Company registration number 08586462 (England and Wales)
CELTIC UTILITIES GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
CELTIC UTILITIES GROUP LIMITED
COMPANY INFORMATION
Directors
Mr S Bishop
Mr K James
Mr M P Alderson
(Appointed 31 October 2023)
Mr William Owen
(Appointed 31 October 2023)
Company number
08586462
Registered office
Ty Derw
Lime Tree Court
Mulberry Drive
Cardiff
South Glamorgan
United Kingdom
CF23 8AB
Auditor
Azets Audit Services
Charter Court
Phoenix Way Enterprise Park
Swansea
United Kingdom
SA7 9FS
CELTIC UTILITIES GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 33
CELTIC UTILITIES GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -

The directors present the strategic report for the year ended 31 October 2023.

Fair review of business, strategy and future outlook

On 1 November 2021 the company acquired the entire issued share capital of Celtic Recycling Limited and Transerv Europe Limited, companies which were related up to that point to Celtic Utilities Group Limited by virtue of common shareholders. The acquisitions formed part of a strategy aimed at positioning the new group within the marketplace to be able to provide a distinctive proposition which was market leading. As part of this strategy a further company, Regen Construction Limited, was incorporated as part of the group on 11th January 2022.

 

The new group offers the markets it serves a complete suite of services for their life cycle. Transerv Europe Limited are specialist in power transformer installation, commissioning and maintenance, and their activities are supplemented by the civil engineering works undertaken by Regen Construction Limited. Celtic Recycling Limited provides waste management services, metal recycling and electrical equipment recovery and dismantling.

 

The results for the year ended 31 October 2023 and the preceding financial year are shown in the annexed financial statements. Group turnover has increased to £22,893,314 (2022: £22,832,692), but cost pressures during the year has resulted in group operating profit decreasing to £2,938,352 (2022: £4,499,463). During the year the group has continued to improve its net assets position which has increased to £13,717,056 (2022: £11,937,046).

 

The EBITDA for the group continues to be strong as follows:

 

2023          2022        

                

£3,446,076     £4,962,047    

 

The main challenges affecting the group in 2023 remain similar to those in the previous year. Cost reduction from our customers remains a key factor along with raw material and overhead price variances. This is an area that is closely monitored by the directors.

 

The strategy of the business is to achieve attractive and sustainable rates of profitability and growth. To achieve this the group actively pursues new and continuing opportunities within the global market. As part of this strategy the group has sought to increase its customer base, reducing reliance on individual customers both within the UK and overseas.

 

The group continues to work with its customers to help ensure that the competitive edge is maintained through quality goods and services rather than compromise. The directors believe that the group is well placed to take advantage of any opportunities that might arise and are confident that with the effective application of its strategy the company will continue to trade profitably into the future.

Principal risks and uncertainties

The management of the business and the execution of strategy are subject to a number of risks. Key business risks principally relate to the market competition both from a local and national perspective, the retention of suitably qualified employees and compliance with applicable legislation. Business risks are reviewed regularly by the directors and appropriate processes are put in place to monitor and mitigate their impact.

 

Financial risk management

The Group's operations expose it to a variety of financial risks that include the effects of price risk, credit risk, liquidity risk, interest rate risk and interest rate cash flow risk. The Group has in place an informal risk management programme that seeks to limit the adverse effects on the financial performance of the Group. Given the size of the Group, the directors have not delegated the responsibility for monitoring financial risk management to a sub committee of the board. The policies set by the board of directors are implemented by the Group's finance department.

CELTIC UTILITIES GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -

Price risk

The Group is exposed to commodity price risk as a result of its operations. However, given the size of the Group's operations, the costs of managing the exposure to commodity price risk exceed any potential benefits. The directors' will revisit the appropriateness of this policy should the Group's operations change in size or nature. The Group has no exposure to equity securities price risk as it hold no listed or other equity instruments.

