REGISTERED NUMBER: 11108170 (England and Wales) |
Group Strategic Report, Report of the Directors and |
Consolidated Financial Statements for the Year Ended 31 December 2021 |
for |
MC Asset Co Limited |
REGISTERED NUMBER: 11108170 (England and Wales) |
Group Strategic Report, Report of the Directors and |
Consolidated Financial Statements for the Year Ended 31 December 2021 |
for |
MC Asset Co Limited |
MC Asset Co Limited (Registered number: 11108170) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 December 2021 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 5 |
Report of the Independent Auditors | 7 |
Consolidated Income Statement | 10 |
Consolidated Other Comprehensive Income | 11 |
Consolidated Balance Sheet | 12 |
Company Balance Sheet | 13 |
Consolidated Statement of Changes in Equity | 14 |
Company Statement of Changes in Equity | 15 |
Consolidated Cash Flow Statement | 16 |
Notes to the Consolidated Cash Flow Statement | 17 |
Notes to the Consolidated Financial Statements | 19 |
MC Asset Co Limited |
Company Information |
for the Year Ended 31 December 2021 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Lake House |
Market Hill |
Royston |
Hertfordshire |
SG8 9JN |
MC Asset Co Limited (Registered number: 11108170) |
Group Strategic Report |
for the Year Ended 31 December 2021 |
The directors present their strategic report of the company and the group for the year ended 31 December 2021. |
REVIEW OF BUSINESS |
The results for the year and financial position of the group are as shown in the annexed consolidated financial statements. |
The key financial highlights are as follows: |
2021 | 2020 |
£ | £ |
Gross profit | 10,099,540 | 8,084,678 |
Operating profit | 4,087,868 | 1,523,727 |
Gross assets | 60,483,132 | 62,605,613 |
Net assets | 3,957,070 | 3,861,046 |
Due to the nature of the group's trade the financial impact caused by the Covid-19 pandemic across the group has been minimal. The activities of the subsidiaries primarily take place in an outdoor environment; therefore, the implementation of the lockdown restrictions has not affected the group's ability to trade. Wholesale gas prices have increased in the recent economic environment, hence the increase in gross and operating profit during the year. |
MC Asset Co Limited (Registered number: 11108170) |
Group Strategic Report |
for the Year Ended 31 December 2021 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The principal risks and uncertainties facing the group, and an explanation of how they are managed, are set out below. The group has implemented risk controls and loss mitigation plans but cannot give absolute assurance that such procedures will be effective in identifying or controlling each of the operational risks faced by the group. The group manages the principal financial risk within policies and operating parameters approved by the Board of Directors. |
Liquidity risk |
The group has loans from its shareholders. These loans are taken on to finance the expansion of the group's business activities. The directors consider the risk to be mitigated as the loan is provided by the shareholders of the parent company who have a business interest in the group. Although the group is expected to have sufficient cash resources to repay the loan when payments fall due. It is unlikely that the shareholders would demand payment at the detriment of the group's activities. |
Interest risk |
The group carries loans as discussed above. The loans are provided by the shareholders and have an agreed interest rate over the life of the loan. External interest rates therefore do not pose a risk to the loans in place. |
Gas and power prices |
The wholesale gas and power prices received for electricity and gas generation is an important revenue stream, a significant proportion of the group's revenue is exposed to movements in these prices. Future cash flows have been modelled using conservative forecasts of gas and power prices published by independent market experts. Wholesale gas prices have increased in the recent economic environment; however, a material fall in the achieved price below these forecasts could have a negative impact on the group. Management mitigate this risk by closely monitoring the market and if appropriate will enter into short-term fixed price and supply power purchase agreements to secure favourable increases in wholesale prices, but also to protect cash flows from significant downturns in those prices. |
