ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
For the Year Ended
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AARTEE STEEL OPERATIONS LIMITED
Company Information
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AARTEE STEEL OPERATIONS LIMITED
Contents
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AARTEE STEEL OPERATIONS LIMITED
Strategic Report
For the Year Ended 31 December 2021
The directors present their strategic report together with the financial statements for the year ended 31 December 2021.
The principal activity of the company is that of an investment holding company. The company is dormant and has not traded during the current or prior year. The directors do not envisage this changing for the foreseeable future.
The company is a member of the wider Aartee Steel Holdings Limited Group and has no ongoing costs or trading activities. The directors are satisfied that it can meet its liabiltiies as they fall due for at least 12 months from the date of approval of the financial statements.
Details of the financial and non-financial risks and uncertainties are included within the consolidated financial statements of Aartee Steel Holdings Limited which are publically available.
Given the straight forward nature of the business, the company's directors are of the opinion that further analysis using KPI's is not necessary for an understanding of the development, performance or position of the business. Details of the key performance indicators is included within the consolidated financial statements of Aartee Steel Holdings Limited which are publically available.As a holding company, it is however noted that the main risk to the company is to the value of the investment as this relies on the performance of its owned and indirect subsidiaries and the risk being managed by continuously monitoring the underlying performance of these subsidiaries.
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AARTEE STEEL OPERATIONS LIMITED
Strategic Report (continued)
For the Year Ended 31 December 2021
The Directors of Aartee Steel Operations Limited considers both individually and as a whole, that they have acted in the way they consider, in good faith, would be the most likely to promote the success of the Company for the benefit of its members as a whole, having regard to matters set out in s172(1)(a-f) of the Companies Act 2006, in the decisions taken during the year ended 31 December 2020 . In particular:
1. Our group plans are designed to have a long-term beneficial effect on the company and to contribute to its success by delivering a better-quality bright bar and hot rolled product to customers in the UK, Europe and the Americas. We will continue operating our business under tight budgetary control and in line with regulatory guidelines. 2. Our group employees are fundamental to the delivery of our success. We aim to be a resonsible employer in our approach to pay and benefits our employees receive. The well-being, health and safety of our employees is one of our primary considerations in the way we do business. 3. Our aim is to provide high quality products to industrial end users who will in turn use them to manufacture key components for critical applications. We undergo several quality audits across our facilities with BSI to set a high standard of performance. We have made a commitment to share our productivity gains with our customers through better service. We also aim to act fairly with our suppliers, our leders, and cooperate with government institutions, all of which are integral to the success of the Aartee Bright Bar group. 4. Our plans consider the impact of the company's operations on the community and environment and our wider social responsibility. The group is aiming not only to comply with its own environmental policies, but to excel at that. We have pursued several accreditations that put us at the forefront of CSR regarding the environment. 5. As the Board of Directors our intention is to behave responsibly and ensure that management operate the business in a responsible manner, operating within the high standards of business and governance expected from a business like ours. We aim to nurture our reputation through the adherence to our principles and the wider expectations of the market. 6. As the Board of Directors, our intention is to behave responsibly towards our shareholders and treat them fairly so that they too might benefit from the success of the group.
This report was approved by the board on 14 April 2022 and signed on its behalf.
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AARTEE STEEL OPERATIONS LIMITED
Directors' Report
For the Year Ended 31 December 2021
The directors present their report and the financial statements for the year ended 31 December 2021.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙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 profit for the year, after taxation, amounted to £1 thousand (2020 - £NIL)
The company has not traded during the current or preceding financial year and accordingly no statement of comprehensive income has been prepared. Therefore no dividends have been paid or a recommended to be paid.
The directors who served during the year were:
The directors expect the company will remain dormant for the forseeable future.
The company have included details of engagement with suppliers, customers and others have been included in the Strategic Report using the provisions of section 414(c) of the Companies Act 2006.
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AARTEE STEEL OPERATIONS LIMITED
Directors' Report (continued)
For the Year Ended 31 December 2021
The company is not directly involved in any trading activity and uses no energy so no detailed disclosure in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower. Detailed disclosures are available within the subsidiary financial statements, which relate to their individual usage, where these companies are classified as 'large'.
There have been no significant events affecting the Company since the year end.
The auditors, PKF Smith Cooper Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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AARTEE STEEL OPERATIONS LIMITED
Independent Auditors' Report to the Members of Aartee Steel Operations Limited
We have audited the financial statements of Aartee Steel Operations Limited (the 'Company') for the year ended 31 December 2021, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, 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).
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 United Kingdom, including the Financial Reporting Council'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.
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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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AARTEE STEEL OPERATIONS LIMITED
Independent Auditors' Report to the Members of Aartee Steel Operations Limited (continued)
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.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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AARTEE STEEL OPERATIONS LIMITED
Independent Auditors' Report to the Members of Aartee Steel Operations Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. Based on our understanding of the Company and industry, we identify the key laws and regulations affecting the Company. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identified that the principal risk of fraud or noncompliance with laws and regulations related to: • management bias in respect of accounting estimates and judgements made; • management override of control; • posting of unusual journals or transactions We focussed on those area that could give rise to a material misstatement in the Company financial statements. Our procedures included, but were not limited to: • Enquiry of management and those charged with governance/review of correspondence around actual and potential litigation and claims, including instances of non-compliance with laws and regulations and fraud; • Reviewing minutes of meetings of those charged with governance where available; • Reviewing legal expenditure in the year to identify instances of non-compliance with laws and regulations and fraud/ and enquiries with third party advisors about potential claims • Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations. • Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias. It is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
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AARTEE STEEL OPERATIONS LIMITED
Independent Auditors' Report to the Members of Aartee Steel Operations Limited (continued)
for and on behalf of
Chartered Accountant
Statutory Auditors
St Helen's House
King Street
DE1 3EE
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AARTEE STEEL OPERATIONS LIMITED
Statement of Comprehensive Income
For the Year Ended 31 December 2021
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AARTEE STEEL OPERATIONS LIMITED
Registered number: 07459511
Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 12 to 19 form part of these financial statements.