 

Credit risk

The Group has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to any individual counter party is continually monitored in line with the Group's credit control procedures. Credit risk insurance has been evaluated by directors' and has not been deemed cost effective in the current business climate. The directors' will revisit the appropriateness of this policy should the Group's operations change in size or nature and the availability of credit insurance on the customer base.

 

Liquidity and interest rate risk

The Group has cash reserves to fund its operations and utilises short term finance as required.

 

Interest rate cash flow risk

The Group has interest bearing assets. Interest bearing assets include only cash balances, all of which earn interest at variable rates.

Key performance indicators

 

 

 

 

 

 

 

 

 

 

Revenue (£)

Cost of Sales (£)

2023

22,893,314

14,667,389

2022

 

22,832,692

14,134,328

Variance

 

0.17%

2.80%

Gross Profit (£)

8,225,925

8,698,864

-3.85%

Gross Profit (%)

35.93%

38.1%

-1.57%

Administrative expenses (£)

5,295,673

4,207,001

25.88%

Operating Profit (£)

2,938,352

4,499,463

-31.64%

Operating Profit (%)

12.83%

19.71%

-6.27%

 

 

 

 

Other performance indicators

The Group focuses on ensuring service levels are kept to a high standard to ensure that existing relationships are maintained as well as ensuring that any new relationships are satisfied with the service provided.

 

The Group continually review its processes and overheads to see where improvements to efficiency can be made and costs saved.

On behalf of the board

Mr S Bishop
Director
30 July 2024
CELTIC UTILITIES GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 October 2023.

Principal activities

The principal activities of the group are:

 

The principal activity of the company is that of a holding company.

Results and dividends

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

Ordinary dividends were paid amounting to £500,000. The directors do not recommend payment of a further dividend.

Directors

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

Mr S Bishop
Mr K James
Mr M P Alderson
(Appointed 31 October 2023)
Mr William Owen
(Appointed 31 October 2023)
Future developments

The strategy and future developments in the business are set out in the Strategic Report.

Auditor

Azets Audit Services were appointed as auditor to the company in the year and is deeemd to be re-appointed under section 487 (2) of the Companies Act 2006.

Statement of directors' responsibilities

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

 

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

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CELTIC UTILITIES GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -
Statement of disclosure to auditor

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

On behalf of the board
Mr S Bishop
Director
30 July 2024
CELTIC UTILITIES GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CELTIC UTILITIES GROUP LIMITED
- 5 -
Opinion

We have audited the financial statements of Celtic Utilities Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2023 which comprise the group profit and loss account, 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).

In our opinion the financial statements:

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:

CELTIC UTILITIES GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CELTIC UTILITIES GROUP LIMITED
- 6 -
Matters on which we are required to report by exception

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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.

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.

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.

CELTIC UTILITIES GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CELTIC UTILITIES GROUP LIMITED
- 7 -

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:

 

 

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.

