The directors present the strategic report for the year ended 31 August 2023.
Inflationary pressures and the resulting monetary policy actions to curb them dictated the terms of the years trading. Expectations of improving volumes abated quickly as household incomes were squeezed, few sectors of the construction industry were unaffected. The Plasmor Group’s unique access to high quality aggregates from industry leading processes locates Plasmor ahead of the game in terms of our capacity to satisfy customer demand for high quality lightweight aggregate blocks and concrete block paving utilising in house raw materials.
Against the backdrop of economic turmoil and uncertainty the improved final results positively demonstrate the business’ resilience. Rapid decision making and action, reflective of the Plasmor Group’s flexibility, paid enormous dividends and operations were rescaled to better reflect the cost pressures of the challenging market. The company remains well-resourced and able to maintain necessary levels of investment in plant, machinery and operational infrastructure to ensure high quality, sustainable products and first-class service. Ongoing development of value-added paving products looks to facilitate growth via differentiation and quality using state of the art manufacturing assets.
These do not alter much from year to year. They are:
1) The impact of general economic trends upon the construction industry in general and the housing market in particular.
2) The direct and indirect impact of climate change (reflected in energy and transport costs, building regulations and changes in building methods).
3) The effect of consolidation within the supply chain, including suppliers, customers and competitors.
4) The burden of regulation and red tape, which is felt badly by businesses of our size.
We manage these risks by having a well-diversified base of business partners (both suppliers and customers), by having a proportion of our material supply in our ownership, by active product development and certification programmes, and by having a management structure, including active "hands-on" directors, capable of a rapid response to changing conditions. All this is backed up by a disciplined approach to the market and by high standards of product quality and customer service.
In order to maintain the company's position as a market leader in quality concrete products, a continuing research and development programme is carried out. The accounting policy is described in note 1 to the financial statements.
In managing our business, we have a number of key indicators that we use, in addition to the management accounts, to measure and manage the performance of the business. These include, output, energy consumption, labour cost and individual product profitability. These measures are monitored on a weekly and monthly basis and communicated to the relevant managers in the business to take remedial action where required.
Taking our Corporate and Social Responsibility very seriously we also monitor performance in other key areas including Sustainability, Environmental Impact, H&S, Staff Wellbeing and Equality.
This is not a complex business. The KPI’s presented here are part of a much wider reporting framework that enables the directors to understand the development, performance and position of the business.
Profit margin: 6.02% (2022 - 5.16%) is the ratio of PBT over turnover.
Liquidity ratio: 2.99 (2022 - 2.51) is the ratio Current Assets less Stocks over Current Liabilities
Net cash flow from operating activities: £12m (2022 - (£1)m).
The company does not actively use financial instruments as part of its financial risk management. It is exposed to the usual credit and cash flow risk associated with selling on credit and manages this through credit control procedures. The nature of its financial instruments means that they are not subject to a price risk or liquidity risk.
Challenges will remain throughout 2024. Although inflationary pressures have eased, residual high-cost bases and interest rates will continue to impact housebuilding and wider construction. Opportunities for volume growth will be limited. Consequentially as businesses and individuals across the economic spectrum continue to struggle, competition for reduced volumes will continue to exert pressure on prices. Plasmor’s strong cash flows, continued focus on cost control coupled with the continuing financial flexibility of our manufacturing operations make us well positioned to respond to the challenges and take advantage of opportunities as and when they arise.
Directors' duties and responsibilities
All decisions taken by the Board are done so in the context of the group’s long-term prospects. During the reporting period the focus was to guide the business through the pandemic: protect staff, manage existing operations, and continue investment with a view to growth when normality resumes. When performance allows, staff participate in a generous profit share scheme which encourages focus on productivity and value for money.
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests. Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance. The company is committed to staff development and all staff receive continual appropriate training.
Mindful of environmental responsibilities the group operates with ISO 14001 accreditation. Energy consumption and carbon emissions are monitored with a view to satisfying our SECR responsibilities, maximising efficiency and minimising our carbon footprint. Recent changes to the company car policy encourage green/hybrid vehicles.
Plasmor’s reputation within the industry is exemplary. In terms of quality, products are manufactured within the framework of BSES 13369 and ISO 9001. The culture of the business stems from its family ownership and reflect traditional values of honesty, integrity and fairness. The board ensure these values permeate top down throughout the business.
The business recognises its responsibility to all stakeholders and as mentioned previously the long-term interests of those stakeholders are considered throughout decision making processes. Naturally, there is a balance, whilst shareholders reasonably expect a return on their investment in terms of dividends any distributions are made in the context of results and capital investment requirements. The group benefits greatly from shareholder involvement at the highest level within the management team.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 August 2023.
