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REGISTERED NUMBER: 04517359 (England and Wales)
















Report of the Directors and

Financial Statements for the Year Ended 31 December 2021

for

Material Change Composting Limited

Material Change Composting Limited (Registered number: 04517359)






Contents of the Financial Statements
for the Year Ended 31 December 2021




Page

Company Information 1

Report of the Directors 2

Report of the Independent Auditors 4

Income Statement 7

Statement of Financial Position 8

Notes to the Financial Statements 9


Material Change Composting Limited

Company Information
for the Year Ended 31 December 2021







DIRECTORS: E W Bastow
H Unwin
J P Samworth





SECRETARY: H L Miles





REGISTERED OFFICE: Dairy Farm Office
Dairy Road Semer
Ipswich
Suffolk
IP7 6RA





REGISTERED NUMBER: 04517359 (England and Wales)





AUDITORS: Hardcastle Burton LLP
Lake House
Market Hill
Royston
Hertfordshire
SG8 9JN

Material Change Composting Limited (Registered number: 04517359)

Report of the Directors
for the Year Ended 31 December 2021

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 in the year under review was that of waste processing including composting, recycling and related contracting activities.

DIRECTORS
E W Bastow has held office during the whole of the period from 1 January 2021 to the date of this report.

Other changes in directors holding office are as follows:

H Unwin and J P Samworth were appointed as directors after 31 December 2021 but prior to the date of this report.

S Trivellato ceased to be a director after 31 December 2021 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing 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;
-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, Hardcastle Burton LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.


Material Change Composting Limited (Registered number: 04517359)

Report of the Directors
for the Year Ended 31 December 2021

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:





E W Bastow - Director


22 August 2022

Report of the Independent Auditors to the Members of
Material Change Composting Limited

Opinion
We have audited the financial statements of Material Change Composting Limited (the 'company') for the year ended 31 December 2021 which comprise the Income Statement, Statement of Financial Position and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Report of the Directors has been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Material Change Composting Limited


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 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; or
- the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page two, 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.

Report of the Independent Auditors to the Members of
Material Change Composting Limited


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:

Our approach was as follows:-

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that related to the reporting framework (FRS 102 and Companies Act 2006) and the relevant tax compliance regulations in the jurisdictions that the company operates.

In addition, we concluded that there are certain significant laws and regulations which may have an effect on the determination of the amounts and disclosures in the financial statements being those relating to the environment and occupational health and safety.

We obtained an understanding to how the company is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of Board minutes and any correspondence received from regulatory bodies.

We assessed the susceptivity of the company's financial statements to material misstatement, including how fraud might occur by meeting with management from various parts of the business to understand the systems and controls of the company.

Based on our understanding we designed our audit procedures to identify non-compliance with such laws and regulations identified in the paragraphs above. Our procedures involved; journal entry testing; focusing on manual journals and journals indicating large or unusual transactions based on our understanding of the business; enquiries of management and focused testing in relation to revenue and management override.

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.




Denise Lindsell FCA (Senior Statutory Auditor)
for and on behalf of Hardcastle Burton LLP
Lake House
Market Hill
Royston
Hertfordshire
SG8 9JN

8 September 2022

Material Change Composting Limited (Registered number: 04517359)

Income Statement
for the Year Ended 31 December 2021

31.12.21 31.12.20
Notes £    £   

TURNOVER 4,319,380 3,836,111

Cost of sales 2,717,844 2,265,668
GROSS PROFIT 1,601,536 1,570,443

Administrative expenses 972,280 1,022,085
OPERATING PROFIT 629,256 548,358

Interest receivable and similar income - 33,653
629,256 582,011

Interest payable and similar expenses 8,659 30,289
PROFIT BEFORE TAXATION 620,597 551,722

Tax on profit 4 79,609 (37,242 )
PROFIT FOR THE FINANCIAL YEAR 540,988 588,964

Material Change Composting Limited (Registered number: 04517359)

Statement of Financial Position
31 December 2021

31.12.21 31.12.20
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 6 2,458 3,358
Tangible assets 7 1,581,545 1,367,368
1,584,003 1,370,726

