Premier Waste (UK) Plc - Limited company accounts 20.1

REGISTERED NUMBER: 03565632 (England and Wales)

Strategic Report,

Report of the Directors and

Financial Statements

for the Year Ended 31 December 2021

for

PREMIER WASTE (UK) PLC

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

14

Directors:

D Courtney

P Courtney

Secretary:

D Courtney

Registered office:

5-6 Greenfield Crescent

Eggbaston

Birmingham

West Midlands

B15 3BE

Business address:

209-211 Walsall Road

Perry Barr

Birmingham

West Midlands

B42 1BS

Registered number:

03565632 (England and Wales)

Auditors:

Haines Watts Birmingham LLP

5-6 Greenfield Crescent

Edgbaston

Birmingham

B15 3BE

Bankers:

Lloyds Bank Plc

P O Box 46

The Bridge

Walsall

West Midlands

WS1 1LU

The directors present their strategic report for the year ended 31 December 2021.

Review of business

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

There has been no change in the principal activities of the company during the period.

We consider that our key performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross margin and return on capital employed.

Turnover has increased by 8.7% on the previous year. Gross profit margin has decreased to 31.9% (2020: 40.1%).

Overall there has been an operating profit of £409k (2020: £660k) and a profit before tax of £384k (2020: £632k). After taxation, £290k has been added to reserves which at the end of the year stood at £2.75m (2020:£2.46m).

Return on capital employed has reduced to 13.0% (2020: 21.0%). Return on capital employed is calculated as profit before interest and tax divided by capital employed, which constitutes total assets less current liabilities.

Development and performance

We consider that the financial position of the company at the period end is satisfactory, with adequate cash resources.

Principal risks and uncertainties

As for many businesses of our size, the business environment in which we operate continues to be challenging. The market is highly competitive and margins continue to be under pressure. We are of course subject to world economic patterns and the level of activity within our economy.

With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside our control.

Section 172(1) statement

Stakeholder Engagement

As the Board of Premier Waste (UK) Plc we have a legal responsibility under section 172 of the Companies Act 2006 to act in the way we consider, in good faith, would be most likely to promote the company's success for the benefit of its members as a whole, and to have regard to the long term effect of our decisions on the company and its stakeholders. This statement summarises the ways in which we as a Board address this responsibility.

Promoting the company's success for its members

Premier Waste (UK) Plc has provided its employees, past and present, with opportunities for employment, training, career development and financial reward.

In an increasingly competitive environment with competitors accepting low margins, the company has focused on maintaining its image as a trusted supplier offering high quality services whilst delivering pleasing financial returns. In order to continue to deliver satisfactory returns we recognise the need to protect and grow our markets, form strategic partnerships with other companies operating in our market sector whilst optimizing investments in the business.

Our key stakeholders, and the ways in which we engage with them, include:

Our shareholders:

We recognise that the shareholders place their trust and confidence in us to manage the affairs of the company with the best interests of all stakeholders at heart whilst also striving to achieve consistently high returns on their investment in the business. We are fortunate that the shareholders take an active interest in promoting the long term success of the business.

Section 172(1) statement - continued

Our employees:

We recognise the valuable contribution that our employees make to the success of our business. All employees undergo appropriate training to ensure that we maintain the highest standard of operations and safety. Advancement of employees is encouraged and supported by the company through provision of appropriate training courses. Communications on all matters of relevance or significance are communicated through a site wide network of notice boards. Employees are encouraged to approach senior management at any time if they have issues to discuss.

Our customers and suppliers:

The success of our business is based on forging close relationships with our customers and suppliers, understanding their needs and promoting a spirit of cooperation with both ends of the value chain. We meet regularly with key suppliers to discuss the outlook for the industry and our business needs. Our customers appreciate the high quality service we aim to provide.

Our community:

As a local business in Birmingham we recognise the need to engage with our local community.

Our planet:

We recognise that compliance with environmental legislation and good practice is essential in order to contribute to the wellbeing of our planet and to continue operating.

Health & Safety/Environmental:

The Company takes its responsibilities with regard to health and safety and environmental matters seriously. Appropriate policies and procedures are in place and management systems are well documented and controlled by both the company. Staff training needs are identified and implemented in order that the Company continues to meet its legal obligations. There have been no reportable incidents of a health and safety or environmental nature in the period. The Company has implemented policies and procedures, in line with Government and HSE guidelines to ensure the wellbeing of its workforce during the COVID-19 crisis.

On behalf of the board:

D Courtney - Director

29 June 2022

The directors present their report with the financial statements of the company for the year ended 31 December 2021.

Principal activity

The principal activity of the company continues to be that of waste disposal services.

Dividends

No dividends will be distributed for the year ended 31 December 2021.