Paul Bowden (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
30 July 2024
Chartered Accountants
Statutory Auditor
Charter Court
Phoenix Way Enterprise Park
Swansea
United Kingdom
SA7 9FS
CELTIC UTILITIES GROUP LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
22,893,314
22,832,692
Cost of sales
(14,667,389)
(14,134,328)
Gross profit
8,225,925
8,698,364
Administrative expenses
(5,295,673)
(4,207,001)
Other operating income
8,100
8,100
Operating profit
4
2,938,352
4,499,463
Interest receivable and similar income
8
91,089
22,813
Interest payable and similar expenses
9
(54,961)
(76,435)
Profit before taxation
2,974,480
4,445,841
Tax on profit
10
(694,470)
(880,189)
Profit for the financial year
2,280,010
3,565,652
Profit for the financial year is all attributable to the owners of the parent company.
CELTIC UTILITIES GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 9 -
2023
2022
£
£
Profit for the year
2,280,010
3,565,652
Other comprehensive income
-
-
Total comprehensive income for the year
2,280,010
3,565,652
Total comprehensive income for the year is all attributable to the owners of the parent company.
CELTIC UTILITIES GROUP LIMITED
GROUP BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
4,392,452
4,130,983
Current assets
Stocks
15
927,687
1,000,325
Debtors
16
12,580,207
7,765,034
Cash at bank and in hand
1,677,009
6,687,373
15,184,903
15,452,732
Creditors: amounts falling due within one year
17
(4,865,187)
(5,970,892)
Net current assets
10,319,716
9,481,840
Total assets less current liabilities
14,712,168
13,612,823
Creditors: amounts falling due after more than one year
18
(546,778)
(1,321,035)
Provisions for liabilities
Deferred tax liability
21
448,334
354,742
(448,334)
(354,742)
Net assets
13,717,056
11,937,046
Capital and reserves
Called up share capital
24
200
50,200
Other reserves
50,000
-
0
Profit and loss reserves
13,666,856
11,886,846
Total equity
13,717,056
11,937,046
The financial statements were approved by the board of directors and authorised for issue on 30 July 2024 and are signed on its behalf by:
30 July 2024
Mr S Bishop
Director
Company registration number 08586462 (England and Wales)
CELTIC UTILITIES GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 31 OCTOBER 2023
31 October 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
68,551
-
0
Investments
13
50,101
50,101
118,652
50,101
Current assets
Debtors
16
5,723,416
122,613
Cash at bank and in hand
48,402
28,163
5,771,818
150,776
Creditors: amounts falling due within one year
17
(5,807,392)
(150,619)
Net current (liabilities)/assets
(35,574)
157
Total assets less current liabilities
83,078
50,258
Provisions for liabilities
Deferred tax liability
21
16,496
-
0
(16,496)
-
Net assets
66,582
50,258
Capital and reserves
Called up share capital
24
200
50,200
Other reserves
50,000
-
0
Profit and loss reserves
16,382
58
Total equity
66,582
50,258

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 £516,324 (2022 - £251,586 profit).

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

The financial statements were approved by the board of directors and authorised for issue on 30 July 2024 and are signed on its behalf by:
30 July 2024
Mr S Bishop
Director
Company registration number 08586462 (England and Wales)
CELTIC UTILITIES GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 12 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 November 2021
50,200
-
8,572,722
8,622,922
Year ended 31 October 2022:
Profit and total comprehensive income
-
-
3,565,652
3,565,652
Dividends
11
-
-
(251,528)
(251,528)
Balance at 31 October 2022
50,200
-
11,886,846
11,937,046
Year ended 31 October 2023:
Profit and total comprehensive income
-
-
2,280,010
2,280,010
Dividends
11
-
-
(500,000)
(500,000)
Reclassification
(50,000)
50,000
-
-
Balance at 31 October 2023
200
50,000
13,666,856
13,717,056
CELTIC UTILITIES GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 13 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 November 2021
100
-
-
0
100
Year ended 31 October 2022:
Profit and total comprehensive income for the year
-
-
251,586
251,586
Issue of share capital
24
50,100
-
-
50,100
Dividends
11
-
-
(251,528)
(251,528)
Balance at 31 October 2022
50,200
-
58
50,258
Year ended 31 October 2023:
Profit and total comprehensive income
-
-
516,324
516,324
Dividends
11
-
-
(500,000)
(500,000)
Reclassification
(50,000)
50,000
-
-
Balance at 31 October 2023
200
50,000
16,382
66,582
CELTIC UTILITIES GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
28
(680,737)
2,449,911
Interest paid
(54,961)
(76,435)
Income taxes paid
(1,171,011)
(676,272)
Net cash (outflow)/inflow from operating activities
(1,906,709)
1,697,204
Investing activities
Purchase of tangible fixed assets
(436,697)
(129,099)
Proceeds from disposal of tangible fixed assets
20,789
-
Loans advanced
(1,575,000)
-
Interest received
91,089
22,813
Net cash used in investing activities
(1,899,819)
(106,286)
Financing activities
Repayment of bank loans
(1,077,943)
(164,796)
Payment of finance leases obligations
(106,365)
(63,846)
Dividends paid to equity shareholders
(19,528)
(232,000)
Net cash used in financing activities
(1,203,836)
(460,642)
Net (decrease)/increase in cash and cash equivalents
(5,010,364)
1,130,276
Cash and cash equivalents at beginning of year
6,687,373
5,557,097
Cash and cash equivalents at end of year
1,677,009
6,687,373
CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 15 -
1
Accounting policies
Company information