CURRENT ASSETS
Stocks 8 59,555 64,116
Debtors 9 1,443,986 1,491,211
Cash at bank and in hand 212,428 395,697
1,715,969 1,951,024
CREDITORS
Amounts falling due within one year 10 526,763 432,362
NET CURRENT ASSETS 1,189,206 1,518,662
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,773,209

2,889,388

CREDITORS
Amounts falling due after more than one
year

11

(131,327

)

(74,460

)

PROVISIONS FOR LIABILITIES 14 (248,032 ) (168,423 )
NET ASSETS 2,393,850 2,646,505

CAPITAL AND RESERVES
Called up share capital 15 323,458 323,458
Share premium 16 326,763 326,763
Retained earnings 16 1,743,629 1,996,284
SHAREHOLDERS' FUNDS 2,393,850 2,646,505

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 22 August 2022 and were signed on its behalf by:





E W Bastow - Director


Material Change Composting Limited (Registered number: 04517359)

Notes to the Financial Statements
for the Year Ended 31 December 2021

1. STATUTORY INFORMATION

Material Change Composting Limited is a private company, limited by shares , 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 Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

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
Where the fair value of the consideration for an acquired business 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 useful life. The estimated useful life of goodwill is considered to be 5 and 10 years for the respectively acquired businesses with positive goodwill.

Where the fair value of the separable net assets exceeds the fair value of the consideration for an acquired business, the difference is treated as negative goodwill and is capitalised and amortised through the profit and loss account in the period in which the non-monetary assets acquired are recovered. In the case of fixed assets this is the period over which they are depreciated. The estimated useful life of negative goodwill is considered to be between 5 and 10 years.

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
Fixed assets are depreciated on a straight line over their estimated useful lives in the business which are considered to be-

Leasehold property - over the term of the lease or 20 years if shorter
Plant and machinery - 20% on a reducing balance basis. Or for fixed plant and machinery over the term of the lease of the property where the plant is located
Motor Vehicles - 20% on a reducing balance basis
Fixtures & fittings - 4 years straight line

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Material Change Composting Limited (Registered number: 04517359)

Notes to the 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 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 statement of financial position date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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 statement of financial position 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.

Material Change Composting Limited (Registered number: 04517359)

Notes to the 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. EMPLOYEES AND DIRECTORS

The average number of employees during the year was NIL (2020 - NIL).

4. 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
£    £   
Deferred tax 79,609 (37,242 )
Tax on profit 79,609 (37,242 )

5. DIVIDENDS
31.12.21 31.12.20
£    £   
Ordinary shares of £1 each
Interim 793,643 842,634

6. INTANGIBLE FIXED ASSETS
Goodwill
£   
COST
At 1 January 2021
and 31 December 2021 268,626
AMORTISATION
At 1 January 2021 265,268
Amortisation for year 900
At 31 December 2021 266,168
NET BOOK VALUE
At 31 December 2021 2,458
At 31 December 2020 3,358

Material Change Composting Limited (Registered number: 04517359)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2021

7. TANGIBLE FIXED ASSETS
Fixtures
Leasehold Plant and and Motor
buildings machinery fittings vehicles Totals
£    £    £    £    £   
COST
At 1 January 2021 519,328 3,642,157 5,796 62,691 4,229,972
Additions - 528,136 5,567 - 533,703
Disposals - (161,126 ) - - (161,126 )
At 31 December 2021 519,328 4,009,167 11,363 62,691 4,602,549
DEPRECIATION
At 1 January 2021 340,976 2,475,084 5,566 40,978 2,862,604
Charge for year 19,563 276,766 925 4,343 301,597
Eliminated on disposal - (143,197 ) - - (143,197 )
At 31 December 2021 360,539 2,608,653 6,491 45,321 3,021,004
NET BOOK VALUE
At 31 December 2021 158,789 1,400,514 4,872 17,370 1,581,545
At 31 December 2020 178,352 1,167,073 230 21,713 1,367,368

