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Marcegaglia (UK) Limited
Registered number: 02677001
Annual report and financial statements
For the year ended 31 December 2024
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MARCEGAGLIA (UK) LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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MARCEGAGLIA (UK) LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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MARCEGAGLIA (UK) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their strategic report for the year ended 31 December 2024.
The Statement of Comprehensive Income is set out on page 12 and shows turnover for the year of £69.7m (2023: £81.1m), this is a 14.1% decrease in monetary terms based on the previous year's results.
UK market headlines
Similar to the year ended 31 December 2023, Marcegaglia UK experienced sharp steel price movements, both upward and downward during the year ended 31 December 2024, this coupled with demand volatility, resulted in another challenging year.
The main reasons for the significant steel price fluctuation seen during the year is the supply and demand effect caused by geopolitical situations and trade protectionism measures.
After Q1, Marcegaglia UK experienced very weak demand, which caused a steep downward trend in steel price. Tube stocks in the market remained high and unbalanced as buyers in the first half of the year ordered more than they needed because of the supply disruption, leaving them with high stocks at high prices with low market demand.
Results
Total volume decreased from 82,652 metric tons in 2023 to 77,025 Metric tons in 2024, a 6.8% decrease.
2024 Gross Margin has decreased compared to 2023: 4.6% on net sales compared to 6.5% last year.
In terms of EBITDA in 2024 it was negative of £5.3m, -7.6% on net sales from £1.6m, -2% in 2023, proving the difficulties the steel market has faced during 2024.
Investment
Total investment in fixed assets for 2024 was around £4.3m mainly related to the new premises in Oldbury, completing the installation of 3 HF tube production lines for stainless steel, and revamping the old carbon tube lines.
Future
2025, because of the global situation, Economists forecast a prolonged period of slow down.
Without a coherent industrial strategy or a renewed focus on innovation, the UK risks falling further behind its global peers. Geopolitical uncertainties, including global economic fragmentation and the ripple effects of conflicts like the war in Ukraine, add further vulnerabilities to an already fragile economy. The growing threat of additional protectionist measures by some of the UK’s major trading partners is adding to uncertainty about future demand for UK exports. Measures could include higher tariffs, which would raise the relative cost of UK goods abroad, and likely lead to a weakening of global demand – in particular the US and Donald Trump’s new administration.
Forecasts show real GDP growth slowing from 1% in 2024. This rate has been confirmed for 2025 and 1.2% in 2026.
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MARCEGAGLIA (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Principal risks and uncertainties
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The market for the production and distribution of Steel Tube is a competitive one, when competing with low cost steel imports. Our year on year growth in volume is a justification of the improvements in our product quality and service levels provided. We continually strive to improve, with our ultimate goal being to be the Number 1 preferred choice In the UK market as a Steel Tube supplier. The Company alms to build and maintain strong relationships by regularly visiting key customers and to fully understand their needs and resolve any issues as promptly and effectively as possible.
At this moment in time the market and the global situation are still uncertain.
There have been no further events since the balance sheet date which materially affect the position of the Company.
Credit risk
All trade is done on an insured basis where possible, and we aim to ensure that credit limits are enforced and that customers pay promptly, resolving issues that relate to discrepancies that may give rise to payment delays.
The Company's credit risk is primarily attributed to its trade debtors. Credit risk is managed by running pro·forma invoices on new customers and by monitoring payments against contractual agreements.
Cash flow
The Company monitors cash flow as part of its day to day control procedures. The Board considers cash flow projections on a monthly basis and ensures that appropriate facilities are available to be drawn upon as necessary.
Section 172 statement
The directors of Marcegaglia (UK) Limited consider both individually and collectively, that they have acted to promote the success of the Company for the benefit of its members as a whole with regard to the stakeholders and matters set out In s172 (1) (a f) of the UK's Companies Act 2006.
The directors fulfil their duties partly through a governance framework and delegate day to day decision making to the management team.
