Company registration number 02871295 (England and Wales)
ECO FILTERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
ECO FILTERS LIMITED
COMPANY INFORMATION
Directors
Mr R I Colclough
Mr P F McGowan
Mrs L McGowan
Mrs D A McGowan
Mr E B Hine
Secretary
Ms L Lees
Company number
02871295
Registered office
33a St Peters Street
Radford
Nottingham
NG7 3EN
Auditor
HSKSG Audit
3rd Floor
Butt Dyke House
33 Park Row
Nottingham
NG1 6EE
Business address
33a St Peters Street
Radford
Nottingham
NG7 3EN
ECO FILTERS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Income statement
8
Group statement of comprehensive income
9
Group statement of financial position
10
Company statement of financial position
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 34
ECO FILTERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

The directors present the strategic report for the year ended 31 December 2022.

Review of the business

The year 2022 has shown a 9% increase in group turnover with business in our FZCO (Dubai) subsidiary bouncing back with a 27% increase in turnover and a 26% increase in net profit contributing £398,000 for the group (before foreign currency translation gains),compensating substantially to the fall in the profitability of the parent company.

 

Overall, group profitability is good and at a similar level to that achieved in 2021.

 

The group acquired Allton Warping Limited during the year, ensuring continuity of supply of yarn warping services, and this subsidiary has moved into profit in 2023, due in no small part to the 16% price increase we applied when we got to grips with the company’s costs.

Principal risks and uncertainties

Post the financial year end, stagnation of the UK economy, particularly in the building industry, has had a serious effect on the parent company in 2023 with a fall in turnover of over 10%. The situation continues to be volatile month on month and is disappointing, but the parent company is still well in profit and we will just have to weather the storm.

 

However, growth in turnover at FZCO continues to be strong in 2023 and Allton Warping is also now in profit.

Development and performance

The mezzanine floor is at last installed in Dubai and will help in producing the continuing increases in output.

 

The taking back of the currently leased out space at our (UK) Deakins Place premises will give us space to expand, where we have been cramped for some time in the main factory. There is likely to still be a rental income, although smaller than at present. Refurbishment costs are likely to be high but that cannot be avoided if we want to make good use of the space.

Key performance indicators

Despite a 3.75% fall in gross profit percentage, as compared to 2021, as a group we are strong despite the UK slow down, which is beyond our control. We are taking all steps necessary to contain costs and streamline production at all our plants. Our workforce is loyal, many of longstanding and once the UK economy improves, we expect to see a return to higher group profits.

On behalf of the board

Mr P F McGowan
Director
27 September 2023
ECO FILTERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company and group continued to be that of preparation and spinning of textile fibres and other specialised construction activities not elsewhere classified.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £553,226. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr R I Colclough
Mr P F McGowan
Mrs L McGowan
Mrs D A McGowan
Mr E B Hine
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr P F McGowan
Director
27 September 2023
ECO FILTERS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

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

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

ECO FILTERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ECO FILTERS LIMITED
- 4 -

Qualified opinion on financial statements

We have audited the financial statements of Eco Filters Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including 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, except for the possible effects of the matter described in the basis for qualified opinion paragraph, the financial statements:

Basis for qualified opinion

The consolidated financial statements include the results, assets and liabilities of a subsidiary company, Eco Filters FZCO, and we were unable to obtain sufficient appropriate audit evidence relating to the audit work undertaken by the auditor of this subsidiary company for the year ended 31 December 2022. However, the auditor's report of the subsidiary company confirmed that the financial statements gave a true and fair view of the financial position of the subsidiary as at 31 December 2022 and of its financial performance and its cash flow for the year then ended. Included in the group consolidated position as at 31 December 2022 is net profit for the year after taxation of £599,300 and net assets of £1,858,785 relating to this subsidiary. Accordingly, we have been unable to determine the value of any corresponding effects on the group results for the year ended 31 December 2022 or the group net asset position at that date.