Celtic Utilities Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Ty Derw, Lime Tree Court, Cardiff Gate Business Park, Cardiff, Wales, CF23 8AB.

 

The group consists of Celtic Utilities Group Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. 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:

 

1.2
Business Combinations - Merger accounting

In the parent company financial statements, merger accounting has been used to account for the business combinations in the year.

The carrying values of the assets and liabilities of the parties to the combination have therefore not been adjusted to fair value on consolidation, although where necessary, appropriate adjustments have been made to achieve uniformity of accounting policies in the combining entities.

The results and cash flows of all the combining entities have been brought into the financial statements of the parent company from the beginning of the financial year in which the combination occurred, adjusted so as to achieve uniformity of accounting policies. The corresponding figures have been restated by including the results for all the combining entities for the previous period and their balance sheets for the previous balance sheet date, adjusted as necessary to achieve uniformity of accounting policies.

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

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 16 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Celtic Utilities Group Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 October 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.

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

1.4
Going concern

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

1.5
Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Turnover is recognised when the service is provided.

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.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.6
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:

Freehold land and buildings
2% straight line
Plant and equipment
5-33% straight line
Fixtures and fittings
5-10% straight line
Computers
20-33% straight line
Motor vehicles
10-33% 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 recognised in the profit and loss account.

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 17 -
1.7
Fixed asset investments

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

 

In the parent company financial statements, investments in subsidiaries 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.

1.8
Impairment of fixed assets

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.

 

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

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

 

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

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

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost, which relates to extraction activities, comprises direct materials, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. The cost is measured utilising the average margins achieved on metal sales throughout a financial period. Revenues from externally achieved metal market sales values are compared to total costs of extraction and the average margin is then applied to market values at the reporting period date to value stock volumes held.

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.

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 18 -
1.10
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.

1.11
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's 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

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 19 -
Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

1.12
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.13
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 20 -
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 if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.14
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.

1.15
Retirement benefits

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

1.16
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.

1.17
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.

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Revenue from contracts

The estimates and associated assumptions used to determine accrued and deferred income on contracts are based on knowledge of individual projects and other factors that are considered to be relevant. Cost of work done to date including materials and staff cost is taken into consideration before arriving at a valuation by reference to the stage of completion. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed continuously.

Stock valuation

In determining the cost of inventories from extraction activities which are held at the reporting period date, an estimate is applied. Average margins achieved on metal sales throughout a financial period are determined utilising revenues from externally achieved metal market sales values as compared to total costs of extraction. This margin is then applied to the market values at the reporting period date to determine material cost values to be applied to stock volumes held. The estimates and underlying assumptions are reviewed continuously.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Waste management services
16,565,275
16,719,426
Power transformer installation & maintenance
6,249,631
6,113,266
Civil Engineering
78,408
-
22,893,314
22,832,692
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
21,264,790
20,558,436
Rest of the World
1,318,037
2,274,256
Europe
310,487
-
22,893,314
22,832,692
CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
3
Turnover and other revenue
(Continued)
- 22 -
2023
2022
£
£
Other revenue
Interest income
91,089
22,813
Grants received
8,100
8,100
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
871
(52,923)
Government grants
(8,100)
(8,100)
Depreciation of owned tangible fixed assets
507,724
419,367
Depreciation of tangible fixed assets held under finance leases
-
43,217
Profit on disposal of tangible fixed assets
(16,079)
-
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,500
5,000
Audit of the financial statements of the company's subsidiaries
31,500
25,850
37,000
30,850
For other services
Taxation compliance services
7,480
6,850
Services relating to corporate finance transactions
-
5,000
7,480
11,850
CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 23 -
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Operative
89
83
-
-
Adminastrative
26
20
-
-
Directors
10
8
4
2
Total
125
111
4
2