The results for the year are set out on page 10.
Interim dividends of £950,000 and final dividends of £1,500,000 were paid during the year.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The Group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests. Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance. The company is committed to staff development and all staff receive continual appropriate training.
The Plasmor Group enjoys excellent relationships with customers and suppliers alike. Customer service and product quality are second to none we work with our customers to ensure fair pricing and mutual corporate responsibility.
In terms of suppliers, we necessarily appreciate the value of a good supply chain. Whilst always seeking value for money we ensure suppliers are paid correctly and to terms. Again, we encourage suppliers to respect our values through BES 6001 accreditation.
Operational Impacts
Mindful of environmental responsibilities the Group operates with ISO 14001 accreditation. Energy consumption and carbon emissions are monitored with a view to satisfying our SECR responsibilities, maximising efficiency and minimising our carbon footprint. The group is committed to green / hybrid vehicles.
Standards and Reputation
Plasmor’s reputation within the industry is exemplary. In terms of quality, products are manufactured within the framework of BSES 13369 and ISO 9001. The culture of the business stems from its family ownership and reflect traditional values of honesty, integrity and fairness. The board ensure these values permeate top down throughout the business.
Equity and Fairness
The business recognises its responsibility to all stakeholders and as mentioned previously the long-term interests of those stakeholders are considered throughout decision making processes. Naturally, there is a balance, whilst shareholders reasonably expect a return on their investment in terms of dividends any distributions are made in the context of results and capital investment requirements. The group benefits greatly from shareholder involvement at the highest level within the management team.
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The GHG (Green House Gas) Inventory includes all GHG emissions issued from the Plasmor group and its subsidiaries' business activities. The GHG emissions were consolidated according to a control approach. Thus, all GHG emissions and removals from facilities over which Plasmor has financial or operational control were considered.
Energy consumption and greenhouse gas emissions for the year ended 2023:
Annualised kWh 132,999,518
tCO2e 26,205
An appropriate intensity ratio metric was kgCO2e/manufactured pallet as this directly relates energy consumption to tangible productivity to provide a useful measure of energy efficiency. For the reporting period the analysis evidenced a figure of:
0.0064 tCO2e / manufactured pallet
Energy Efficiency is always at the forefront; curing systems across the group have been lowered in temperature to optimise any benefits possible without compromising the final product.
We have audited the financial statements of Plasmor (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 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.
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.
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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 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 parent company or to cease operations, or have no realistic alternative but to do so.
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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
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 £2,450,000 (2022 - £2,000,000 profit).
Plasmor (Holdings) Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is PO Box 44, Womersley Road, Knottingley, WF11 0DN.
The group consists of Plasmor (Holdings) Limited and all of its subsidiaries.
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 £1.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
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 group has applied the principles of merger accounting in consolidating the results, as control was acquired by Plasmor (Holdings) Limited via a share-for-share exchange on 8 September 2021. Merger accounting requires that the results of the group are presented as if the group has always been in its present form and does not require a re-evaluation of fair values as at the point of acquisition.
The consolidated group financial statements consist of the financial statements of the parent company Plasmor (Holdings) 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 August 2023. 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.
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.
Turnover is recognised 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. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Turnover derived from rental income is recognised on an accruals basis and turnover from the sale of properties is recognised at the point of transfer of legal title.
Quarries included within freehold property are depreciated based upon the tonnage extracted relative to the anticipated reserves.
Assets under construction at the year end are not depreciated until they are brought into economic 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 profit and loss account.
Freehold land is not depreciated.
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.
At each reporting period end date, the group 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.
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.
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 balance sheet 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, 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, 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 publically traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
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.
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.
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.
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.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 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.
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.
The group operates two defined contribution pension schemes; one for its employees, the other for directors. Pension contributions under the schemes are charged to the profit and loss account as incurred.
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.
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
Carbon credits
The company incurs expenditure for carbon credits for future use. When the initial cost is made this is treated as a prepayment as such credits are held for own use only. The company calculates their requirements over a 2-3 year window and then purchase extra credits based on historical evidence of usage and then release them straight line over time to the profit and loss.
Restoration costs
Provisions for restoration costs are made to reflect the costs of the remedial work in relation to the closure of mining sites operated by the group. The amount provided represents the expected costs of restoring the sites in line with the group's legal and constructive obligations based on survey measurements carried out at the balance sheet date. The provision is released as actual costs are incurred to restore the sites. The provisions are calculated by the directors with advice from third party surveyors who are considered best placed to estimate the restoration costs.