The directors carry out their work with skill and care and with their knowledge, qualifications and experience. They owe fiduciary duties to the Company, so always act within the Company's constitution and only exercise powers for a proper purpose, act in good faith to promote the success of the Company, exercise independent judgement and avoid conflicts of interest also not accepting benefits from third parties.
Decisions are made for the long term benefit of the Company and the business is operated within budgetary controls and in line with targets.
Employees are a fundamental part of the business and the health, safety and well being of each employee is of crucial interest of the Company. There is a responsible approach to the pay and benefits which the employees receive.
Relationships have been fostered with suppliers and customers to ensure business continuity and growth.
The Company considers the impact of its operations on the community environment.
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MARCEGAGLIA (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Financial key performance indicators
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The key financial performance indicators of the Company are as follows:
Financial key performance indicators
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Gross profit percentage to sales
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Return on capital employed
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This report was approved by the board on 24 September 2025 and signed on its behalf.
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MARCEGAGLIA (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Company is engaged in the manufacture of Electric Resistance Welded (ERW) Steel Tube. The Company supplies both the distributor network and end user customers in the UK, Ireland, Europe and other Non-EU countries.
In the last couple of years, the company has invested around £15m at the Oldbury site for further expansion to increase production capacity and continue to grow the business, not only for Carbon but also for Stainless Steel, as per the budget increasing year on year growth.
The loss for the year, after taxation, amounted to £7,666,108 (2023 - loss £3,530,906).
No dividends have been distributed for the year ended 31 December 2024 (2023: £Nil).
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MARCEGAGLIA (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors who served during the year were:
Going concern
The financial statements have been prepared on a going concern basis.
The current economic conditions present increased risks for all businesses. In response to such conditions, the directors have carefully considered these risks, including an assessment of uncertainty on future trading projections for a period of at least twelve months from the date of signing the financial statements, and the extent to which they might affect the preparation of the financial statements on a going concern basis.
Based on this assessment, the directors consider that the Company maintains an appropriate level of liquidity sufficient to meet the demands of the business.
Marcegaglia (UK) Limited obtains most of its raw materials from the international network and has been able to find sourcing solutions in both domestic and foreign markets. Consequently, the directors have a reasonable expectation that the Company has adequate resources (within Group) to continue in operational existence for the foreseeable future, and that there are no material uncertainties that lead to significant doubt regarding the Company's ability to continue as a going concern.
The company has UK facilities from HSBC UK that were renewed in December 2024. The facilities include £20 million letter of credit facility for raw materials purchasing and an invoice discount facility of £22.5 million. Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities and therefore have prepared the financial statements as a going concern.
Qualifying third party indemnity provisions
There was no qualifying third party indemnity provision in force at the time of the approval of the financial statements or during the period for the benefit of any of the directors.
We continue to maintain our status of being the UK leading Steel tube Manufacturer.
With our Dudley and Oldbury facilities up and running on a full shift basis based on, the actual lines, this has further significantly increased our production capacity.
We continue to increase our production output at the Oldbury site to further expand our production capabilities of the UK operation; to expand not only our range of carbon welded tubes but also through diversification of products.
Furthermore, at our Oldbury site we are also able to produce and supply Stainless Steel tubes.
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MARCEGAGLIA (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Engagement with suppliers, customers and others
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Delivering our strategy and achieving key goals relies on a strong mutually beneficial relationship with both customers and suppliers. These relationships have been developed over many years. Marcegaglia UK's success is very much dependant on the resilience of these relationships and provides for a solid foundation. The management regularly monitor its supply chain and the financial viability of customers.
Statement of Corporate governance arrangements
The directors of the Company delegate day to day management and decision making to the management team. The directors maintain an oversight of the Company's performance and ensure that management are acting in accordance with the strategy and plans agreed by them.
