Company Registration No. 10841427 (England and Wales)
POTTERS (MIDLANDS) LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
PAGES FOR FILING WITH REGISTRAR
POTTERS (MIDLANDS) LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 10
POTTERS (MIDLANDS) LIMITED
BALANCE SHEET
AS AT
30 APRIL 2023
30 April 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
4
4,104,932
4,539,663
Current assets
Stocks
11,673
11,788
Debtors
5
574,398
1,467,141
Cash at bank and in hand
236,265
426,778
822,336
1,905,707
Creditors: amounts falling due within one year
6
(1,148,451)
(2,523,288)
Net current liabilities
(326,115)
(617,581)
Total assets less current liabilities
3,778,817
3,922,082
Creditors: amounts falling due after more than one year
7
(29,732)
(161,585)
Provisions for liabilities
9
(2,906,604)
(2,998,833)
Net assets
842,481
761,664
Capital and reserves
Called up share capital
1,000
1,000
Profit and loss reserves
841,481
760,664
Total equity
842,481
761,664
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 31 January 2024 and are signed on its behalf by:
Mr O A Hill
Director
Company registration number 10841427 (England and Wales)
POTTERS (MIDLANDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
- 2 -
1
Accounting policies
Company information
Potters (Midlands) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Grange Lane, Redhill, Telford, Shropshire, TF2 9PB.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
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’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Potter's Waste Management Limited. These consolidated financial statements are available from its registered office, Potter Group, Potter House, Henfaes Lane, Welshpool, Powys, SY21 7BE.
1.2
Turnover
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company, and the revenue can be reliably measured once the goods or services are provided to the customer. Income from waste disposal is recognised at the point of disposal. Income from landfill activities include landfill tax at the prevailing rate. Turnover is measured at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes with the exception of landfill tax.
1.3
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.
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:
Landfill site
On the basis of voidspace used allowing for residual value
Leasehold improvements
3 years straight line
Plant and equipment
5-33% both reducing balance and straight line
POTTERS (MIDLANDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 3 -
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.
1.4
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
1.5
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell, after making allowance for obsolete and slow moving items.
1.6
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.
1.7
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.
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.
POTTERS (MIDLANDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 4 -
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.
1.8
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.
1.9
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.
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 profit and loss account, 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 when the company has 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.
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company 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.
POTTERS (MIDLANDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 5 -
Provisions are in place for environmental and landfill costs, these include provisions associated with the closure and post closure of the landfill site. The company estimates its total future requirements for closure costs and post closure monitoring and maintenance of the site after the anticipated closure.
A provision is made for the final capping, inspection, monitoring, operating and maintenance costs to be incurred during the period after which the site closes.
Post closure provisions have been shown at net present value. The current cost estimate has been inflated for the current year at 7.8% (2022: 4.1%) and discounted by 7.75% (2022: 7.25%). The unwinding of the discount element is shown in the financial statements as a financial item.
The company provides for full closure costs as the void space is used. In accordance with FRS 102 Section 21, full provision has been made for the company's minimum unavoidable costs. The company estimated there costs to be incurred over the next 36 years.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
POTTERS (MIDLANDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 6 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Provisions
Provisions are in place for environmental and landfill costs, these include provisions associated with the closure and post closure of the landfill site. The company estimates its total future requirements for closure costs and post closure monitoring and maintenance of the site after the anticipated closure. Actual costs, interest rates and capacity can vary.
Carrying values of tangible fixed assets
The company depreciates tangible assets over their estimated useful lives based on void space filled and historic performance. The actual lives can vary based on filling capacity and utilisation of assets.
3
Employees
The average monthly number of persons employed by the company during the year was:
2023
2022
Number
Number
Total
6
9
POTTERS (MIDLANDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 7 -
4
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 May 2022
3,964,024
2,947,845
6,911,869
Additions
27,454
1,398,916
1,426,370
Disposals
(6,768)
(418,040)
(424,808)
At 30 April 2023
3,984,710
3,928,721
7,913,431
Depreciation and impairment
At 1 May 2022
981,095
1,391,111
2,372,206
Depreciation charged in the year
465,311
1,119,699
1,585,010
Eliminated in respect of disposals
(148,717)
(148,717)
At 30 April 2023
1,446,406
2,362,093
3,808,499
Carrying amount
At 30 April 2023
2,538,304
1,566,628
4,104,932
At 30 April 2022
2,982,929
1,556,734
4,539,663
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
228,864
908,150
Other debtors
345,534
558,991
574,398
1,467,141
6
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
421,364
515,107
Amounts owed to group undertakings
739,692
Corporation tax
129,042
87,878
Other taxation and social security
300,613
233,734
Other creditors
297,432
946,877
1,148,451
2,523,288
POTTERS (MIDLANDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 8 -
7
Creditors: amounts falling due after more than one year
2023
2022
£
£
Other creditors
29,732
161,585
The charges previously held by HSBC UK Bank PLC were satisfied on 28 April 2023.
On 28 April 2023 Potter's Waste Management Limited registered a fixed and floating charge over the assets of Potters (Midlands) Limited.
8
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
25,180
120,194
In two to five years
29,732
161,585
54,912
281,779
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 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
9
Provisions for liabilities
2023
2022
£
£
Landfill related provisions
2,840,140
2,891,596
Deferred tax liabilities
66,464
107,237
2,906,604
2,998,833
A provision has been made for the capping, closure and post closure costs in relation to the landfill site restoration and maintenance in accordance with the accounting policy set out in note 1.10. The company expects these costs to be incurred over the next 36 years.
POTTERS (MIDLANDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
9
Provisions for liabilities
(Continued)
- 9 -
Movements on provisions apart from deferred tax liabilities:
Landfill related provisions
£
At 1 May 2022
2,891,596
Utilisation of provision
(51,456)
At 30 April 2023
2,840,140
POTTERS (MIDLANDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 10 -
10
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
The senior statutory auditor was Timothy Mitchell BSc FCA.
The auditor was Xeinadin Audit Limited.
11
Ultimate controlling party
The ultimate controlling party of Potters (Midlands) Limited was Mr J Potter, the shareholder of Potter's Waste Management Limited, as a result of controlling 100% of the issued share capital of Potters (Midlands) Limited up until 28 April 2023.
Redhill Contractors Limited acquired 100% of the share capital of Potters (Midlands) Limited on 28 April 2023. From this date the ultimate controlling party is considered to be Mr O A Hill, the shareholder of Redhill Contractors Limited, a company registered in England and Wales. The registered office is 1 Royal Terrace, Southend-On-Sea, England, SS1 1EA.
12
Related party transactions
2023
2022
£
£
Services charged and goods sold
3,414,805
5,229,226
Services and goods purchased
248,584
254,365
Amount due from related parties
50,924
2,677,227
Amount due to related parties
-
2,455,976
No interest is charged on balances between related companies.
Transactions with Mr J Potter
In addition to the above, during the year the company advanced £nil (2022: £8,658) to Mr J Potter. Mr J Potter repaid £nil (2022: £14,291) to the company. At 30 April 2023 the company was owed £nil (2022: £nil) by Mr J Potter.
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