 

Similarly, we were unable to obtain sufficient appropriate audit evidence relating to the audit work undertaken by the auditor of Eco Filters FZCO for the year ended 31 December 2021. However, the auditors report of this subsidiary company confirmed that the financial statements gave a true and fair view of the financial position of the subsidiary as at 31 December 2021 and of its financial performance and cash flow for the year then ended. Included in the consolidated position as at 31 December 2021 is net profit for the year after taxation of £212,580 and net assets of £1,575,030 relating to this subsidiary. Accordingly, we have been unable to determine the value of any corresponding effects on the group results for the year ended 31 December 2022.

 

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 qualified 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 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.

ECO FILTERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ECO FILTERS LIMITED
- 5 -

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

As described in the basis for qualified opinion section of our report, we were unable to obtain sufficient appropriate audit evidence relating to the work undertaken by the auditor of the subsidiary company, Eco Filters FZCO, for the year ended 31 December 2022. We have concluded that reference to the results for the year ended 31 December 2022 may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matters described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of our audit:

 

Matters on which we are required to report by exception

Except for the matters described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

Arising solely from the limitation in the scope of our work relating to results, assets and liabilities of a subsidiary in the consolidated financial statements, referred to above;

 

 

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

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 is 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.

ECO FILTERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ECO FILTERS LIMITED
- 6 -
Auditor's 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 an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

We considered the nature of the group's business and its control environment. We also enquired of management about their identification and assessment of the risks of irregularities.

 

We obtained an understanding of the legal and regulatory framework in which the group operates and identified key laws and regulations that:

 

- Had a direct effect on the determination of material amounts and disclosures in the financial statements, which included the Companies Act 2006, tax legislation and payroll legislation; and

 

- Did not have a direct effect on the financial statements but compliance with which may be fundamental to the group's ability to operate.

 

We discussed among the audit engagement team the opportunities and incentives that may exist within the organisation for fraud and how / where fraud might occur in the financial statements.

In common with all audits under ISA's (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of accounting adjustments and journal entries, assessed whether accounting estimates were reasonable and accurate and reviewed the accounting records for any significant and unusual transactions.

 

In addition, our procedures to respond to the risks identified included:

- Reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provision of relevant laws and regulations described as having a direct effect on the financial statements;

- Performing analytical procedures to identify any unusual or unexpected variances that may indicate risks of material misstatement due to fraud; and

- Enquiring of management about any instances of non-compliance with laws and regulations and any instances of known or suspected fraud.

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

ECO FILTERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ECO FILTERS LIMITED
- 7 -
Philip Handley FCA (Senior Statutory Auditor)
For and on behalf of HSKSG Audit
29 September 2023
Chartered Accountants
Statutory Auditor
3rd Floor
Butt Dyke House
33 Park Row
Nottingham
NG1 6EE
ECO FILTERS LIMITED
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
5,955,043
5,464,809
Cost of sales
(2,542,774)
(2,128,021)
Gross profit
3,412,269
3,336,788
Distribution costs
(3,355)
-
0
Administrative expenses
(1,683,810)
(1,620,655)
Other operating income
45,710
41,504
Operating profit
4
1,770,814
1,757,637
Interest receivable and similar income
8
6,484
3,421
Profit before taxation
1,777,298
1,761,058
Tax on profit
9
(276,544)
(313,398)
Profit for the financial year
24
1,500,754
1,447,660
Profit for the financial year is all attributable to the owners of the parent company.
ECO FILTERS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
£
£
Profit for the year
1,500,754
1,447,660
Other comprehensive income
-
-
Total comprehensive income for the year
1,500,754
1,447,660
Total comprehensive income for the year is all attributable to the owners of the parent company.
ECO FILTERS LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
11
92,435
-
0
Tangible assets
12
1,879,884
1,823,293
Investment property
13
1,049,794
1,049,794
3,022,113
2,873,087
Current assets
Stocks
16
787,493
731,249
Debtors
17
1,737,633
1,421,929
Cash at bank and in hand
1,763,170
2,329,307
4,288,296
4,482,485
Creditors: amounts falling due within one year
18
(793,356)
(880,048)
Net current assets
3,494,940
3,602,437
Total assets less current liabilities
6,517,053
6,475,524
Provisions for liabilities
Provisions
19
-
0
151,411
Deferred tax liability
20
130,760
49,498
(130,760)
(200,909)
Net assets
6,386,293
6,274,615
Capital and reserves
Called up share capital
22
1,000
1,166
Capital redemption reserve
23
750
584
Profit and loss reserves
24
6,384,543
6,272,865
Total equity
6,386,293
6,274,615