Other economic risk |
As a result of the recent conflict in Ukraine there has been significant disruption to the global supply chain. The anaerobic digestion plants hold critical parts on site in case of urgent repairs to mitigate the supply chain risk to ensure minimal downtime. The conflict has also led to an increase in electric and gas wholesale prices which have increased the cost of running the composting plants and anaerobic digestion plants. The group manages this risk by reviewing fixed price contracts and exploring new technologies at the plants to self supply. |
Health and Safety and the Environment |
The operations of the underlying assets are subject to health and safety and environmental regulation. A breach of these or an accident could lead to damages or compensation to the extent such loss is not covered by insurance policies, adverse publicity, or reputational damage. |
The group engages an independent health and safety consultant to ensure the ongoing appropriateness of its health and safety policies and procedures. At site level, there are reporting lines ensuring that the board is informed of events as soon as possible after they occur. |
Operating Performance |
The availability and operating performance of the equipment used on the anaerobic digestion plants may be impacted by accidents, mechanical failure, grid availability or damage which will directly impact on the revenues and profitability of the sites. Failures may be the result of a short-term issue or a long-term fundamental failure of one piece of equipment, for example, which could impact returns, if there is exposure to one manufacturer. |
Operating and maintenance agreements and asset management agreements are put in place to monitor the sites daily, which is overseen by the board. Insurance coverage is put in place for material damage and business interruption. |
MC Asset Co Limited (Registered number: 11108170) |
Group Strategic Report |
for the Year Ended 31 December 2021 |
OUTLOOK AHEAD |
In general, the outlook for the group is positive, with proven operational and financial performance from the assets. The group continues to look for opportunities to expand its portfolio in the renewable energy sector through acquisition of anaerobic digestion plants. |
ON BEHALF OF THE BOARD: |
MC Asset Co Limited (Registered number: 11108170) |
Report of the Directors |
for the Year Ended 31 December 2021 |
The directors present their report with the financial statements of the company and the group for the year ended 31 December 2021. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of feedstock (energy crops and waste) processing and energy generation. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2021 (2020: Nil). |
DIRECTORS |
Other changes in directors holding office are as follows: |
DISCLOSURE IN THE STRATEGIC REPORT |
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the director's report. It has done so in respect of principal risks and uncertainties. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group'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 group's auditors are aware of that information. |
MC Asset Co Limited (Registered number: 11108170) |
Report of the Directors |
for the Year Ended 31 December 2021 |
AUDITORS |
The auditors, Hardcastle Burton LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
MC Asset Co Limited |
Opinion |
We have audited the financial statements of MC Asset Co Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 31 December 2021 and of the group's 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 group 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 group's and the parent 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 Group 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 Group 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 Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
MC Asset Co Limited |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page 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 group's and the parent 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 group or the parent 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 extensive understanding of the specific laws and regulations applicable to the companies in the group and the industry the companies are involved in. The legal and regulatory framework applicable to the entity's financial statements are FRS 102 and the Companies Act 2006. |
