Company registration number 04362402 (England and Wales)
EASTERN CONCRETE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
EASTERN CONCRETE LIMITED
COMPANY INFORMATION
Director
Mr T G Baker
Company number
04362402
Registered office
Stowmarket Business Park
Ernest Nunn Road
Stowmarket
IP14 2ED
Auditor
Ensors Accountants LLP
Connexions
159 Princes Street
Ipswich
IP1 1QJ
EASTERN CONCRETE LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
EASTERN CONCRETE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The director presents the strategic report for the year ended 31 March 2023.
Review of the business
During the year the company continued to invest in its people, capital equipment and operational efficiencies. The strategic focus on higher value solutions resulted a strong Company turnover increase by 9.8% to £19.1m (2022: £17.4m). However, as a result of rising costs the profit before tax for the year has reduced to £0.4m (2022: £0.9m).
Principal risks and uncertainties
The company’s principal risks and uncertainties have been considered to be the credit worthiness of clients, pressure on margins from competition in the market, rising material prices due to inflation and interest rate increases.
Development and performance
In a challenging market of world economy, all our staff have gone above and beyond this year and this has shaped our company to be in a good place positioning with some long-term projects coming to fruition in the near future.
The company's overhead costs have increased due to commodity pricing, rising energy costs and Ukraine/Russia Conflict in comparison to the prior year.
The financial position remains strong, underpinned by the continued investment in plant and machinery, with net assets of £2,626,740 (2022: £2,526,420). Throughout the year the company has invested in £1,197,393 of fixed assets, with a further £1,448,331 committed to at the year end in anticipation of future workflows.
While financial performance, particularly in these challenging times, should always be a key concern, the focus on vision and values and on creating sustainable value for all our stakeholders has made Eastern Concrete Ltd a recognisable brand in Suffolk.
Key performance indicators
The key performance indicators on which the directors primarily focus are considered to be turnover, gross profit, EBITDA, aged debtor days, creditor levels including hire purchase balances. These are monitored on an ongoing basis and particularly within the quarterly management accounts.
Mr T G Baker
Director
25 October 2023
EASTERN CONCRETE LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
The director presents his annual report and financial statements for the year ended 31 March 2023.
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Principal activities
The principal activity of the company continued to be that of ready mix concrete manufacture.
Results and dividends
The results for the year are set out on page 8.
The directors recommend a dividend of £272,202 (2022: £305,000).
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr T G Baker
Financial instruments
Treasury operations and Financial Instruments
The company’s financial instruments comprise cash, invoice finance facility, hire purchase facilities and other items such as trade debtors and creditors arising directly from operations. The main objectives of the company’s policy towards its financial instruments is to maximise returns on cash balances, manage working capital requirements, maintain an excellent relationship with creditors and the company’s bankers, and finance ongoing operations.
The directors’ policy is to maintain a strong capital base to underpin the future development of the business. Operations are financed through invoice finance and the management of working capital. Major capital projects are financed in part through the use of hire purchase facilities.
Market risk
We do not expect any dramatic change in the current market conditions in the forthcoming period.
Interest rate risk
Rising interest rates are a risk we have to manage to the best of our ability.
Foreign currency risk
The directors consider that the company has very limited exposure to foreign exchange volatility with very few transactions outside of pound sterling. On this basis the company does not require a structured hedging policy.
Credit risk
The company undertakes credit references before credit facilities are provided. The company maintains a good level of credit control to ensure credit terms are not exceeded by an unacceptable time and to reduce the risk of bad debts.
Future developments
The company is looking to continue providing a high level of service to its customers, by providing highest quality concrete at competitive prices, delivered to site in a safe and timely fashion.
Auditor
In accordance with the company's articles, a resolution proposing that Ensors Accountants LLP be reappointed as auditor of the company will be put at a General Meeting.
EASTERN CONCRETE LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
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 company’s auditor 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 company’s auditor 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 T G Baker
Director
25 October 2023
EASTERN CONCRETE LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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. He is 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.
EASTERN CONCRETE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EASTERN CONCRETE LIMITED
- 5 -
Opinion
We have audited the financial statements of Eastern Concrete Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 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.
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 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 director's 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 director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.
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 our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
EASTERN CONCRETE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF EASTERN CONCRETE LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
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:
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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
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.