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 27 September 2023 and are signed on its behalf by:
27 September 2023
Mr P F McGowan
Director
Company registration number 02871295 (England and Wales)
ECO FILTERS LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
31 December 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
1,777,371
1,699,912
Investment property
13
1,049,794
1,049,794
Investments
14
291,376
54,332
3,118,541
2,804,038
Current assets
Stocks
16
607,984
538,284
Debtors
17
1,089,802
986,087
Cash at bank and in hand
383,567
1,225,092
2,081,353
2,749,463
Creditors: amounts falling due within one year
18
(815,397)
(804,418)
Net current assets
1,265,956
1,945,045
Total assets less current liabilities
4,384,497
4,749,083
Provisions for liabilities
Deferred tax liability
20
130,760
49,498
(130,760)
(49,498)
Net assets
4,253,737
4,699,585
Capital and reserves
Called up share capital
22
1,000
1,166
Capital redemption reserve
23
750
584
Profit and loss reserves
24
4,251,987
4,697,835
Total equity
4,253,737
4,699,585

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £943,228 (2021 - £1,235,078 profit).

These abbreviated accounts have been prepared in accordance with the special provisions in section 445(3) of the Companies Act 2006 relating to medium-sized companies.true

The financial statements were approved by the board of directors and authorised for issue on 27 September 2023 and are signed on its behalf by:
27 September 2023
Mr P F McGowan
Director
Company registration number 02871295 (England and Wales)
ECO FILTERS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
1,500
250
6,493,505
6,495,255
Year ended 31 December 2021:
Profit and total comprehensive income
-
-
1,447,660
1,447,660
Own shares acquired
-
-
(1,668,300)
(1,668,300)
Redemption of shares
22
(334)
334
-
-
0
Balance at 31 December 2021
1,166
584
6,272,865
6,274,615
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
1,500,754
1,500,754
Dividends
10
-
-
(553,226)
(553,226)
Own shares acquired
-
-
(835,850)
(835,850)
Redemption of shares
22
(166)
166
-
-
0
Balance at 31 December 2022
1,000
750
6,384,543
6,386,293
ECO FILTERS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
1,500
250
5,131,057
5,132,807
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
1,235,078
1,235,078
Own shares acquired
-
-
(1,668,300)
(1,668,300)
Redemption of shares
22
(334)
334
-
-
0
Balance at 31 December 2021
1,166
584
4,697,835
4,699,585
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
943,228
943,228
Dividends
10
-
-
(553,226)
(553,226)
Own shares acquired
-
-
(835,850)
(835,850)
Redemption of shares
22
(166)
166
-
-
0
Balance at 31 December 2022
1,000
750
4,251,987
4,253,737
ECO FILTERS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
1,512,231
1,924,275
Income taxes paid
(373,318)
(210,846)
Net cash inflow from operating activities
1,138,913
1,713,429
Investing activities
Purchase of intangible assets
(102,706)
-
Purchase of tangible fixed assets
(217,322)
(209,639)
Proceeds from disposal of tangible fixed assets
(2,430)
17,202
Interest received
6,484
3,421
Net cash used in investing activities
(315,974)
(189,016)
Financing activities
Purchase of own shares
(835,850)
(1,668,300)
Dividends paid to equity shareholders
(553,226)
-
0
Net cash used in financing activities
(1,389,076)
(1,668,300)
Net decrease in cash and cash equivalents
(566,137)
(143,887)
Cash and cash equivalents at beginning of year
2,329,307
2,473,194
Cash and cash equivalents at end of year
1,763,170
2,329,307
ECO FILTERS LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,371,793
1,667,771
Income taxes paid
(387,005)
(210,846)
Net cash inflow from operating activities
984,788
1,456,925
Investing activities
Purchase of tangible fixed assets
(202,620)
(112,065)
Purchase of subsidiaries
(237,044)
-
0
Interest received
2,427
197
Net cash used in investing activities
(437,237)
(111,868)
Financing activities
Purchase of own shares
(835,850)
(1,668,300)
Dividends paid to equity shareholders
(553,226)
-
Net cash used in financing activities
(1,389,076)
(1,668,300)
Net decrease in cash and cash equivalents
(841,525)
(323,243)
Cash and cash equivalents at beginning of year
1,225,092
1,548,335
Cash and cash equivalents at end of year
383,567
1,225,092
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
1
Accounting policies
Company information

