Bright Steels Limited - Period Ending 2016-12-31

Bright Steels Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2016

Farrar Smith
Chartered Accountants & Statutory Auditors
2 Woodside Mews
Clayton Wood Close
Leeds
West Yorkshire
LS16 6QE

Bright Steels Limited

Contents

Company Information	1
Strategic Report	2 to 3
Directors' Report	4
Statement of Directors' Responsibilities	5
Independent Auditor's Report	6 to 7
Profit and Loss Account	8
Statement of Comprehensive Income	9
Balance Sheet	10
Statement of Changes in Equity	11
Statement of Cash Flows	12
Notes to the Financial Statements	13 to 21

Bright Steels Limited

Company Information

Directors

Mr L.P. Chouler

Mrs M.R.C. Pratt

Company secretary

Mr L.P. Chouler

Registered office

Norton Works
Norton
Malton
NORTH YORKSHIRE
YO17 9BD

Auditors

Farrar Smith
Chartered Accountants & Statutory Auditors
2 Woodside Mews
Clayton Wood Close
Leeds
West Yorkshire
LS16 6QE

Page 1

Bright Steels Limited

Strategic Report for the Year Ended 31 December 2016

The directors present their strategic report for the year ended 31 December 2016.

Principal activity

The principal activity of the company is the production, stockholding and sale of bright drawn steel bar, including some re-selling of merchanted bright steel bar and hire-drawing of customer supplied material.

Fair review of the business

We consider that the key performance indicators of the company are those that convey performance and strength in financial terms: turnover, operating profit and profit before tax, and net current assets and associated ratios.

2016 being the year of Brexit took the £ sterling to levels that the company had not predicted. The underlying effect on our figures being commitment to sell US and Canadian dollars at significant adverse rates meant that we post a loss on foreign exchange for the year, when free to trade at spot would have yielded significant gain. Turnover is down 2.5%, but actual despatches of product 1.2% up indicates price moves lower over 2015.

Annualised gross margin showed a healthy increase of 2.19%

Increased distribution and administrative expenses contributed to a year on year reduction in net profit of 13.9% to £441,156

Principal risks and uncertainties

The management of the business and the nature of the market area where the company operates are subject to a number of risks.

The directors are of the opinion that a thorough risk management process is in place which involves the formal review of the risks identified.

Financial risk management
The company's operations expose it to a variety of financial business risks including the effects of changes in interest rates, foreign currency exchange rates, credit risk and liquidity risk, which are offset by a robust system of company research and analysis, credit insurance and foreign exchange facility.

The company does at times have material exposures in these areas identified above and, consequently uses derivative instruments to manage these exposures.

The directors believe that the company is well placed to manage its business risk successfully despite the current uncertain economic outlook.

Page 2

Bright Steels Limited

Strategic Report for the Year Ended 31 December 2016

The main risks arising from the company's financial instruments can be analysed as follows:

Foreign currency risk
The company is exposed in its trading operations to the risk of changes in foreign currency exchange rates. As the company buys and sells goods in foreign currencies the overall risk is minimised and controlled by the use of the derivative instruments mentioned above. The main foreign currencies in which the company operates are the Euro, the US dollar and the Canadian dollar.

Credit risk
The company's principal financial assets are bank balances, cash, and trade debtors, which represent the company's maximum exposure to credit risk in relation financial assets.

The company's credit risk is primarily attributable to it's trade debtors. Credit risk is managed by monitoring the aggregate amount and duration of exposure to any one customer depending upon their credit rating plus credit insurance. The amounts presented in the balance sheet are net of doubtful debts, estimated by the company's management based on prior experience and their assessment of the current economic environment.

The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit ratings agencies. The company has no significant concentration of credit risk, with exposure spread over a number of counterparties and customers.

Approved by the Board on 13 September 2017 and signed on its behalf by:

.........................................
Mr L.P. Chouler
Company secretary and director

Page 3

Bright Steels Limited

Directors' Report for the Year Ended 31 December 2016

The directors present their report and the financial statements for the year ended 31 December 2016.

Directors of the company

The directors who held office during the year were as follows:

Mr L.P. Chouler - Company secretary and director

Mrs A.E. Chouler (resigned 3 February 2017)

Mrs M.R.C. Pratt

Future developments

There are no future developments which have been identified which will have a significant impact on the company.

Matters covered in the strategic report
Certain information has not been included in the directors' report because it has been included in the strategic report instead under s.414c(11). The information shown in the strategic report relates to the business review, principal risks and uncertainties and key performance indicators.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Farrar Smith as auditors of the company is to be proposed at the forthcoming Annual General Meeting.