Directors

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

D Courtney

P Courtney

Financial risk management objectives and policies

The company's activities expose it to a number of financial risks:

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for that other party by failing to discharge an obligation. All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company mitigates liquidity risk by managing cash generation through its operations and by applying cash collection targets.

Policy for payment of creditors

The company's current policy concerning the payment of trade creditors is to settle the terms of payment with suppliers and agreeing the terms of each transaction, ensuring that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts and pay in accordance with the group's contractual and other legal obligations.

Going concern

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

Statement of corporate governance arrangements

The company is exempt from the requirement to make disclosures regarding corporate governance arrangements.

Disclosure in the strategic report

Certain disclosure required in the Directors' Report have been covered in the Strategic Report.

Statement of directors' responsibilities

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable 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 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.

Statement as to disclosure of information to auditors

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Auditors

The auditors, Haines Watts Birmingham LLP, will be deemed to be re-appointed under section 487(2) of the Companies Act 2006.

On behalf of the board:

D Courtney - Director

29 June 2022

Opinion

We have audited the financial statements of Premier Waste (UK) Plc (the 'company') for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on pages four and five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory framework applicable to both the company itself and the industry in which it operates. We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussion with the directors and other management. The most significant were identified as the Companies Act 2006, UK GAAP (FRS102), Environmental Protection Act 1990 and relevant tax legislation.

We considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statements. Our audit procedures included:

-

making enquires of directors and management as to where they consider there to be a susceptibility to fraud and whether they have any knowledge or suspicion of fraud;

-

obtaining licences from the Environmental Agency to ensure compliance with regulations

-

obtaining an understanding of the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations;

-

assessing the design effectiveness of the controls in place to prevent and detect fraud;

-

assessing the risk of management override including identifying and testing journal entries;

-

challenging the assumptions and judgements made by management in its significant accounting estimates.

Whilst our audit did not identify any key audit matters relating to the detection of irregularities including fraud, and despite the audit being planned and conducted in accordance with ISAs (UK), there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity would likely involve collusion, forgery, intentional 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 Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Kevin Hodgetts FCA (Senior Statutory Auditor)

for and on behalf of Haines Watts Birmingham LLP

5-6 Greenfield Crescent

Edgbaston

Birmingham

B15 3BE

30 June 2022

Turnover

3

10,785,934

9,845,211

Cost of sales

(7,346,573

)

(5,898,122

)

Gross profit

3,439,361

3,947,089

Administrative expenses

(3,061,751

)

(3,420,878

)

377,610

526,211

Other operating income

4

31,798

133,919

409,408

660,130

Interest payable and similar expenses

6

(24,846

)

(27,677

)

Profit before taxation

7

384,562

632,453

Tax on profit

8

(94,487

)

46,934

Profit for the financial year

290,075

679,387

Other comprehensive income

-

-

Total comprehensive income for the year

290,075

679,387

Fixed assets

Tangible assets

9

1,338,785

1,695,350

Current assets

Debtors

10

1,766,584

1,864,404

Cash at bank and in hand

4,074,576

3,224,044

5,841,160

5,088,448

Creditors

Amounts falling due within one year

11

4,023,010

3,641,914

Net current assets

1,818,150

1,446,534

Total assets less current liabilities

3,156,935

3,141,884

Creditors

Amounts falling due after more than one year

12

(210,613

)

(458,353

)

Provisions for liabilities

16

(196,747

)

(224,031

)

Net assets

2,749,575

2,459,500

Capital and reserves

Called up share capital

17

50,000

50,000

Retained earnings

18

2,699,575

2,409,500

Shareholders' funds

2,749,575

2,459,500

The financial statements were approved by the Board of Directors and authorised for issue on 29 June 2022 and were signed on its behalf by:

D Courtney - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2020

50,000

1,730,113

1,780,113

Changes in equity

Total comprehensive income

-

679,387

679,387

Balance at 31 December 2020

50,000

2,409,500

2,459,500

Changes in equity

Total comprehensive income

-

290,075

290,075

Balance at 31 December 2021

50,000

2,699,575

2,749,575

Cash flows from operating activities

Cash generated from operations

1

1,481,023

605,485

Interest element of hire purchase payments paid

(24,846

)

(27,677

)

Net cash from operating activities

1,456,177

577,808

Cash flows from investing activities

Purchase of tangible fixed assets

(97,841

)

(165,854

)

Sale of tangible fixed assets

42,000

10,920

Net cash from investing activities

(55,841

)

(154,934

)

Cash flows from financing activities

New loans in year

-

50,000

Loan repayments in year

(50,000

)

-

Loans repaid to group companies

(194,382

)

877,922

Capital repayments in year

(329,560

)