Eco Filters Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 33a St Peters Street, Radford, Nottingham, NG7 3EN.

 

The group consists of Eco Filters Limited and all of its subsidiaries.

1.1
Accounting convention

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.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Eco Filters Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -

Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

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

 

During the year under review, the COVID-19 pandemic has continued to be a significant risk to the global economy. The directors continue to monitor the impact on the business on an ongoing basis.

 

At the time of approving these financial statements, the directors do not consider COVID-19 to impact the company's ability to continue as a going concern and considers the balance sheet to be appropriately valued. The directors note this is a non-adjusting post balance sheet event.

1.5
Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

1.6
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.8
Tangible fixed assets

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

ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold property
2% straight line
Leasehold property
2% straight line on land & building over period of lease
Plant and machinery
15% straight line
Fixtures, fittings and equipment
25% straight line
Computers
25% straight line
Motor vehicles
25% straight line

Assets under construction included within tangible fixed assets are not depreciated until they have been commissioned and are in use.

 

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 recognised in the income statement.

1.9
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.12
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.13
Cash and cash equivalents

Cash and cash equivalents 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.

ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -
1.14
Financial instruments

The group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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, 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.

 

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.

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 group 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 group after deducting all of its liabilities.

ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 21 -
Basic financial liabilities

Basic financial liabilities, including creditors, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

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.

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 through 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group 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 group.

1.16
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 income statement 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 22 -
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.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.17
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.18
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.

1.19
Retirement benefits

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

1.20
Leases

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 leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.21
Foreign exchange

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.

ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
3,967,764
4,256,505
Rest of the world
1,987,279
1,208,304
5,955,043
5,464,809
2022
2021
£
£
Other revenue
Interest income
6,484
3,421
4
Operating profit
2022
2021
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange (gains)/losses
(175,347)
39,196
Research and development costs
6,829
6,602
Depreciation of owned tangible fixed assets
162,561
142,124
Loss/(profit) on disposal of tangible fixed assets
600
(11,912)
Amortisation of intangible assets
10,271
-
Operating lease charges
105,174
88,001
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,750
5,500
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Directors
5
5
5
4
Factory and administration staff
66
52
44
37
Total
71
57
49
41

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
1,822,617
1,585,942
1,553,943
1,438,051
Social security costs
155,265
122,043
147,188
122,043
Pension costs
76,289
64,453
74,322
64,453
2,054,171
1,772,438
1,775,453
1,624,547
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
255,427
251,505
Company pension contributions to defined contribution schemes
33,575
29,066
289,002
280,571

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2021 - 2).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
190,628
196,322
Company pension contributions to defined contribution schemes
33,194
28,694
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
6,182
3,421
Other interest income
302
-
Total income
6,484
3,421
2022
2021
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
6,182
3,421
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
242,208
292,815
Adjustments in respect of prior periods
(46,927)
16,425
Total current tax
195,281
309,240
Deferred tax
Origination and reversal of timing differences
81,263
4,158
Total tax charge
276,544
313,398