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AARTEE STEEL OPERATIONS LIMITED
Statement of Changes in Equity
For the Year Ended 31 December 2021
Statement of Changes in Equity
For the Year Ended 31 December 2020
Page 11
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AARTEE STEEL OPERATIONS LIMITED
Notes to the Financial Statements
For the Year Ended 31 December 2021
Aartee Steel Operations Limited is a private company limited by shares, registered in England and Wales. The registration number is 07459511. The address of the registered office is Planetary Road, Willenhall, West Midlands, WV 13 3SW. The princial activity is that of an intermediate holding company.
2.Accounting policies
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).
The following principal accounting policies have been applied:
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 Aartee Steel Holdings Limited as at 31 December 2021 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
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AARTEE STEEL OPERATIONS LIMITED
Notes to the Financial Statements
For the Year Ended 31 December 2021
2.Accounting policies (continued)
The Directors believe that the Company's financial statements should be prepared on a going
concern basis and have considered a period in excess of twelve months from the date of approval of these financial statements. The effect of the restrictions due to Covid 19 have had a significant effect on the global economy and the supply chain in the steel industry. At the date of signing the consequences of the outbreak have subsided in large part due to the vaccine rollout. The Russian invasion of Ukraine has resulted in a sharp increase in energy and steel raw material prices with a cascade effect onto our products in the Aartee Steel Holdings Limited group. However, the Directors consider that the actions taken by the Company thus far, along with their purchasing and sales strategies, will continue to mitigate the associated risks from the pandemic and international conflict. The historic funder, RBS Invoice Finance Limited ("RBS"), manifested its intention to withdraw its support in 2020 and the facilities were gradually reduced to an IDF line of £6.5 million by December 2020. In May 2021 the Company secured a 3 year finance facility with FGI Worldwide LLC ("FGI"), at which point the RBS facility was closed. The FGI facility is a Receivables Purchase Agreement that provides up to £10m of funding against a proportion of eligible receivables, and which is secured over the net assets of the business. The facility is not subject to any financial nor non-financial covenants. The £1.5m intercompany loan was converted to equity by the group thus strengthening our balance sheet and showing the support and commitment to the business. At 31 December 2021 the company owed £1.7million to HMRC for deferred VAT, PAYE and NI creditors. In September 2021 the Company agreed a Time To Pay (TTP) payment plan to clear these liabilities over a 20 month period. Repayments have been made on time with any new tax liabilities arising also being paid on time. In March 2022 the Q1 2020 VAT liability was repaid in full per previous agreement. The directors have prepared a detailed profit and cash forecast for a period in excess of 12 months from the date of signing the financial statements. These show the main trade of the business and that the entity is able to operate with financial headroom. The directors have also considered alternative scenarios to stress test these forecasts and in particular have taken into account the increased steel prices subsequent to the year end. Notwithstanding the above, after reviewing the Company's forecasts and projections, the Directors have a reasonable expectation that, with the continued support of its lender, and its group the Company has adequate resources to continue in operational existence for the foreseeable future. As such the Company continues to adopt the going concern basis in preparing its financial statements.
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AARTEE STEEL OPERATIONS LIMITED
Notes to the Financial Statements
For the Year Ended 31 December 2021
2.Accounting policies (continued)
The estimates and associated assumptions are based on historic experiences and various other factors that are believed to be reasonable under the circumstances, the results of which from the basis of making the judgments about carrying values of assets and liabilities and are not readily apparent from other sources. Actual results may differ from these estimates. The judgments, estimates nd assumptions which have a significant risk of causing a material adjustment to the arrying amount of assets and liabilities are: Fixed assets investments Fixed asset investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. When a review for impairment is conducted the recoverable amount of the assets are based on the net present value of future cash flows expected to arise from the continuing operation of the assets using an appropriate discount rate.
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AARTEE STEEL OPERATIONS LIMITED
Notes to the Financial Statements
For the Year Ended 31 December 2021
The UK government announced on 3 March 2021 their intention to increase he corporation tax rate from 19% to 25% from April 2023.
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AARTEE STEEL OPERATIONS LIMITED
Notes to the Financial Statements
For the Year Ended 31 December 2021
Page 16
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AARTEE STEEL OPERATIONS LIMITED
Notes to the Financial Statements
For the Year Ended 31 December 2021
On 30 June 2021, the Company issued 1,500,000 £1 ordinary shares in exchange for the repayment of the £1,500,000 loan held with a related group company.
Share premium account
Profit and loss account
The company is party to a composite guarantee and debenture with its subsidiaries and its parent
undertakings.
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AARTEE STEEL OPERATIONS LIMITED
Notes to the Financial Statements
For the Year Ended 31 December 2021
At 31 December 2021 the immediate parent undertaking was
The ultimate controlling party of The smallest and largest group in which the results of the company are consolidated is that headed by
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AARTEE STEEL OPERATIONS LIMITED
Notes to the Financial Statements
For the Year Ended 31 December 2021
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