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
6,091,109
5,193,585
-
0
-
0
Social security costs
632,934
591,223
-
-
Pension costs
232,597
177,399
-
0
-
0
6,956,640
5,962,207
-
0
-
0
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
346,111
228,047
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
124,899
115,151
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
91,089
22,813
CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 24 -
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
21,303
40,485
Interest on finance leases and hire purchase contracts
13,663
6,614
Other interest
19,995
29,336
Total finance costs
54,961
76,435
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
622,931
876,379
Adjustments in respect of prior periods
(3,697)
4,237
Total current tax
619,234
880,616
Deferred tax
Origination and reversal of timing differences
75,236
(427)
Total tax charge
694,470
880,189

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
2,974,480
4,445,841
Expected tax charge based on the standard rate of corporation tax in the UK of 22.52% (2022: 19.00%)
669,853
844,710
Tax effect of expenses that are not deductible in determining taxable profit
37,351
19,707
Adjustments in respect of prior years
(3,697)
8,514
Effect of change in corporation tax rate
19,316
(6,072)
Permanent capital allowances in excess of depreciation
(7,008)
(8,015)
Deferred tax adjustments in respect of prior years
(21,345)
-
0
Deferred tax not recognised
-
0
21,345
Taxation charge
694,470
880,189
CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 25 -
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
-
251,528
Interim paid
500,000
-
500,000
251,528
12
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 November 2022
2,766,485
5,182,261
1,212,944
53,167
840,682
10,055,539
Additions
-
0
213,840
99,514
97,699
362,850
773,903
Disposals
-
0
-
0
-
0
-
0
(36,131)
(36,131)
At 31 October 2023
2,766,485
5,396,101
1,312,458
150,866
1,167,401
10,793,311
Depreciation and impairment
At 1 November 2022
571,736
3,922,058
598,910
37,674
794,178
5,924,556
Depreciation charged in the year
52,355
287,033
50,945
14,665
102,726
507,724
Eliminated in respect of disposals
-
0
-
0
-
0
-
0
(31,421)
(31,421)
At 31 October 2023
624,091
4,209,091
649,855
52,339
865,483
6,400,859
Carrying amount
At 31 October 2023
2,142,394
1,187,010
662,603
98,527
301,918
4,392,452
At 31 October 2022
2,194,749
1,260,203
614,034
15,493
46,504
4,130,983
CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
12
Tangible fixed assets
(Continued)
- 26 -
Company
Computers
£
Cost
At 1 November 2022
-
0
Additions
73,447
At 31 October 2023
73,447
Depreciation and impairment
At 1 November 2022
-
0
Depreciation charged in the year
4,896
At 31 October 2023
4,896
Carrying amount
At 31 October 2023
68,551

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
266,511
170,830
-
0
-
0
Motor vehicles
186,628
24,198
-
0
-
0
453,139
195,028
-
-
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
50,101
50,101
CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
13
Fixed asset investments
(Continued)
- 27 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 November 2022 and 31 October 2023
50,101
Carrying amount
At 31 October 2023
50,101
At 31 October 2022
50,101
On 1 November 2021, Celtic Utilities Limited acquired the entire issued share capital of Celtic Recycling Limited and Transerv Europe Limited, for a cost of £50,000 and £100, respectively.
On 11 January 2022, Celtic Utilities Limited acquired the entire issued share capital of Regen Construction Limited for a cost of £1.
14
Subsidiaries

On 1 November 2021 the Company acquired the entire issued share capital of Celtic Recycling Limited and Transerv Europe Limited, companies which were related to the Company up to that point by virtue of common shareholders.