(380,264

)

Government grants received

24,138

123,706

Net cash from financing activities

(549,804

)

671,364

Increase in cash and cash equivalents

850,532

1,094,238

Cash and cash equivalents at beginning of year

2

3,224,044

2,129,806

Cash and cash equivalents at end of year

2

4,074,576

3,224,044

1.	Reconciliation of profit before taxation to cash generated from operations

2021

2020

£

£

Profit before taxation

384,562

632,453

Depreciation charges

427,252

495,963

Profit on disposal of fixed assets

-

(10,591

)

Government grants

(31,798

)

(133,919

)

Finance costs

24,846

27,677

804,862

1,011,583

Decrease in trade and other debtors

316,434

171,068

Increase/(decrease) in trade and other creditors

359,727

(577,166

)

Cash generated from operations

1,481,023

605,485

2.	Cash and cash equivalents

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2021

31/12/21

1/1/21

£

£

Cash and cash equivalents

4,074,576

3,224,044

Year ended 31 December 2020

31/12/20

1/1/20

£

£

Cash and cash equivalents

3,224,044

2,129,806

3.	Analysis of changes in net funds

At 1/1/21

Cash flow

At 31/12/21

£

£

£

Net cash

Cash at bank and in hand

3,224,044

850,532

4,074,576

3,224,044

850,532

4,074,576

Debt

Finance leases

(726,505

)

329,560

(396,945

)

Debts falling due within 1 year

(5,000

)

5,000

-

Debts falling due after 1 year

(45,000

)

45,000

-

(776,505

)

379,560

(396,945

)

Total

2,447,539

1,230,092

3,677,631

1.	Statutory information

Premier Waste (UK) Plc is a private company , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	Accounting policies

Basis of preparing the financial statements

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

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

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

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. In making this assessment the directors are required to consider a period of at least 12 months from the date of approval of the financial statements.

Significant judgements and estimates

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

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

periods.

Turnover

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

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue is recognised when the significant risks and rewards of ownership have passed to the customer (usually on dispatch of the goods or service), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that it is recoverable.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Long leasehold

-

10% on cost

Plant and machinery

-

25% on reducing balance

Fixtures and fittings

-

25% on reducing balance

Motor vehicles

-

25% on reducing balance

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

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

Government grants

Grants which are of a revenue nature are credited to the profit and loss account in the same period as the related expenditure.

Grants which are of a capital nature, are released to the profit and loss account systemically over the estimated useful life of the related capital assets. Grants allocated to future periods are carried forward in the Balance Sheet in accruals and deferred income.

Financial instruments

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

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

Other financial assets

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

Impairment of financial assets

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

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

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

The impairment reversal is recognised in profit or loss account.

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

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

Trade payables 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 payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

Derecognition of financial liabilities

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

Equity instruments

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

Cash at bank and in hand

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

Taxation

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

Current tax

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

Deferred tax

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

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks

and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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

Pension costs and other post-retirement benefits

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

Employee benefits

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

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

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

3.

Turnover

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2021

2020

£

£

Waste management services

10,785,934

9,845,211

10,785,934

9,845,211

4.	Other operating income

2021

2020

£

£

Government grants

31,798

133,919

5.	Employees and directors

2021

2020

£

£

Wages and salaries

1,154,347

1,136,083

Social security costs

114,974

112,290

Other pension costs

23,406

19,962

1,292,727

1,268,335

The average number of employees during the year was as follows:

2021

2020

Administrative

3

4

Direct

34

34

Directors

2

2

39

40

2021

2020

£

£

Directors' remuneration

-

-

6.

Interest payable and similar expenses

2021

2020

£

£

Hire purchase

24,846

27,677

7.	Profit before taxation

The profit is stated after charging/(crediting):

2021

2020

£

£

Other operating leases

198,002

198,002

Depreciation - owned assets

180,060

191,039

Depreciation - assets on hire purchase contracts

247,192

304,924

Profit on disposal of fixed assets

(14,846

)

(10,591

)

Auditors' remuneration

6,000

6,000

Creditor Remuneration Trust contributions

The company made contributions in the accounting period to a Creditor Remuneration Trust (The GC Wealth RT Limited Remuneration Trust) in the amount of £1,050,000 (2020: £1,200,000). The terms of the Trust are set out in a Trust Deed executed by the company and the original trustees.

8.

Taxation

Analysis of the tax charge/(credit)

The tax charge/(credit) on the profit for the year was as follows:

2021

2020

£

£

Current tax:

UK corporation tax

121,771

-

Under/ (over) provision in

prior year

-

(132,099

)

Total current tax

121,771

(132,099

)

Deferred tax

(27,284

)

85,165

Tax on profit

94,487

(46,934

)