Streamlined energy and carbon reporting
The Company's greenhouse gas (GHGl) emissions and energy consumption was as follows:
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Purchase of electricity for own use
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Consumption of fuel for the purposes of transport
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Intensity ratio (kg CO2e per tonne produced)
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Purchase of electricity for own use
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Consumption of fuel for the purposes of transport
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Intensity ratio (kg CO2e per tonne produced)
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Reporting methodology
We have followed the UK Government environmental reporting guidance and also the GHG Protocol Value Chain (Scope 3) Standard.
The Company has taken positive steps to increase its energy efficiency including the replacement of water cooling towers and pumps, replacing office lighting with energy efficient LED and it’s looking to install solar PV systems and compressed air leak detection and remedy. These measures will not only be beneficial to the environment but should also result in improvements in process efficiency and reductions in operating costs.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
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MARCEGAGLIA (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The auditor, Forvis Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 24 September 2025 and signed on its behalf.
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MARCEGAGLIA (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MARCEGAGLIA (UK) LIMITED
Opinion
We have audited the financial statements of Marcegaglia (UK) Limited (the ‘Company’) for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the state of the Company’s affairs as at 31 December 2024 and of its loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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MARCEGAGLIA (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MARCEGAGLIA (UK) LIMITED
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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MARCEGAGLIA (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MARCEGAGLIA (UK) LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors intend either to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: Employment regulations, health and safety regulations and anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
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MARCEGAGLIA (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MARCEGAGLIA (UK) LIMITED
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to: posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition (which we pinpointed to the cut off assertion) and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of the audit report
This report is made solely to the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body for our audit work, for this report, or for the opinions we have formed.
Shaun Mullins (Senior Statutory Auditor)
for and on behalf of
Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
5th Floor
3 Wellington Place
Leeds
LS1 4AP
25 September 2025
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MARCEGAGLIA (UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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Interest receivable and similar income
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Interest payable and similar expenses
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Loss for the financial year
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Other comprehensive income for the year
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Revaluation of freehold property
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Income tax relating to other comprehensive income
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Other comprehensive income for the year
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Total comprehensive income for the year
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There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of comprehensive income.
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The notes on pages 16 to 34 form part of these financial statements.
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MARCEGAGLIA (UK) LIMITED
REGISTERED NUMBER: 02677001
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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MARCEGAGLIA (UK) LIMITED
REGISTERED NUMBER: 02677001
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 September 2025.
The notes on pages 16 - 34 form part of these financial statements.
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MARCEGAGLIA (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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Comprehensive income for the year
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Revaluation of freehold property
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Total comprehensive income for the year
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 16 to 34 form part of these financial statements.
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Marcegaglia (UK) Limited ("the Company") is a private limited company, limited by shares and registered in England & Wales, registration number 02677001.
The address of the registered office is New Road, Netherton, Dudley, West Midlands, DY2 8TA.
The principal activity of the Company is the manufacture and distribution of stainless steel products.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
These financial statements have been presented in pound sterling which is the functional currency of the Company, and rounded to the nearest £.
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Marcegaglia Holdings S.r.l. as at 31 December 2024 and these financial statements may be obtained from Via Bresciani, 16, 46040 Gazoldo lppoliti, Mantova, Italy.
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The financial statements have been prepared on a going concern basis.
The current economic conditions present increased risks for all businesses. In response to such conditions, the directors have carefully considered these risks, including an assessment of uncertainty on future trading projections for a period of at least twelve months from the date of signing the financial statements, and the extent to which they might affect the preparation of the financial statements on a going concern basis.
Based on this assessment, the directors consider that the Company maintains an appropriate level of liquidity sufficient to meet the demands of the business.
Marcegaglia (UK) Limited obtains most of its raw materials from the international network and has been able to find sourcing solutions in both domestic and foreign markets. Consequently, the directors have a reasonable expectation that the Company has adequate resources (within Group) to continue in operational existence for the foreseeable future, and that there are no material uncertainties that lead to significant doubt regarding the Company's ability to continue as a going concern.