Approved by the Board on 13 September 2017 and signed on its behalf by:

.........................................
Mr L.P. Chouler
Company secretary and director

Page 4

Bright Steels Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•	select suitable accounting policies and 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 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.

Page 5

Bright Steels Limited

Independent Auditor's Report to the Members of Bright Steels Limited

We have audited the financial statements of Bright Steels Limited for the year ended 31 December 2016, set out on pages 8 to 21. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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.

Respective responsibilities of directors and auditor

As explained more fully in the Statement of Directors' Responsibilities (set out on page 5), the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors to the financial statements.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on the financial statements

In our opinion the financial statements:

•	give a true and fair view of the state of the company's affairs as at 31 December 2016 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.

Page 6

Bright Steels Limited

Independent Auditor's Report to the Members of Bright Steels Limited

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•	the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

In the light of our 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 and the Directors' Report.

Matters on which we are required to report by exception

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.

......................................
Julie Konczyk ACA FCCA (Senior Statutory Auditor)
For and on behalf of Farrar Smith
Chartered Accountants & Statutory Auditor
2 Woodside Mews
Clayton Wood Close
Leeds
West Yorkshire
LS16 6QE

13 September 2017

Page 7

Bright Steels Limited

Profit and Loss Account for the Year Ended 31 December 2016

	Note	Total 31 December 2016 £	Total 31 December 2015 £
Turnover	3	13,224,353	13,575,874
Cost of sales		(9,463,990)	(10,012,510)
Gross profit		3,760,363	3,563,364
Distribution costs		(1,535,324)	(1,478,599)
Administrative expenses		(1,881,277)	(1,827,778)
Other operating income	4	112,110	115,958
Operating profit	6	455,872	372,945
Other interest receivable and similar income	7	4,386	7,633
Interest payable and similar expenses	8	(19,102)	131,933
		(14,716)	139,566
Profit before tax		441,156	512,511
Taxation	12	(99,401)	(38,331)
Profit for the financial year		341,755	474,180

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

The notes on pages 13 to 21 form an integral part of these financial statements.

Page 8

Bright Steels Limited

Statement of Comprehensive Income for the Year Ended 31 December 2016

	Note	2016 £	2015 £
Profit for the year		341,755	474,180
Total comprehensive income for the year		341,755	474,180

The notes on pages 13 to 21 form an integral part of these financial statements.

Page 9

Bright Steels Limited

(Registration number: 00159061)
Balance Sheet as at 31 December 2016

	Note	2016 £	2015 £
Fixed assets
Tangible assets	13	1,912,157	1,720,615
Investment property	14	1,681,000	1,635,000
Other financial assets	15	121,424	121,424
		3,714,581	3,477,039
Current assets
Stocks	16	4,294,883	4,390,214
Debtors	17	2,936,373	2,684,054
Cash at bank and in hand		2,265,669	1,652,252
		9,496,925	8,726,520
Creditors: Amounts falling due within one year	19	(2,368,648)	(1,371,603)
Net current assets		7,128,277	7,354,917
Total assets less current liabilities		10,842,858	10,831,956
Provisions for liabilities	20	(429,861)	(400,376)
Net assets		10,412,997	10,431,580
Capital and reserves
Called up share capital	22	20,025	20,025
Capital redemption reserve	23	3,975	3,975
Profit and loss account	23	10,388,997	10,407,580
Total equity		10,412,997	10,431,580

Approved and authorised by the Board on 13 September 2017 and signed on its behalf by:

.........................................

Mr L.P. Chouler

Company secretary and director

The notes on pages 13 to 21 form an integral part of these financial statements.

Page 10

Bright Steels Limited

Statement of Changes in Equity for the Year Ended 31 December 2016

	Share capital £	Capital redemption reserve £	Profit and loss account £	Total £
At 1 January 2016	20,025	3,975	10,407,580	10,431,580
Profit for the year	-	-	341,755	341,755
Total comprehensive income	-	-	341,755	341,755
Dividends	-	-	(360,338)	(360,338)
At 31 December 2016	20,025	3,975	10,388,997	10,412,997

	Share capital £	Capital redemption reserve £	Profit and loss account £	Total £
At 1 January 2015	20,025	3,975	10,233,663	10,257,663
Profit for the year	-	-	474,180	474,180
Total comprehensive income	-	-	474,180	474,180
Dividends	-	-	(300,263)	(300,263)
At 31 December 2015	20,025	3,975	10,407,580	10,431,580

The notes on pages 13 to 21 form an integral part of these financial statements.