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2022
2021
£
£
Profit before taxation
1,777,298
1,761,058
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
337,687
334,601
Tax effect of expenses that are not deductible in determining taxable profit
526
1,186
Tax effect of income not taxable in determining taxable profit
4,802
-
0
Adjustments in respect of prior years
(46,927)
16,425
Depreciation in excess of capital allowances
13,061
-
0
Deferred tax
81,263
4,158
Other adjustments
(113,868)
(42,972)
Taxation charge
276,544
313,398
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
10
Dividends
2022
2021
Recognised as distributions to equity holders:
£
£
Interim paid
553,226
-
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2022
-
0
Additions
102,706
At 31 December 2022
102,706
Amortisation and impairment
At 1 January 2022
-
0
Amortisation charged for the year
10,271
At 31 December 2022
10,271
Carrying amount
At 31 December 2022
92,435
At 31 December 2021
-
0
The company had no intangible fixed assets at 31 December 2022 or 31 December 2021.
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 27 -
12
Tangible fixed assets
Group
Freehold property
Leasehold property
Plant and machinery
Fixtures, fittings and equipment
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 January 2022
1,223,610
493,424
1,781,766
76,189
20,743
79,446
3,675,178
Additions
-
0
-
0
185,902
30,472
948
-
0
217,322
Disposals
-
0
-
0
(12,000)
-
0
-
0
-
0
(12,000)
Transfers
-
0
-
0
101,516
2,633
-
0
-
0
104,149
At 31 December 2022
1,223,610
493,424
2,057,184
109,294
21,691
79,446
3,984,649
Depreciation and impairment
At 1 January 2022
190,217
199,155
1,332,801
69,210
18,306
42,196
1,851,885
Depreciation charged in the year
10,659
9,868
117,689
6,115
1,230
17,000
162,561
Eliminated in respect of disposals
-
0
-
0
(11,400)
-
0
-
0
-
0
(11,400)
Transfers
-
0
-
0
99,681
2,038
-
0
-
0
101,719
At 31 December 2022
200,876
209,023
1,538,771
77,363
19,536
59,196
2,104,765
Carrying amount
At 31 December 2022
1,022,734
284,401
518,413
31,931
2,155
20,250
1,879,884
At 31 December 2021
1,033,393
294,269
448,965
6,979
2,437
37,250
1,823,293
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
Company
Freehold property
Leasehold property
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
£
£
Cost
At 1 January 2022
1,223,610
493,424
1,620,254
62,746
3,400,034
Additions
-
0
-
0
182,633
19,987
202,620
Disposals
-
0
-
0
(12,000)
-
0
(12,000)
At 31 December 2022
1,223,610
493,424
1,790,887
82,733
3,590,654
Depreciation and impairment
At 1 January 2022
190,217
199,155
1,254,990
55,760
1,700,122
Depreciation charged in the year
10,659
9,868
99,559
4,475
124,561
Eliminated in respect of disposals
-
0
-
0
(11,400)
-
0
(11,400)
At 31 December 2022
200,876
209,023
1,343,149
60,235
1,813,283
Carrying amount
At 31 December 2022
1,022,734
284,401
447,738
22,498
1,777,371
At 31 December 2021
1,033,393
294,269
365,264
6,986
1,699,912
13
Investment property
Group
Company
2022
2022
£
£
Fair value
At 1 January 2022 and 31 December 2022
1,049,794
1,049,794
14
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
291,376
54,332
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
14
Fixed asset investments
(Continued)
- 29 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022
54,332
Additions
237,044
At 31 December 2022
291,376
Carrying amount
At 31 December 2022
291,376
At 31 December 2021
54,332
15
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Eco Filters FZCO
Post Pox 262319, Warehouse FZSI BE-04, Jabel Ali, South Zone 1, Dubai, United Arab Emirates
Ordinary shares
100.00
16
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Raw materials and consumables
637,387
575,300
457,878
382,335
Work in progress
90,481
121,677
90,481
121,677
Finished goods and goods for resale
59,625
34,272
59,625
34,272
787,493
731,249
607,984
538,284
17
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,267,185
1,354,083
981,432
944,079
Corporation tax recoverable
66,116
-
0
66,116
-
0
Amounts owed by group undertakings
315,818
-
273
-
Other debtors
39,538
26,065
16,290
15,582
Prepayments and accrued income
48,976
41,781
25,691
26,426
1,737,633
1,421,929
1,089,802
986,087
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
18
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Trade creditors
(109,397)
359,340
155,771
311,062
Amounts owed to group undertakings
315,818
-
0
315,545
-
0
Corporation tax payable
90,895
202,815
77,208
202,815
Other taxation and social security
140,036
139,454
109,590
139,454
Other creditors
170,514
6,370
6,470
6,370
Accruals and deferred income
185,490
172,069
150,813
144,717
793,356
880,048
815,397
804,418
19
Provisions for liabilities
Group
Company
2022
2021
2022
2021
£
£
£
£
Provision for employees' end of service benefits
-
151,411
-
-
Movements on provisions:
Total
Group
£