 

On 11 January 2022 Regen Construction Limited was incorporated as part of the group.

 

The combination of the above companies has been accounted for using merger accounting.

Details of the company's subsidiaries at 31 October 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Celtic Recycling Limited
England & Wales
Ordinary
100.00
Transerv Europe Limited
England & Wales
Ordinary
100.00
Regen Construction Limited
England & Wales
Ordinary
100.00
15
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
927,687
1,000,325
-
-
CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 28 -
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,134,206
5,245,708
-
0
-
0
Gross amounts owed by contract customers
36,045
76,506
-
0
-
0
Amounts owed by group undertakings
(300,000)
-
722,981
115,836
Other debtors
1,607,761
238,286
-
0
111
Prepayments and accrued income
2,102,195
2,204,534
435
6,666
7,580,207
7,765,034
723,416
122,613
Amounts falling due after more than one year:
Other debtors
5,000,000
-
0
5,000,000
-
0
Total debtors
12,580,207
7,765,034
5,723,416
122,613

Amounts owed by group undertakings are interest free, unsecured and have no fixed terms for repayment.

 

Included within other debtors of the group is an amount of £1,575,000 (2022: £nil) owed by the directors of the group, which is interest free, unsecured, and was settled subsequent to the year end.

 

Included within other debtors due after more than one year, of the group and company, is an amount of £5,000,000 (2022: £nil) due from a related party and shareholder in the company, NexGen Utility Management Limited. The amount is interest free for the first 12 months and follows the Bank of England's interest rate thereafter. The loan is secured by a charge granted by NexGen Utility Manangement Limited, over its shares in Celtic Utilities Group Limited. The loan is due for repayment in 5 years.

17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
20
-
0
170,728
-
0
-
0
Obligations under finance leases
19
152,591
62,808
-
0
-
0
Trade creditors
1,076,077
1,321,680
41,491
618
Amounts owed to group undertakings
(300,000)
-
0
5,181,955
150,000
Corporation tax payable
310,509
880,642
-
0
-
0
Other taxation and social security
348,987
665,398
78,541
-
Government grants
22
8,100
8,100
-
0
-
0
Dividends payable
500,000
19,528
500,000
-
0
Other creditors
24,933
1
5,405
1
Accruals and deferred income
2,743,990
2,842,007
-
0
-
0
4,865,187
5,970,892
5,807,392
150,619

Amounts owed to group undertakings are interest free, unsecured and have no fixed terms for repayment.

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 29 -
18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
-
0
907,215
-
0
-
0
Obligations under finance leases
19
252,078
111,020
-
0
-
0
Government grants
22
294,700
302,800
-
0
-
0
546,778
1,321,035
-
-
19
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
141,240
62,808
-
0
-
0
In two to five years
263,429
111,020
-
0
-
0
404,669
173,828
-
-

Obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.

20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
-
0
1,077,943
-
0
-
0
Payable within one year
-
0
170,728
-
0
-
0
Payable after one year
-
0
907,215
-
0
-
0

The bank loans and overdrafts disclosed in the notes above were secured by a fixed and floating charge on the assets of the company and a life policy on each of the directors and the freehold properties at 57 Heol Mostyn, Pyle, Bridgend and Unit 31 Queensway Meadows Industrial Park, Newport.

 

During 2023, all of the bank loans were repaid.