Our background research and existing knowledge of the waste processing and energy production industry concluded that Ofgem accreditation and Environment Agency certification are required to carry out the group's trade and a breach of these conditions would have an effect on the amounts and disclosures in the financial statements. |
We carried out public register searches on the companies in the group to ensure the accreditation and certifications were sufficient and valid. We also reviewed board minutes to corroborate our own research and assess whether there were any provisions to consider in the future. |
We assessed the group's susceptivity to fraud at the various levels of hierachy and how fraud is prevented at each tier. We discussed internal controls with management and how these are implemented. We corroborated our discussions with testing of the controls. Our procedures included walkthroughs, journal testing and accounting estimate reviews. |
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. |
Report of the Independent Auditors to the Members of |
MC Asset Co Limited |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Lake House |
Market Hill |
Royston |
Hertfordshire |
SG8 9JN |
MC Asset Co Limited (Registered number: 11108170) |
Consolidated |
Income Statement |
for the Year Ended 31 December 2021 |
31.12.21 | 31.12.20 |
Notes | £ | £ |
TURNOVER | 3 | 28,575,885 | 24,967,852 |
Cost of sales | 18,476,345 | 16,883,174 |
GROSS PROFIT | 10,099,540 | 8,084,678 |
Administrative expenses | 6,011,672 | 6,560,951 |
OPERATING PROFIT | 5 | 4,087,868 | 1,523,727 |
Interest receivable and similar income | - | 530 |
4,087,868 | 1,524,257 |
Interest payable and similar expenses | 6 | 3,570,891 | 3,651,893 |
PROFIT/(LOSS) BEFORE TAXATION | 516,977 | (2,127,636 | ) |
Tax on profit/(loss) | 7 | 420,953 | (241,148 | ) |
PROFIT/(LOSS) FOR THE FINANCIAL YEAR |
( |
) |
Profit/(loss) attributable to: |
Owners of the parent | 96,024 | (1,886,488 | ) |
MC Asset Co Limited (Registered number: 11108170) |
Consolidated |
Other Comprehensive Income |
for the Year Ended 31 December 2021 |
31.12.21 | 31.12.20 |
Notes | £ | £ |
PROFIT/(LOSS) FOR THE YEAR | 96,024 | (1,886,488 | ) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
96,024 |
(1,886,488 |
) |
Total comprehensive income attributable to: |
Owners of the parent | 96,024 | (1,886,488 | ) |
MC Asset Co Limited (Registered number: 11108170) |
Consolidated Balance Sheet |
31 December 2021 |
31.12.21 | 31.12.20 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 | 7,588,260 | 8,166,449 |
Tangible assets | 10 | 35,075,221 | 36,347,104 |
Investments | 11 | - | - |
42,663,481 | 44,513,553 |
CURRENT ASSETS |
Stocks | 12 | 7,830,063 | 7,001,328 |
Debtors: amounts falling due within one year | 13 | 7,821,830 | 8,152,933 |
Cash at bank and in hand | 2,167,758 | 2,937,799 |
17,819,651 | 18,092,060 |
CREDITORS |
Amounts falling due within one year | 14 | 9,137,175 | 8,654,241 |
NET CURRENT ASSETS | 8,682,476 | 9,437,819 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
51,345,957 |
53,951,372 |
CREDITORS |
Amounts falling due after more than one year |
15 |
(45,234,599 |
) |
(48,349,798 |
) |
PROVISIONS FOR LIABILITIES | 19 | (2,154,288 | ) | (1,740,528 | ) |
NET ASSETS | 3,957,070 | 3,861,046 |
CAPITAL AND RESERVES |
Called up share capital | 20 | 2,767,500 | 2,767,500 |
Capital reserve | 21 | 6,213,671 | 6,213,671 |
Retained earnings | 21 | (5,024,101 | ) | (5,120,125 | ) |
SHAREHOLDERS' FUNDS | 3,957,070 | 3,861,046 |
The financial statements were approved by the Board of Directors and authorised for issue on 25 August 2022 and were signed on its behalf by: |
C P Course - Director |
MC Asset Co Limited (Registered number: 11108170) |
Company Balance Sheet |
31 December 2021 |
31.12.21 | 31.12.20 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 |
Tangible assets | 10 |
Investments | 11 |
CURRENT ASSETS |
Debtors: amounts falling due within one year | 13 |
Debtors: amounts falling due after more than one year |
13 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 14 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
15 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Capital reserve | 21 |
Retained earnings | 21 |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 716,937 | 729,358 |
The financial statements were approved by the Board of Directors and authorised for issue on |