Eco Filters FZCO operates an end of service benefits scheme in accordance with the requirements of the UAE Labour Laws. This is an unfunded defined benefits retirement plan. Employees are entitled to benefits based on the length of service and final remuneration. Accrued employees' terminal benefits are payable on termination of employment.

20
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2022
2021
Group
£
£
Accelerated capital allowances
130,760
49,498
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
20
Deferred taxation
(Continued)
- 31 -
Liabilities
Liabilities
2022
2021
Company
£
£
Accelerated capital allowances
130,760
49,498
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 January 2022
49,498
49,498
Charge to profit or loss
81,262
81,262
Liability at 31 December 2022
130,760
130,760
21
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
76,289
64,453

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

22
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary of £1 each
500
583
500
583
B Ordinary of £1 each
500
583
500
583
1,000
1,166
1,000
1,166

On 3 November 2022, the company purchased and cancelled 166 Deferred B Shares.

ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 32 -
23
Capital redemption reserve
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning of the year
584
250
584
250
Transfers
166
334
166
334
At the end of the year
750
584
750
584
24
Profit and loss reserves
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning of the year
6,272,865
6,493,505
4,697,835
5,131,057
Profit for the year
1,500,754
1,447,660
943,228
1,235,078
Dividends
(553,226)
-
(553,226)
-
Own shares acquired
(835,850)
(1,668,300)
(835,850)
(1,668,300)
At the end of the year
6,384,543
6,272,865
4,251,987
4,697,835
25
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
10,794
14,091
10,794
14,091
Between two and five years
2,780
14,876
2,780
14,876
In over five years
27,105
27,800
27,105
27,800
40,679
56,767
40,679
56,767
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 33 -
26
Cash generated from group operations
2022
2021
£
£
Profit for the year after tax
1,500,754
1,447,660
Adjustments for:
Taxation charged
276,544
313,398
Investment income
(6,484)
(3,421)
Loss/(gain) on disposal of tangible fixed assets
600
(11,912)
Amortisation and impairment of intangible assets
10,271
-
Depreciation and impairment of tangible fixed assets
162,561
142,124
(Decrease)/increase in provisions
(151,411)
22,792
Movements in working capital:
Increase in stocks
(56,244)
(156,854)
Increase in debtors
(249,588)
(25,499)
Increase in creditors
25,228
195,987
Cash generated from operations
1,512,231
1,924,275
27
Cash generated from operations - company
2022
2021
£
£
Profit for the year after tax
943,228
1,235,078
Adjustments for:
Taxation charged
276,544
313,398
Investment income
(2,427)
(197)
Loss on disposal of tangible fixed assets
600
-
Depreciation and impairment of tangible fixed assets
124,561
120,153
Movements in working capital:
Increase in stocks
(69,700)
(114,352)
Increase in debtors
(37,599)
(32,052)
Increase in creditors
136,586
145,743
Cash generated from operations
1,371,793
1,667,771
28
Analysis of changes in net funds - group
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
2,329,307
(566,137)
1,763,170
ECO FILTERS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 34 -
29
Analysis of changes in net funds - company
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
1,225,092
(841,525)
383,567
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