The company has UK facilities from HSBC UK that were renewed in December 2024. The facilities include £20 million letter of credit facility for raw materials purchasing and an invoice discount facility of £22.5 million. Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities and therefore have prepared the financial statements as a going concern.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP, rounded to the nearest £1.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
- 17 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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Operating leases: the Company as lessee
|
Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Interest income is recognised in profit or loss using the effective interest method.
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.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
- 18 -
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|
MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
- 19 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
|
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following basis.
Depreciation is provided on the following basis:
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between 2% and 5% on cost
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between 10% and 25% on cost
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between 20% and 33% on cost
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Assets under construction
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Not depreciated until in use
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Assets under construction are not depreciated until they are complete and in use by the Company.
Investment property is carried at fair value determined annually by external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
- 20 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
- 21 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
- 22 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Judgements in applying accounting policies and key sources of estimation uncertainty
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Critical judgements in applying the Company's accounting policies
The critical judgements that the Directors have made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements:
(i) Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the Directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability and where applicable, the ability of the asset to be operated as planned. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
(i) Stock provisioning
The Company manufactures and sells Carbon and stainless steel and is subject to fluctuations in metal prices. As a result, it is necessary to consider recoverability of the cost of inventory and any associated provisioning. When calculating stock provisioning the directors have considered both internal and external sources of information including quantity of stock item held, current orders of the stock item, historic saleability of the stock item and wider market conditions.
The whole of the turnover is attributable to the principal activity of the Company.
Analysis of turnover by country of destination:
- 23 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The operating loss is stated after charging/(crediting):
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Loss/(profit) on disposal of fixed assets
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Cost of inventories recognised as an expense
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Other operating lease rentals
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During the year, the Company obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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Fees payable by the Company in respect of non-audit services:
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All non-audit services not included above
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- 24 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Directors' pension contributions to money purchase schemes
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Services provided by certain directors to Marcegaglia (UK) Limited are considered to be inconsequential to their wider role; those directors were remunerated by Group companies.
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- 25 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Interest receivable from group companies
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Interest received on corporation tax
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Other interest receivable - CID facility
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During the previous year the CID facility was in credit and therefore interest was paid to the Company.
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Interest payable and similar expenses
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Bank loan interest payable
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Loans from group undertakings
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Other interest payable - CID facility
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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- 26 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 25%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 25%)
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Expenses not deductible for tax purposes
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Adjustments to tax charge in respect of prior periods
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Other differences leading to an increase in the tax charge
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Total tax charge for the year
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Factors that may affect future tax charges
|
There were no factors that may affect future tax charges.
The Company is within the scope of the OECD Pillar Two model rules. Pillar Two legislation was enacted in England the jurisdiction in which the Company is incorporated and is effective for the accounting periods beginning after 31 December 2023.
An assessment of the Company’s potential exposure to Pillar Two income taxes has been performed. The Company applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to Section 29 issued in July 2023. The transitional safe harbour calculation based on country by country reporting has been performed and the Company satisfied the test. Therefore the Company is not expected to have to pay any top-up taxes under the enacted legislation.
There are £1,860,122 (2023: £222,995) of tax losses not recognised as a deferred tax asset at the year end.
- 27 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Assets under construction
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Transfer to investment property
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- 28 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
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Freehold investment property
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Transfer from tangible fixed assets
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The 2024 valuations were made by Lambert Smith Hampton, on an open market value for existing use basis.
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Raw materials and consumables
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There is no significant difference between the replacement cost of the inventory and its carrying amount.
The stock figure at the year end is shown after inventory provisions of £30,000 (2023: £30,000).
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- 29 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Amounts owed by group undertakings
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Prepayments and accrued income
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The amount recognised in the Statement of Comprehensive Income for the period in respect of bad and doubtful trade debts was £12,000 (2023: £3,000).
Amounts owed by group undertakings are unsecured and payable on demand and accrue interest at 6%.