MC Asset Co Limited (Registered number: 11108170) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 December 2021 |
Called up |
share | Retained | Capital | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 January 2020 | 2,767,500 | (3,233,637 | ) | 6,213,671 | 5,747,534 |
Changes in equity |
Total comprehensive income | - | (1,886,488 | ) | - | (1,886,488 | ) |
Balance at 31 December 2020 | 2,767,500 | (5,120,125 | ) | 6,213,671 | 3,861,046 |
Changes in equity |
Total comprehensive income | - | 96,024 | - | 96,024 |
Balance at 31 December 2021 | 2,767,500 | (5,024,101 | ) | 6,213,671 | 3,957,070 |
MC Asset Co Limited (Registered number: 11108170) |
Company Statement of Changes in Equity |
for the Year Ended 31 December 2021 |
Called up |
share | Retained | Capital | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 January 2020 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2020 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2021 |
MC Asset Co Limited (Registered number: 11108170) |
Consolidated Cash Flow Statement |
for the Year Ended 31 December 2021 |
31.12.21 | 31.12.20 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 7,775,895 | 5,689,180 |
Interest paid | (3,562,232 | ) | (3,641,466 | ) |
Interest element of hire purchase payments paid |
(8,659 |
) |
(10,427 |
) |
Tax paid | (2,591 | ) | - |
Net cash from operating activities | 4,202,413 | 2,037,287 |
Cash flows from investing activities |
Purchase of tangible fixed assets | (1,846,431 | ) | (764,810 | ) |
Sale of tangible fixed assets | 140,998 | 64,666 |
Interest received | - | 530 |
Net cash from investing activities | (1,705,433 | ) | (699,614 | ) |
Cash flows from financing activities |
Loan repayments in year | (3,176,666 | ) | (1,811,527 | ) |
New hire purchase contracts in the year | 272,028 | - |
Hire purchase contract repayments | (224,325 | ) | (162,330 | ) |
Net cash from financing activities | (3,128,963 | ) | (1,973,857 | ) |
Decrease in cash and cash equivalents | (631,983 | ) | (636,184 | ) |
Cash and cash equivalents at beginning of year |
2 |
2,799,741 |
3,435,925 |
Cash and cash equivalents at end of year | 2 | 2,167,758 | 2,799,741 |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 31 December 2021 |
1. | RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31.12.21 | 31.12.20 |
£ | £ |
Profit/(loss) before taxation | 516,977 | (2,127,636 | ) |
Depreciation charges | 3,599,436 | 3,586,963 |
(Profit)/loss on disposal of fixed assets | (43,933 | ) | 3,898 |
Finance costs | 3,570,891 | 3,651,893 |
Finance income | - | (530 | ) |
7,643,371 | 5,114,588 |
Increase in stocks | (828,735 | ) | (502,403 | ) |
Decrease in trade and other debtors | 331,103 | 1,809,040 |
Increase/(decrease) in trade and other creditors | 630,156 | (732,045 | ) |
Cash generated from operations | 7,775,895 | 5,689,180 |
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 | 2,167,758 | 2,937,799 |
Bank overdrafts | - | (138,058 | ) |
2,167,758 | 2,799,741 |
Year ended 31 December 2020 |
31.12.20 | 1.1.20 |
£ | £ |
Cash and cash equivalents | 2,937,799 | 3,435,925 |
Bank overdrafts | (138,058 | ) | - |
2,799,741 | 3,435,925 |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 31 December 2021 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1.1.21 | Cash flow | At 31.12.21 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 2,937,799 | (770,041 | ) | 2,167,758 |
Bank overdrafts | (138,058 | ) | 138,058 | - |
2,799,741 | (631,983 | ) | 2,167,758 |
Debt |
Finance leases | (231,211 | ) | (47,703 | ) | (278,914 | ) |
Debts falling due after 1 year | (4,827,534 | ) | 317,207 | (4,510,327 | ) |
(5,058,745 | ) | 269,504 | (4,789,241 | ) |
Total | (2,259,004 | ) | (362,479 | ) | (2,621,483 | ) |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 December 2021 |
1. | STATUTORY INFORMATION |
MC Asset Co Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The functional and presentational currency of the group is pound sterling. |
The financial statements have been prepared on the going concern basis. The directors consider that the group's operations and budget for the year ended 31 December 2022 and onwards indicate that sufficient income will be received in order to create positive cash flows. The company has financial support from its parent company through secured loan notes which are not repayable until at least 2027, see note 18. Furthermore, the parent company has confirmed that it will continue to provide day to day financial support for at least the next 12 months from the approval of these accounts. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Goodwill |