Mining assets
Mining assets comprise land purchased by the group for the purpose of mineral extraction activities. The cost comprises the price paid for the land and any other costs incurred in exploring the sites for mining purposes, including estimated obligations arising from mine restoration commitments at the date of acquiring the mines. Mining assets are amortised using the units of production method in line with the cost model based on the estimated reserves and the rate of extraction in the period. Mining assets are reviewed for impairment on an annual basis and an impairment is included in the financial statements where facts or circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The depreciation policy has been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £5,571,919 (2022 - £5,451,895) which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
Outstanding trade debtor balances are reviewed on a line by line basis by management to identify possible amounts where a provision is required. Management closely manage the collection of trade debtors and are therefore able to identify balances where there is uncertainty about its recoverability, and determine what provision is required (if any).
The group converts raw materials to finished goods as part of its production operations. Stock values include any costs such as labour and overheads attributable to generating finished goods, as management believe this is the most suitable costing method to take into account the matching concept of accounting.
At each reporting date an assessment is made for provisions required to properly recognise wastage, damaged goods and over absorbed overheads. 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 and provided for in the balance sheet. Reversals of impairment losses are also recognised in profit or loss where these arise.
Investment properties are included within the accounts at fair value. The properties have been independently valued by professional valuer's. The directors obtain new valuations when they believe a material change has occurred to the value of the property.
An obligation exists to restore land leased for the purposes of mineral extraction to its original condition before mining operations commenced. Management have employed external planning and environmental consultants to calculate the cost of the provision required in respect of restoring the relevant land. At each reporting date management assess that the provision is a reliable estimate of the future costs to be incurred.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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:
Group
Included in the cost of freehold land and buildings is land with a deemed cost of £7,908,970 (2022 - £7,743,551) which is not depreciated.
Upon transition to FRS 102, the group elected to take exemption 35.10 (d) of FRS 102, which permits the group to revalue freehold land and buildings at fair value and for that fair value to be used as a deemed cost for the item going forward.
The historic cost of land at the year end is £3,541,943 (2022 - £3,376,524) which is not depreciated.
Also included within freehold land and buildings is mining assets with a carrying value of £3,498,785 (2022 - £872,461).
Investment property comprises of three rental properties with two being sold in the year.
The investment property is a rental property that was transferred from a group company during a prior period. The fair value of the investment property has been arrived at on the basis of a valuation. The property's valuation was carried out at 2 September 2021 by Screetons estate agents, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. The directors feel that the market value has not materially changed since the valuation date.
There was no significant difference between the value shown for stocks and their replacement cost at the balance sheet date.
Company - Amounts owed from group undertakings are repayable on demand.
The bank overdraft is secured by a multilateral guarantee across all group companies as disclosed within note 21.
The restoration provision relates to the future obligation Plasmor Limited has on its mining and mineral extracting activities to restate the land in use to a condition in line with North Yorkshire County Council planning conditions.
The company last obtained a valuation report to support the cost of the restoration provision on 1 October 2021. The valuation was performed by MJCA Limited, Technical Advisors on Environmental Issues, who are not connected with the company. The directors have assessed the valuation in the year and concluded that due to restoration works performed, the provision should be reduced.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
The group operates two defined contribution pension schemes for all qualifying employees; one for its employees, the other for directors. The assets of the schemes are held separately from those of the group in independently administered funds.
Contributions totalling £105,644 (2022 - £117,318) were payable to the fund at the year end and are included in creditors.
There is a multilateral guarantee given by the company, its fellow subsidiary trading companies and its parent company under which each party guarantees the bank overdraft facilities of up to £1,000,000 of the other parties. The maximum contingent liability under this guarantee as at 31 August 2023 is £82,731 (2022 - £30,010).
Operating lease payments represent rentals payable by the group for certain properties and assets. Leases are negotiated for an average term of 3 years and rentals are fixed.
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:
Amounts contracted for but not provided in the financial statements:
Dividends of £1,020,111 (2022 - £395,580) were paid in the year in respect of shares held by the company's directors.
Dividends of £nil (2022 - £525,000) were payable at the year end in respect of shares held by the company's directors.
The Directors are of the opinion that there is no ultimate controlling party.
Details of the company's subsidiaries at 31 August 2023 are as follows:
The registered office of these companies is PO Box 44, Wormersley Road, Knottingley, West Yorkshire, WF11 0DN.