Our audit was designed to include tests of detail together with an assessment of the control environment to enable us to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement due to fraud. This included work on areas where we consider there is a higher risk of fraud including revenue recognition, management override of systems and control, transactions with related parties, commitments and contingencies and accounting estimates.
We also obtained an understanding of the legal and regulatory framework that the company operates in, through discussions with the directors and other management, and from our own knowledge and experience of the sector.
EASTERN CONCRETE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF EASTERN CONCRETE LIMITED
- 7 -
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company are complying with the legal and regulatory framework both at the planning stage and reminded to remain alert throughout the audit;
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
audited the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud;
reviewed and challenged accounting estimates to ensure no indication of management bias.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Barry Gostling
Senior Statutory Auditor
For and on behalf of Ensors Accountants LLP
27 October 2023
Chartered Accountants
Statutory Auditor
Connexions
159 Princes Street
Ipswich
IP1 1QJ
EASTERN CONCRETE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
19,125,363
17,351,697
Cost of sales
(16,570,491)
(14,593,423)
Gross profit
2,554,872
2,758,274
Administrative expenses
(2,031,702)
(1,693,821)
Other operating income
22,126
7,112
Operating profit
4
545,296
1,071,565
Interest receivable and similar income
7
1,295
Interest payable and similar expenses
8
(158,676)
(75,511)
Profit before taxation
387,915
996,054
Tax on profit
9
(15,393)
(338,545)
Profit for the financial year
372,522
657,509
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EASTERN CONCRETE LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
5,396,608
5,104,254
Current assets
Stocks
13
237,451
272,607
Debtors
14
3,477,998
2,913,902
Cash at bank and in hand
431,854
338,822
4,147,303
3,525,331
Creditors: amounts falling due within one year
15
(5,000,646)
(4,312,462)
Net current liabilities
(853,343)
(787,131)
Total assets less current liabilities
4,543,265
4,317,123
Creditors: amounts falling due after more than one year
16
(1,028,162)
(917,733)
Provisions for liabilities
Deferred tax liability
18
888,363
872,970
(888,363)
(872,970)
Net assets
2,626,740
2,526,420
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
2,626,640
2,526,320
Total equity
2,626,740
2,526,420
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved and signed by the director and authorised for issue on 25 October 2023
Mr T G Baker
Director
Company registration number 04362402 (England and Wales)
EASTERN CONCRETE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2021
100
2,173,811
2,173,911
Year ended 31 March 2022:
Profit and total comprehensive income
-
657,509
657,509
Dividends
10
-
(305,000)
(305,000)
Balance at 31 March 2022
100
2,526,320
2,526,420
Year ended 31 March 2023:
Profit and total comprehensive income
-
372,522
372,522
Dividends
10
-
(272,202)
(272,202)
Balance at 31 March 2023
100
2,626,640
2,626,740
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
1
Accounting policies
Company information
Eastern Concrete Limited is a private company limited by shares incorporated in England and Wales. The registered office is Stowmarket Business Park, Ernest Nunn Road, Stowmarket, IP14 2ED.
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. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Baker Family Holdings Limited being the smallest and largest group of which consolidated accounts are drawn up. These consolidated financial statements are available from its registered office, Stowmarket Business Park, Ernest Nunn Road, Stowmarket, Suffolk, IP14 2ED.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
Income is recognised when the concrete is either delivered to or collected by the customer.
1.4
Intangible fixed assets - goodwill
Goodwill is being written off in equal annual instalments over its estimated economic life of five years.
1.5
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.
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 12 -
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:
Plant and machinery
3 to 7 years straight line
Motor vehicles
1.5 to 7 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company 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.
1.7
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.
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.
1.8
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.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
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 company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including 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.