Further information relating to the financial derivative can be seen in note 26.
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Included in other creditors is £3,920,840 (2023: £8,987,976) in respect of the invoice discounting facility with HSBC Bank plc which is secured against the trade debtors balances to which it relates. HSBC Bank, plc also has the first floating charge over the assets held by the company.
Amounts owed to group undertakings are unsecured, payable on demand and incur no interest.
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- 30 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
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Creditors: Amounts falling due after more than one year
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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HSBC Bank plc has provided a loan to the Company secured by a fixed charge over certain freehold property. The loan is repayable by 27 September 2027 and carries interest at 2% over the Bank of England base rate.
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- 31 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Financial assets measured at fair value through the Statement of Comprehensive Income
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Financial assets that are debt instruments measured at amortised cost
|
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Derivative financial instruments measured at fair value through profit or loss
|
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Financial liabilities measured at amortised cost
|
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Financial assets measured at fair value through the Statement of Comprehensive Income comprise cash at bank.
Financial assets that are debt instruments measured at amortised cost comprise trade debtors, amounts owed by group undertakings and other debtors.
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Derivative financial instruments measured at fair value through profit or loss held as part of a trading portfolio comprise forward contracts.
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Financial liabilities measured at amortised cost comprise bank overdrafts, bank loans, trade creditors, other creditors, invoice discounting, amounts owed to group undertakings and accruals and deferred income.
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The deferred tax position of £Nil (2023: £Nil) at the year end is a net position of a deferred tax liability on fixed asset differences of £2,706,214 (2023: £2,246,039) offset by a deferred tax asset on losses of £2,706,214 (2023: £2,246,039).
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- 32 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Allotted, called up and fully paid
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22,658,190 (2023 - 22,658,190) Ordinary shares of £1.00 each
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876,326 (2023 - 876,326) Non Voting B shares of £1.00 each
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The Ordinary shares carry full voting rights, full rights in respect of dividends and to participate in a distribution and full rights in respect of capital and to participate in a distribution including on a winding up. The shares are non-redeemable.
The Non-Voting B shares carry no voting rights, the right to receive notice of and attend a general meeting of the Company, full rights in respect of dividends and to participate in a distribution, full rights in respect of capital and to participate in a distribution including on winding up. The shares are non-redeemable.
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Share premium account
The share premium represents the amount above the nominal value received for issue share capital, less transaction costs.
Profit and loss account
The profit and loss account represents profits made by the Company less any dividends declared.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £264,754 (2023: £268,786). Contributions included in other creditors totalling £25,213 (2023: £23,864) were payable to the fund at the reporting date.
- 33 -
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MARCEGAGLIA (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
Commitments under operating leases
|
|
|
At 31 December 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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26.Other financial commitments
The Company enters into forward foreign currency contracts to mitigate the exchange rate risk for certain foreign currency payables. At 31 December 2024, the outstanding contracts all mature within 4 months of the year end. The Company is committed to buy 5.5m USD (2023: Nil) and pay a fixed sterling amount.
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Related party transactions
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The Company has taken advantage of the exemption available in Section 33 of FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" related party disclosures from the requirement to disclose transactions with wholly owned group companies.
Key management personnel includes all directors and a number of senior managers who together have authority and responsibility for planning, directing and controlling the activities of the Company. The total compensation paid to key management personnel for services provided to the Company was £452,004 (2023: £448,248).
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The immediate parent undertaking is Marcegaglia Carbon Steel SpA, a company incorporated in Italy. Marcegaglia Holdings S.r.l. is the ultimate parent undertaking and controlling company, a company incorporated in Italy.
The largest and smallest group in which the results of the Company are consolidated is that headed by Marcegaglia Holdings S.r.l. incorporated in Italy. The consolidated financial statements of this company are available to the public and may be obtained from Via Bresciani, 16, 46040 Gazoldo lppoliti, Mantova, Italy. No other group accounts include the results of the company.
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