Page 11

Bright Steels Limited

Statement of Cash Flows for the Year Ended 31 December 2016

	Note	2016 £	2015 £
Cash flows from operating activities
Profit for the year		341,755	474,180
Adjustments to cash flows from non-cash items
Depreciation and amortisation	6	206,923	154,265
Changes in fair value of investment property	14	(46,000)	(69,000)
Profit on disposal of tangible assets	5	(15,029)	-
Finance income	7	(4,386)	(7,633)
Income tax expense	12	99,401	38,331
		582,664	590,143
Working capital adjustments
Decrease in stocks	16	95,331	225,585
(Increase)/decrease in trade debtors	17	(252,319)	732,129
Increase/(decrease) in trade creditors	19	997,045	(1,077,589)
Cash generated from operations		1,422,721	470,268
Income taxes (paid)/received	12	(69,916)	11,786
Net cash flow from operating activities		1,352,805	482,054
Cash flows from investing activities
Interest received	7	4,386	7,633
Acquisitions of tangible assets		(398,465)	(272,465)
Proceeds from sale of tangible assets		15,029	-
Net cash flows from investing activities		(379,050)	(264,832)
Cash flows from financing activities
Dividends paid	24	(360,338)	(300,263)
Net increase/(decrease) in cash and cash equivalents		613,417	(83,041)
Cash and cash equivalents at 1 January		1,652,252	1,735,293
Cash and cash equivalents at 31 December		2,265,669	1,652,252

The notes on pages 13 to 21 form an integral part of these financial statements.

Page 12

Bright Steels Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

1	General information

The company is a private company limited by share capital incorporated in England & Wales.

The address of its registered office is:
Norton Works
Norton
Malton
NORTH YORKSHIRE
YO17 9BD

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The presentational and functional currency is the British Pound Sterling (£).

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

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.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Page 13

Bright Steels Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Tangible assets

Tangible assets are stated in the Balance Sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Land and buildings	2% straight line
Furniture, fittings and equipment	10% - 25% straight line
Motor vehicles	20% - 25% straight line
Other property, plant & equipment	10% straight line

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by external valuers. The valuers use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Page 14

Bright Steels Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Revenue

The analysis of the company's revenue for the year from continuing operations is as follows:

	2016 £	2015 £
Sale of goods	13,224,353	13,575,874

4	Other operating income

The analysis of the company's other operating income for the year is as follows:

	2016 £	2015 £
Rent received	55,896	46,813
Other operating income	10,214	145
Gain/(loss) from investment property	46,000	69,000
	112,110	115,958

5	Other gains and losses

The analysis of the company's other gains and losses for the year is as follows:

	2016 £	2015 £
Gain (loss) on disposal of property, plant and equipment	15,029	-

6	Operating profit

Arrived at after charging/(crediting)

	2016 £	2015 £
Depreciation expense	206,923	154,265
Profit on disposal of property, plant and equipment	(15,029)	-

Page 15

Bright Steels Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

7	Other interest receivable and similar income

	2016 £	2015 £
Interest income on bank deposits	4,386	7,633

8	Interest payable and similar expenses

	2016 £	2015 £
Foreign exchange (gains) / losses	19,102	(131,933)

9	Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

	2016 £	2015 £
Wages and salaries	2,318,588	2,337,915
Social security costs	232,644	232,212
Pension costs, defined contribution scheme	263,214	253,732
	2,814,446	2,823,859

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

	2016 No.	2015 No.
Production	52	54
Administration and support	17	17
Sales, marketing and distribution	5	5
	74	76

10	Directors' remuneration

The directors' remuneration for the year was as follows:

	2016 £	2015 £
Remuneration	428,949	406,879
Contributions paid to money purchase schemes	50,117	39,593
	479,066	446,472

During the year the number of directors who were receiving benefits and share incentives was as follows:

	2016 No.	2015 No.
Accruing benefits under money purchase pension scheme	1	1

Page 16

Bright Steels Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

In respect of the highest paid director:

	2016 £	2015 £
Remuneration	291,232	281,166

11	Auditors' remuneration

	2016 £	2015 £
Audit of the financial statements	16,875	20,500

Taxation

Tax charged/(credited) in the income statement

	2016 £	2015 £
Current taxation
UK corporation tax	69,916	(11,786)
Deferred taxation
Arising from origination and reversal of timing differences	29,485	50,117
Tax expense in the income statement	99,401	38,331

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2015 - the same as the standard rate of corporation tax in the UK) of 20% (2015 - 20%).