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 30 -
21
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
451,171
433,429
Other short term timing differences
-
(962)
Unamortised government grants
(2,837)
(77,725)
448,334
354,742
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
17,138
-
Unamortised government grants
(642)
-
16,496
-
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 November 2022
354,742
-
Charge to profit or loss
93,592
16,496
Liability at 31 October 2023
448,334
16,496

The deferred tax liability set out above is expected to reverse within in line with useful lives of the associated assets and relates to accelerated capital allowances that are expected to mature within the same period.

Under Finance Act 2020, the main rate of corporation tax was to remain at 19% for the years starting 1 April 2020 and 1 April 2021; however, under Finance Act 2021, enacted on 24 May 2021, the rate of corporation tax will lie between 19% and 25% subject to the levels of taxable profits from 1 April 2023. Accordingly, the higher rate of 25% has been used to calculate the deferred tax liability for the years ended 31 October 2023 and 31 October 2022.

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 31 -
22
Government grants
Group
Company
2023
2022
2023
2022
£
£
£
£
Arising from government grants
302,800
310,900
-
-

Deferred income is included in the financial statements as follows:

Current liabilities
8,100
8,100
-
0
-
0
Non-current liabilities
294,700
302,800
-
0
-
0
302,800
310,900
-
-

The group received local government grants totalling £460,000 in previous accounting periods. The balance was deferred on the balance sheet and is being released over the estimated useful life of the related assets.

 

An amount of £8,100 was credited to the profit and loss account in the period.

 

The grant was provided under the Repayable Business Finance Funding scheme and as such the group was required to repay an element of the funding if turnover levels exceeded a certain target over a three period. An amount of £50,000 was repayable of which the entire balance has now been repaid.

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
232,597
177,399

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

24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
200
200
200
50,200

There has been no change in issued and fully paid share capital in the year. The movement in the value of the share capital represents a reclassification of reserves to correctly reflect the value of the number of shares issued. On 1 November 2021, Celtic Utilities Limited acquired the entire issued share capital of Celtic Recycling Limited and Transerv Europe Limited, being 50,000 and 100 ordinary shares of £1 each, respectively. The total purchase consideration was the issuance of 100 ordinary shares of £1 each, which is less than the nominal value of the shares acquired, the difference therefore being classified as an other reserve.

 

CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 32 -
25
Financial commitments, guarantees and contingent liabilities

Celtic Utilities Group Limited has provided a cross guarantee and debenture to the company bankers in respect of the debts and liabilities of Celtic Recycling Limited and Transerv Europe Limited, its subsidiary companies.

26
Operating lease commitments

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
401,361
455,082
-
-
Between two and five years
159,872
271,637
-
-
561,233
726,719
-
-
27
Directors' transactions

There is a directors loan account of £1,575,000 at year end, included in other debtors.

Dividends totalling £500,000 (2022 - £251,528) were paid in the year in respect of shares held by the company's directors.

28
Cash (absorbed by)/generated from group operations
2023
2022
£
£
Profit for the year after tax
2,280,010
3,565,652
Adjustments for:
Taxation charged
694,470
880,189
Finance costs
54,961
76,435
Investment income
(91,089)
(22,813)
Gain on disposal of tangible fixed assets
(16,079)
-
Depreciation and impairment of tangible fixed assets
507,724
462,584
Movements in working capital:
Decrease in stocks
72,638
50,865
Increase in debtors
(3,240,173)
(2,869,366)
(Decrease)/increase in creditors
(935,099)
314,465
Decrease in deferred income
(8,100)
(8,100)
Cash (absorbed by)/generated from operations
(680,737)
2,449,911
CELTIC UTILITIES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 33 -
29
Analysis of changes in net funds - group
1 November 2022
Cash flows
New finance leases
31 October 2023
£
£
£
£
Cash at bank and in hand
6,687,373
(5,010,364)
-
1,677,009
Borrowings excluding overdrafts
(1,077,943)
1,077,943
-
-
Obligations under finance leases
(173,828)
106,365
(337,206)
(404,669)
5,435,602
(3,826,056)
(337,206)
1,272,340
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