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Plant and
machinery
£   
COST
At 1 January 2021 759,768
Additions 296,395
Transfer to ownership (305,469 )
At 31 December 2021 750,694
DEPRECIATION
At 1 January 2021 274,049
Charge for year 107,856
Transfer to ownership (165,975 )
At 31 December 2021 215,930
NET BOOK VALUE
At 31 December 2021 534,764
At 31 December 2020 485,719

8. STOCKS
31.12.21 31.12.20
£    £   
Stocks 59,555 64,116

Material Change Composting Limited (Registered number: 04517359)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2021

9. DEBTORS
31.12.21 31.12.20
£    £   
Amounts falling due within one year:
Trade debtors 592,005 650,404
Amounts owed by group undertakings 15,466 -
Other debtors 6,690 -
Prepayments and accrued income 58,058 71,970
672,219 722,374

Amounts falling due after more than one year:
Amounts owed by group undertakings 771,767 768,837

Aggregate amounts 1,443,986 1,491,211

10. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.21 31.12.20
£    £   
Hire purchase contracts (see note 12) 147,587 156,751
Trade creditors 144,057 99,631
Amounts owed to group undertakings 19,161 -
VAT 14,082 6,394
Other creditors 28,028 73,573
Accruals and deferred income 173,848 96,013
526,763 432,362

11. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
31.12.21 31.12.20
£    £   
Hire purchase contracts (see note 12) 131,327 74,460

12. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

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

Material Change Composting Limited (Registered number: 04517359)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2021

12. LEASING AGREEMENTS - continued

Non-cancellable operating leases
31.12.21 31.12.20
£    £   
Within one year 91,750 100,799
Between one and five years 275,000 329,500
In more than five years 220,250 257,500
587,000 687,799

In addition to the above annual commitments under operating leases, under the terms of its operating leases, the Company is committed to pay product rent based on either the number of tonnes of waste processed or the gate fees earned.

13. SECURED DEBTS

The following secured debts are included within creditors:

31.12.21 31.12.20
£    £   
Hire purchase contracts 278,914 231,211

The loan notes are amounts owed to the parent company and are secured by way of a fixed and floating charge over the assets of the company. The hire purchase contracts are secured over the assets upon which the hire purchase contract relates to.

An unlimited guarantee has been given by Decoy Farm Power Limited, Helmdon Blackpits Power Limited and MC Asset Co Limited dated 30 January 2020.

14. PROVISIONS FOR LIABILITIES
31.12.21 31.12.20
£    £   
Deferred tax 248,032 168,423

Deferred
tax
£   
Balance at 1 January 2021 168,423
Accelerated capital allowances 26,423
Change in rate 53,186
Balance at 31 December 2021 248,032

15. CALLED UP SHARE CAPITAL


Allotted, issued and fully paid:
Number: Class: Nominal 31.12.21 31.12.20
value: £    £   
323,438 Ordinary £1 323,458 323,458

Material Change Composting Limited (Registered number: 04517359)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2021

16. RESERVES
Retained Share
earnings premium Totals
£    £    £   

At 1 January 2021 1,996,284 326,763 2,323,047
Profit for the year 540,988 540,988
Dividends (793,643 ) (793,643 )
At 31 December 2021 1,743,629 326,763 2,070,392

17. 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.

18. OTHER FINANCIAL COMMITMENTS

31.12.2131.12.20
£   £   
Within one year1,256,4541,196,101
Between one and five years5,025,8144,784,402
After five years1,256,4542,392,201
7,538,7228,372,704

Under operator management fee arrangements, the company is committed to paying operator, management and service fees until 21 December 2027.

19. ULTIMATE PARENT COMPANY

The immediate parent company is MC Asset Co Limited, a company incorporated in England and Wales. The ultimate parent company is AD Aggregator Platform Limited, a company incorporated in England and Wales.The smallest group of undertakings for which group accounts have been drawn up is that headed by MC Asset Co Limited and copies are available from the Registrar of Companies (www.companieshouse.gov.uk).