depreciation - owned assets |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Auditors' remuneration |
Foreign exchange differences | ( |
) |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank loan interest |
Other Interest |
7. | 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 |
Prior Year Tax changes | (22,989 | ) | (519 | ) |
Total current tax |
Deferred tax | ( |
) |
Tax on profit |
VDL STEELWELD UK LIMITED |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
7. | TAXATION - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2022 - |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | - | ( |
) |
Depreciation in excess of capital allowances | - |
Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
Tax (decrease) increase from timing differences | (7,051 | ) | 9,340 |
Tax decrease arising from group relief | (19,373 | ) | - |
Total tax charge | 277,958 | 110,970 |
8. | TANGIBLE FIXED ASSETS |
Fixtures |
Long | Plant and | and | Motor |
leasehold | machinery | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
VDL STEELWELD UK LIMITED |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
9. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Amounts recoverable on long |
term contracts |
Other debtors |
VAT |
Prepayments and accrued income |
10. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Payments on account |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
VAT | - | 190,548 |
Other creditors |
11. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax |
Fixed Asset timing differences | 17,444 | 24,329 |
Short term timing differences | (3,516 | ) | (3,350 | ) |
13,928 | 20,979 |
Deferred |
tax |
£ |
Balance at 1 January 2023 |
Provided during year | ( |
) |
Balance at 31 December 2023 |
12. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 1,000 | 1,000 |
VDL STEELWELD UK LIMITED |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
13. | PENSION COMMITMENTS |
The total charge to profit or loss in respect of defined contribution schemes in the year is £86,434 (2022: |
£85,500). The amount outstanding at the year end totalled £14,063 ( 2022: £13,400 ) 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. |
14. | ULTIMATE PARENT COMPANY |
VDL Groep B.V (incorporated in Netherlands ) is regarded by the directors as being the company's ultimate parent company. |
The immediate parent company of the company is VDL Steelweld B.V. and the directors regard VDL Groep B.V., a company registered in the Netherlands, as the ultimate parent company. |
A copy of the consolidated financial statements of VDL Group B.V. can be obtained from VDL Groep B.V., Hoevenweg 1, 5652 AW, Eindhoven, Netherlands. |
The directors consider there to be one ultimate controlling individual, Mr WV Der Leegte. |
VDL Groep B.V. is the parent of the smallest and largest company in the group of which VDL Steelweld UK Limited is a member and for which group accounts are prepared. |
15. | RELATED PARTY DISCLOSURES |
In accordance with FRS102 Section 33 'Related Party Disclosures' the company has taken advantage of the exemption to not disclose transactions with the parent company or any wholly owned subsidiary undertaking of the group. |
VDL STEELWELD UK LIMITED |
TRADING AND PROFIT AND LOSS ACCOUNT |
for the Year Ended 31 December 2023 |
2023 | 2022 |
£ | £ | £ | £ |
Sales |
Cost of sales |
Purchases |
GROSS PROFIT/(LOSS) | ( |
) |
Other income |
Other Income |
4,585,634 | 2,955,279 |
Expenditure |
Rates and water |
Insurance |
Light and heat |
Repairs to property |
Directors' fees |
Wages |
Social security |
Pensions |
Hire of plant and machinery |
Other staff costs |
Telephone |
Post and stationery |
Travelling |
Motor expenses |
Cleaning |
Computer costs |
Protective clothing |
Training |
Sundry expenses |
Bank Charges |
Accountancy |
Consultancy Fees |
Subscriptions |
Legal fees |
Auditors' remuneration |
Foreign exchange differences | ( |
) |
Depreciation of tangible fixed assets |
Long leasehold |
Plant and machinery |
Fixtures and fittings |
Motor vehicles |
Profit/loss on sale of tangible fixed assets | ( |
) | ( |
) |
Other Interest |
3,297,897 | 2,417,024 |
Carried forward | 1,287,737 | 538,255 |
VDL STEELWELD UK LIMITED |
TRADING AND PROFIT AND LOSS ACCOUNT |
for the Year Ended 31 December 2023 |
2023 | 2022 |
£ | £ | £ | £ |
Brought forward | 1,287,737 | 538,255 |
Finance costs |
Bank loan interest |
Other Interest |
19,773 | 413 |
NET PROFIT |