When the fair value of the consideration for an acquired undertaking exceeds the fair value of its separable net assets the difference is treated as purchased goodwill and is capitalised and amortised through the profit and loss account over its estimated economic life. The estimated economic life of goodwill is 10 to 19 years. The directors have assessed the economic life of the goodwill arising by reviewing the value of the underlying intangible and tangible assets included in the acquired undertakings. |
Goodwill is reviewed for impairment at the end of the first full financial year following the acquisition and in other periods if events or changes in circumstances indicate that carrying value may not be recoverable. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Tangible fixed assets |
Depreciation is provided at the following annual rates in order to wite 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 | Straight line over 20 years and in accordance with the lease term |
Plant and machinery | 20% reducing balance and 15% on cost (excluding AD and composting sites) |
Fixtures and fittings | 25% on cost |
Motor vehicles | 20 % reducing balance and 15% on cost |
Computer equipment | 15% on cost |
The AD and composting sites used for the purpose of trade are included in plant and machinery and are depreciated on a straight line basis over the shorter of the lease term or 20 years. The sites are also revalued periodically and any aggregate surplus or deficit arising from changes in market value is transferred to a non-distributable reserve. |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' of FRS 102 to all of its financial instruments. |
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. |
Basic financial assets |
Basic financial assets, which include debtors, 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. |
Basic financial liabilities |
Basic financial liabilities, including creditors and loans 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. |
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
2. | ACCOUNTING POLICIES - continued |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
3. | TURNOVER |
The turnover and profit (2020 - loss) before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
31.12.21 | 31.12.20 |
£ | £ |
Composting | 4,319,380 | 3,836,111 |
Anaerobic digestion | 24,256,505 | 21,131,741 |
28,575,885 | 24,967,852 |
4. | EMPLOYEES AND DIRECTORS |
There were no staff costs for the year ended 31 December 2021 nor for the year ended 31 December 2020. |
The average number of employees during the year was NIL (2020 - NIL). |
The average number of employees by undertakings that were proportionately consolidated during the year was NIL (2020 - NIL). |
31.12.21 | 31.12.20 |
£ | £ |
Directors' remuneration | - | - |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
31.12.21 | 31.12.20 |
£ | £ |
Hire of plant and machinery | 225,358 | 157,073 |
Depreciation - owned assets | 2,913,393 | 2,883,424 |
Depreciation - assets on hire purchase contracts | 107,856 | 121,430 |
(Profit)/loss on disposal of fixed assets | (43,933 | ) | 3,898 |
Goodwill amortisation | 578,189 | 582,110 |
Auditors' remuneration | 20,000 | 15,000 |
Auditors' rem - other services | 54,000 | 32,000 |
Other services relating to taxation | 8,000 | 7,000 |
Foreign exchange differences | 14,437 | (2,858 | ) |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.12.21 | 31.12.20 |
£ | £ |
Loan | 3,562,232 | 3,641,466 |
Hire purchase | 8,659 | 10,427 |
3,570,891 | 3,651,893 |
7. | TAXATION |
Analysis of the tax charge/(credit) |
The tax charge/(credit) on the profit for the year was as follows: |
31.12.21 | 31.12.20 |
£ | £ |
Current tax: |
UK corporation tax | 2,591 | - |
Deferred tax | 418,362 | (241,148 | ) |
Tax on profit/(loss) | 420,953 | (241,148 | ) |
Reconciliation of total tax charge/(credit) included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
31.12.21 | 31.12.20 |
£ | £ |
Profit/(loss) before tax | 516,977 | (2,127,636 | ) |
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of 19 % (2020 - 19 %) |
98,226 |
(404,251 |
) |
Effects of: |
Expenses not deductible for tax purposes | 540,406 | 565,115 |
Utilisation of tax losses | (288,393 | ) | (39,936 | ) |