The differences are reconciled below:

	2016 £	2015 £
Profit before tax	441,156	512,511
Corporation tax at standard rate	88,231	102,502
Increase (decrease) from effect of different UK tax rates on some earnings	-	(1,005)
Effect of revenues exempt from taxation	-	(74,720)
Effect of expense not deductible in determining taxable profit (tax loss)	11,170	11,554
Total tax charge	99,401	38,331

Page 17

Bright Steels Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

13	Tangible assets

Land and buildings
£

Furniture, fittings and equipment
£

Motor vehicles
£

Other property, plant and equipment
£

Total
£

Cost or valuation

At 1 January 2016

2,457,186

497,123

237,367

5,253,379

8,445,055

Additions

-

29,415

44,322

324,728

398,465

Disposals

-

(3,777)

(35,583)

(19,770)

(59,130)

At 31 December 2016

2,457,186

522,761

246,106

5,558,337

8,784,390

Depreciation

At 1 January 2016

1,355,546

468,918

164,975

4,735,001

6,724,440

Charge for the year

48,363

16,307

32,094

110,159

206,923

Eliminated on disposal

-

(3,777)

(35,583)

(19,770)

(59,130)

At 31 December 2016

1,403,909

481,448

161,486

4,825,390

6,872,233

Carrying amount

At 31 December 2016

1,053,277

41,313

84,620

732,947

1,912,157

At 31 December 2015

1,101,640

28,205

72,392

518,378

1,720,615

Included within the net book value of land and buildings above is £1,053,277 (2015 - £1,101,640) in respect of freehold land and buildings.

14	Investment properties

	2016 £
At 1 January	1,635,000
Fair value adjustments	46,000
At 31 December	1,681,000

The investment properties are revalued annually by a firm of professional valuers, Mark Stephensons, with recent experience in the location and category of property valued. The valuations are based on an open market value.

15	Other financial assets (current and non-current)

	2016 £	2015 £
Non-current financial assets
Unlisted investments	121,424	121,424

Page 18

Bright Steels Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Stocks

	2016 £	2015 £
Raw materials and consumables	1,965,148	1,509,327
Finished goods and goods for resale	2,329,735	2,880,887
	4,294,883	4,390,214

Debtors

	2016 £	2015 £
Trade debtors	2,707,235	2,470,846
Other debtors	89,623	139,826
Prepayments	139,515	73,382
	2,936,373	2,684,054

18	Cash and cash equivalents

	2016 £	2015 £
Cash at bank	2,265,669	1,652,252

Creditors

	2016 £	2015 £
Due within one year
Trade creditors	1,612,233	863,919
Social security and other taxes	220,047	88,115
Other payables	368,544	101,147
Accrued expenses	167,824	318,422
	2,368,648	1,371,603

20	Deferred tax and other provisions

	Deferred tax £
At 1 January 2016	400,376
Additional provisions	29,485
At 31 December 2016	429,861

Page 19

Bright Steels Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

21	Pension and other schemes

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independent administered fund. Contributions payable by the Company during the year amounted to £293,880. (2015 - £312,638)

22	Share capital

Allotted, called up and fully paid shares

	2016		2015
	No.	£	No.	£
Ordinary of £1 each	20,025	20,025	20,025	20,025

Reserves

Retained earnings

Profit and loss account reserves include all current and prior period retained profits and losses. £1,210,522 of the Profit & Loss account reserves at 31 December 2016 (2015: 1,256,356) is non-distributable. The non-distributable element of the Profit & Loss account relates to investment property revaluation gains, net of related deferred taxation.

Dividends

	2016	2015
	£	£
Final dividend	60,075	60,075
Interim dividends	300,263	240,188
	360,338	300,263

Page 20

Bright Steels Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

25	Financial instruments

Financial liabilities measured at fair value

Forward foreign exchange contracts
The Company uses derivative financial instruments to manage its exposure to foreign currency risk on cash and bank balances, trade payables and trade receivables. At the end of the financial year the outstanding financial instruments are restated to fair value on a mark to market basis.

The fair value liability at the end of the financial year was £368,544 (2015 - £101,147) and the change in value included in profit or loss was £(267,397) (2015 - £272,454).

Page 21

	Land and buildings £	Furniture, fittings and equipment £	Motor vehicles £	Other property, plant and equipment £	Total £
Cost or valuation
At 1 January 2016	2,457,186	497,123	237,367	5,253,379	8,445,055
Additions	-	29,415	44,322	324,728	398,465
Disposals	-	(3,777)	(35,583)	(19,770)	(59,130)
At 31 December 2016	2,457,186	522,761	246,106	5,558,337	8,784,390
Depreciation
At 1 January 2016	1,355,546	468,918	164,975	4,735,001	6,724,440
Charge for the year	48,363	16,307	32,094	110,159	206,923
Eliminated on disposal	-	(3,777)	(35,583)	(19,770)	(59,130)
At 31 December 2016	1,403,909	481,448	161,486	4,825,390	6,872,233
Carrying amount
At 31 December 2016	1,053,277	41,313	84,620	732,947	1,912,157
At 31 December 2015	1,101,640	28,205	72,392	518,378	1,720,615