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
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 company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Concrete and related sales
19,125,363
17,351,697
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
3
Turnover and other revenue
(Continued)
- 16 -
2023
2022
£
£
Other revenue
Interest income
1,295
-
Grants received
-
6,487
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(6,487)
Fees payable to the company's auditor for the audit of the company's financial statements
10,200
8,250
Depreciation of owned tangible fixed assets
295,206
323,092
Depreciation of tangible fixed assets held under finance leases
364,411
322,062
Profit on disposal of tangible fixed assets
(30,709)
(34,497)
Operating lease charges
154,160
155,177
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
1
1
Fitters
5
6
Drivers and batchers
52
50
Office
17
15
Technical
2
2
Total
77
74
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,060,659
2,764,697
Social security costs
94,804
64,374
Pension costs
65,964
54,065
3,221,427
2,883,136
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
10,080
9,600
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1,295
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
75,556
36,626
Other interest
83,120
38,885
158,676
75,511
9
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
15,393
338,545
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:
2023
2022
£
£
Profit before taxation
387,915
996,054
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
73,704
189,250
Tax effect of expenses that are not deductible in determining taxable profit
195
5,454
Effect of change in corporation tax rate
209,513
Group relief
14,795
Permanent capital allowances in excess of depreciation
(60,400)
(80,467)
Other
1,894
Taxation charge for the year
15,393
338,545
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
10
Dividends
2023
2022
£
£
Interim paid
272,202
305,000
11
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2022 and 31 March 2023
66,500
Amortisation and impairment
At 1 April 2022 and 31 March 2023
66,500
Carrying amount
At 31 March 2023
At 31 March 2022
12
Tangible fixed assets
Plant and machinery
Motor vehicles
Total
£
£
£
Cost
At 1 April 2022
2,162,632
8,030,513
10,193,145
Additions
5,160
1,192,233
1,197,393
Disposals
(164,408)
(579,107)
(743,515)
At 31 March 2023
2,003,384
8,643,639
10,647,023
Depreciation and impairment
At 1 April 2022
1,378,551
3,710,340
5,088,891
Depreciation charged in the year
84,885
574,732
659,617
Eliminated in respect of disposals
(144,408)
(353,685)
(498,093)
At 31 March 2023
1,319,028
3,931,387
5,250,415
Carrying amount
At 31 March 2023
684,356
4,712,252
5,396,608
At 31 March 2022
784,081
4,320,173
5,104,254
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
12
Tangible fixed assets
(Continued)
- 19 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
474,534
534,448
Motor vehicles
2,371,530
2,272,880
2,846,064
2,807,328
13
Stocks
2023
2022
£
£
Raw materials and consumables
237,451
272,607
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,991,013
2,795,369
Other debtors
1,310
Prepayments and accrued income
486,985
117,223
3,477,998
2,913,902
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
17
619,901
535,592
Trade creditors
2,610,710
2,715,568
Taxation and social security
180,340
265,893
Other creditors
1,589,695
795,409
5,000,646
4,312,462
The hire purchase creditors are secured on the specifically financed asset.
Included within other creditors is £1,508,156 (2022: £762,460) which is secured by an all assets debenture.
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
1,028,162
917,733
The hire purchase creditors are secured on the specifically financed asset.
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
690,251
581,021
In two to five years
1,087,251
953,201
1,777,502
1,534,222
Less: future finance charges
(129,439)
(80,897)
1,648,063
1,453,325
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is five years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,151,809
996,801
Tax losses
(263,446)
(123,831)
888,363
872,970
2023
Movements in the year:
£
Liability at 1 April 2022
872,970
Charge to profit or loss
15,393
Liability at 31 March 2023
888,363
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
65,964
54,065
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100
21
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
150,965
114,631
Between two and five years
62,143
79,608
213,108
194,239
22
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
1,448,331
-
Included within capital commitments is £372,089 (2022: £Nil) which has been recognised within debtors.
23
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
At the year end the company was owed £1,723 by the directors (2022 £1,046) in respect of their interest free, repayable on demand loan accounts.
The company has provided the bank a guarantee of £1,015,000 (2022: £1,015,000) in respect of the borrowings of its parent company.
EASTERN CONCRETE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
23
Related party transactions
(Continued)
- 22 -
Other information
The director has taken advantage of the exemptions available under FRS 102 to not disclose balances or transactions with wholly owned members of the group.
During the year the company had sales of £49,897 (2022: £Nil) and purchases of £1,147,276 (2022: £73,455) with other related parties.
At the balance sheet date, the company owed £115,229 (2022: £88,146) to other related parties.
24
Ultimate controlling party
The parent company of Eastern Concrete Limited is Baker Family Holdings Limited and its registered office is Stowmarket Business Park, Ernest Nunn Road, Stowmarket, Suffolk, IP14 2ED.
There is no ultimate controlling party by virtue of no one shareholder owning >50% of the shares in the parent company.
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