Deferred tax due to change in rate | 517,030 | - |
Deferred tax not provided for due to losses | (384,527 | ) | (362,076 | ) |
Super deduction | (61,789 | ) | - |
Total tax charge/(credit) | 420,953 | (241,148 | ) |
8. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
9. | INTANGIBLE FIXED ASSETS |
Group |
Goodwill |
£ |
COST |
At 1 January 2021 |
and 31 December 2021 | 9,879,432 |
AMORTISATION |
At 1 January 2021 | 1,712,983 |
Amortisation for year | 578,189 |
At 31 December 2021 | 2,291,172 |
NET BOOK VALUE |
At 31 December 2021 | 7,588,260 |
At 31 December 2020 | 8,166,449 |
10. | TANGIBLE FIXED ASSETS |
Group |
Short | Long | Plant and |
leasehold | leasehold | machinery |
£ | £ | £ |
COST |
At 1 January 2021 | 244,415 | 201,187 | 42,263,323 |
Additions | - | - | 1,840,051 |
Disposals | - | - | (246,780 | ) |
At 31 December 2021 | 244,415 | 201,187 | 43,856,594 |
DEPRECIATION |
At 1 January 2021 | 66,063 | 25,732 | 6,391,661 |
Charge for year | 19,563 | 14,421 | 2,970,734 |
Eliminated on disposal | - | - | (207,882 | ) |
At 31 December 2021 | 85,626 | 40,153 | 9,154,513 |
NET BOOK VALUE |
At 31 December 2021 | 158,789 | 161,034 | 34,702,081 |
At 31 December 2020 | 178,352 | 175,455 | 35,871,662 |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
10. | TANGIBLE FIXED ASSETS - continued |
Group |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2021 | 3,605 | 159,810 | 3,244 | 42,875,584 |
Additions | 5,567 | - | 813 | 1,846,431 |
Disposals | - | (78,154 | ) | - | (324,934 | ) |
At 31 December 2021 | 9,172 | 81,656 | 4,057 | 44,397,081 |
DEPRECIATION |
At 1 January 2021 | 3,375 | 41,204 | 445 | 6,528,480 |
Charge for year | 925 | 14,997 | 609 | 3,021,249 |
Eliminated on disposal | - | (19,987 | ) | - | (227,869 | ) |
At 31 December 2021 | 4,300 | 36,214 | 1,054 | 9,321,860 |
NET BOOK VALUE |
At 31 December 2021 | 4,872 | 45,442 | 3,003 | 35,075,221 |
At 31 December 2020 | 230 | 118,606 | 2,799 | 36,347,104 |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Plant and |
machinery |
£ |
COST |
At 1 January 2021 | 772,212 |
Additions | 296,395 |
Transfer to ownership | (305,469 | ) |
At 31 December 2021 | 763,138 |
DEPRECIATION |
At 1 January 2021 | 286,493 |
Charge for year | 107,856 |
Transfer to ownership | (165,975 | ) |
At 31 December 2021 | 228,374 |
NET BOOK VALUE |
At 31 December 2021 | 534,764 |
At 31 December 2020 | 485,719 |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
11. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2021 |
and 31 December 2021 |
NET BOOK VALUE |
At 31 December 2021 |
At 31 December 2020 |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiaries |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
11. | FIXED ASSET INVESTMENTS - continued |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
The company is a 100% subsidiary of Camel Power Limited. |
12. | STOCKS |
Group |
31.12.21 | 31.12.20 |
£ | £ |
Feedstock and parts | 7,830,063 | 7,001,328 |
13. | DEBTORS |
Group | Company |
31.12.21 | 31.12.20 | 31.12.21 | 31.12.20 |
£ | £ | £ | £ |
Amounts falling due within one year: |
Trade debtors | 1,055,790 | 1,528,417 |
Other debtors | 216,071 | 135,148 |
VAT | - | 865,558 |
Prepayments and accrued income | 6,549,969 | 5,623,810 |
7,821,830 | 8,152,933 |
Amounts falling due after more than one | year: |
Amounts owed by group undertakings | - | - |
Aggregate amounts | 7,821,830 | 8,152,933 |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31.12.21 | 31.12.20 | 31.12.21 | 31.12.20 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 16) | - | 138,058 |
Hire purchase contracts (see note 17) | 147,587 | 156,751 |
Trade creditors | 7,630,652 | 7,109,490 |
VAT | 52,676 | - | 15,914 | 7,534 |
Other creditors | 238,806 | 278,743 |
Accruals and deferred income | 1,067,454 | 971,199 |
9,137,175 | 8,654,241 |
15. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
31.12.21 | 31.12.20 | 31.12.21 | 31.12.20 |
£ | £ | £ | £ |
Other loans (see note 16) | 4,510,327 | 4,827,534 |
Hire purchase contracts (see note 17) | 131,327 | 74,460 |
Amounts owed to group undertakings | 40,592,945 | 43,447,804 | 41,347,732 | 44,205,479 |
45,234,599 | 48,349,798 |
16. | LOANS |
Included in creditors falling due after more than one year are other loans of £4,510,327 (2020 - £4,827,534) and amounts owed to group undertakings of £40,592,945 (2020 - £43,447,804). These are fully repayable after more than five years (see note 18 and 24). |
17. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
31.12.21 | 31.12.20 |
£ | £ |
Net obligations repayable: |
Within one year | 147,587 | 156,751 |
Between one and five years | 131,327 | 74,460 |
278,914 | 231,211 |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
17. | LEASING AGREEMENTS - continued |
Group |
Non-cancellable operating | leases |
31.12.21 | 31.12.20 |
£ | £ |
Within one year | 645,486 | 651,747 |
Between one and five years | 2,321,728 | 2,366,385 |
In more than five years | 4,905,648 | 5,322,579 |
7,872,862 | 8,340,711 |
18. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group | Company |
31.12.21 | 31.12.20 | 31.12.21 | 31.12.20 |
£ | £ | £ | £ |
Other loans | 4,510,327 | 4,827,534 | 4,510,327 | 4,827,534 |
Hire purchase contracts | 278,914 | 231,211 | - | - |
Amount owed to group companies | 40,592,945 | 43,452,045 | 40,592,945 | 43,452,045 |
45,382,186 | 48,510,790 |
The hire purchase contracts are secured over the assets upon which the hire purchase contract relates to. |
The other loans and amounts owed to group companies are in relation to loan notes which are secured by way of a fixed and floating charge of the assets of the company. |
A joint security has been given on 30 January 2020 by MC Asset Co Limited, Decoy Farm Power Limited, Helmdon Blackpits Power Limited and Material Change Composting Limited on any debt owed by any named company now, or arising in the future up to an unlimited amount to Barclays Bank plc. |
19. | PROVISIONS FOR LIABILITIES |
Group |
31.12.21 | 31.12.20 |
£ | £ |
Deferred tax |
Accelerated capital allowances | 773,460 | 532,089 |
Holdover relief | 1,590,051 | 1,208,439 |
Trading losses | (209,223 | ) | - |
2,154,288 | 1,740,528 |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
19. | PROVISIONS FOR LIABILITIES - continued |
Group |
Deferred |
tax |
£ |
Balance at 1 January 2021 | 1,740,528 |
Accelerated capital allowances | 105,953 |
Change in tax rate | 517,030 |
Available tax losses | (209,223 | ) |
Balance at 31 December 2021 | 2,154,288 |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.21 | 31.12.20 |
value: | £ | £ |
Ordinary | £1 | 2,767,500 | 2,767,500 |
21. | RESERVES |
Group |
Retained | Capital |
earnings | reserve | Totals |
£ | £ | £ |
At 1 January 2021 | (5,120,125 | ) | 6,213,671 | 1,093,546 |
Profit for the year | 96,024 | 96,024 |
At 31 December 2021 | (5,024,101 | ) | 6,213,671 | 1,189,570 |
Company |
Retained | Capital |
earnings | reserve | Totals |
£ | £ | £ |
At 1 January 2021 | 7,243,168 |
Profit for the year | - |
At 31 December 2021 | 7,960,105 |
The capital reserve relates to non-repayable capital contributions made to the parent company, MC Asset Co Ltd by its shareholders to fund its investments in the subsidiary companies. |
22. | CAPITAL COMMITMENTS |
31.12.21 | 31.12.20 |
£ | £ |
Contracted but not provided for in the |
financial statements | 981,596 | - |
Capital commitments relate to the agreed purchase of fixed assets. |
MC Asset Co Limited (Registered number: 11108170) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2021 |
23. | OTHER FINANCIAL COMMITMENTS |
31.12.21 | 31.12.20 |
£ | £ |
Within one year | 3,377,694 | 3,261,901 |
Between one and five years | 13,184,095 | 12,604,844 |
After five years | 5,597,373 | 8,505,451 |
22,159,162 | 24,372,196 |
Under operator management fee arrangements, the group is committed to paying operator, management and service fees. |
24. | RELATED PARTY DISCLOSURES |
The group has taken advantage of the exemption in FRS 102, section 33 not to disclose transactions and balances with wholly owned group companies. |
The group has loan notes in issue to AD Aggregator Platform Ltd, the 90% parent company. At the year end the balance due was £40,592,945 (2020 - £43,447,804), which includes capitalised interest. The interest charged on the loans was £3,206,009 (2020 - £3,328,623). Interest is charged at 7% per annum on loans issued in 2019 and 8% per annum on loans issued in 2018. Interest is capitalised if it is unpaid at the interest payment date. The total amount due to the 90% parent company falls due as follows: £16,647,984 becomes repayable on 30 June 2028, £19,226,360 on 30 September 2029 and £4,718,601 on 31 December 2029. |
25. | ULTIMATE CONTROLLING PARTY |
The immediate parent company is AD Aggregator Platform Limited, a company incorporated in England and Wales. |
The ultimate controlling party is NatWest Group Pension Fund. |