Company registration number 02765374 (England and Wales)
CELTIC RECYCLING LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
CELTIC RECYCLING LTD.
COMPANY INFORMATION
Directors
Mr S Bishop
Mr K James
Ms L Pitman
Mr P Owen
Mr D Gladwin
(Appointed 21 November 2022)
Mr O Bishop
(Appointed 1 November 2023)
Secretary
Mr S Bishop
Company number
02765374
Registered office
Unit 37
Village Farm Industrial Estate
Pyle
Bridgend
Mid Glamorgan
United Kingdom
CF33 6BZ
Auditor
Azets Audit Services
Charter Court
Phoenix Way Enterprise Park
Swansea
United Kingdom
SA7 9FS
CELTIC RECYCLING LTD.
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 26
CELTIC RECYCLING LTD.
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

The results for the year ended 31 October 2023 and the preceding financial year are shown in the annexed financial statements. Turnover has increased to £17,131,079 (2022: £17,093,261), but cost pressures during the year have resulted in operating profit decreasing to £2,011,104 (2022: £3,822,014). During the year the company has continued to improve its net assets position which has increased to £11,103,423 (2022: £9,727,267).

 

The EBITDA for the company continues to be strong and the five year summary is as follows:

 

2023         2022          2021         2020          2019             

                

£2,458,881     £4,244,406     £3,408,072     £1,216,587     £1,276,095         

 

The main challenges affecting the business 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 company actively pursues new and continuing opportunities within the global market. As part of this strategy the company has sought to increase its customer base, reducing reliance on individual customers both within the UK and overseas.

 

The company 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 company 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 Company'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 Company has in place an informal risk management programme that seeks to limit the adverse effects on the financial performance of the Company. Given the size of the Company, 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 Company's finance department.

CELTIC RECYCLING LTD.
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -

Price risk

The Company is exposed to commodity price risk as a result of its operations. However, given the size of the Company'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 Company's operations change in size or nature. The Company has no exposure to equity securities price risk as it hold no listed or other equity instruments.

 

Credit risk

The Company 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 Company'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 Company's operations change in size or nature and the availability of credit insurance on the customer base.

 

Liquidity and interest rate risk

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

 

Interest rate cash flow risk

The Company 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

17,131,079

11,511,126

2022

 

17,093,261

10,356,123

Variance

 

0.22%

11.16%

Gross Profit (£)

5,619,953

6,737,138

-16.58%

Gross Profit (%)

32.81%

39.41%

-6.6%

Administrative expenses (£)

3,616,949

2,923,224

22.02%

Operating Profit (£)

2,011,104

2,822,014

-26.96%

Operating Profit (%)

11.74%

16.51%

-4.48%

 

 

 

 

 

The company 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 company 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 RECYCLING LTD.
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 activity of the company in the year under review continued to be that of provision of waste management services, metal recycling and electrical equipment recovery and dismantling.

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
Ms L Pitman
Mr P Owen
Mr D Gladwin
(Appointed 21 November 2022)
Mr O Bishop
(Appointed 1 November 2023)
Results and dividends

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

Ordinary dividends were paid amounting to £250,000. The directors do not recommend payment of a final dividend.

Future developments

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

Auditor

The auditor, Azets Audit Services, is deemed to be reappointed 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 company and of the profit or loss of the company 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 company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CELTIC RECYCLING LTD.
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 company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

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

We have audited the financial statements of Celtic Recycling Ltd. (the 'company') for the year ended 31 October 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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 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 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 RECYCLING LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CELTIC RECYCLING LTD.
- 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
2024-07-31
Chartered Accountants
Statutory Auditor
Charter Court
Phoenix Way Enterprise Park
Swansea
United Kingdom
SA7 9FS
CELTIC RECYCLING LTD.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
17,131,079
17,093,261
Cost of sales
(11,511,126)
(10,356,123)
Gross profit
5,619,953
6,737,138
Administrative expenses
(3,616,949)
(2,923,224)
Other operating income
8,100
8,100
Operating profit
4
2,011,104
3,822,014
Interest receivable and similar income
7
84,642
17,785
Interest payable and similar expenses
8
(46,596)
(72,049)
Profit before taxation
2,049,150
3,767,750
Tax on profit
9
(422,994)
(727,619)
Profit for the financial year
1,626,156
3,040,131

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CELTIC RECYCLING LTD.
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
4,004,457
3,875,376
Current assets
Stocks
12
927,687
1,000,325
Debtors
13
9,856,589
5,523,035
Cash at bank and in hand
998,192
5,427,500
11,782,468
11,950,860
Creditors: amounts falling due within one year
14
(3,799,446)
(4,474,055)
Net current assets
7,983,022
7,476,805
Total assets less current liabilities
11,987,479
11,352,181
Creditors: amounts falling due after more than one year
15
(512,724)
(1,300,192)
Provisions for liabilities
Deferred tax liability
19
371,332
324,722
(371,332)
(324,722)
Net assets
11,103,423
9,727,267
Capital and reserves
Called up share capital
21
50,000
50,000
Profit and loss reserves
11,053,423
9,677,267
Total equity
11,103,423
9,727,267
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:
Mr S Bishop
Director
Company Registration No. 02765374
CELTIC RECYCLING LTD.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 November 2021
50,000
6,869,136
6,919,136
Year ended 31 October 2022:
Profit and total comprehensive income for the year
-
3,040,131
3,040,131
Dividends
10
-
(232,000)
(232,000)
Balance at 31 October 2022
50,000
9,677,267
9,727,267
Year ended 31 October 2023:
Profit and total comprehensive income for the year
-
1,626,156
1,626,156
Dividends
10
-
(250,000)
(250,000)
Balance at 31 October 2023
50,000
11,053,423
11,103,423
CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 11 -
1
Accounting policies
Company information

Celtic Recycling Ltd. is a private company limited by shares incorporated in England and Wales. The registered office is Unit 37, Village Farm Industrial Estate, Pyle, Bridgend, Mid Glamorgan, United Kingdom, CF33 6BZ.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Celtic Utilities Group Limited as at 31 October 2023 and these financial statements may be obtained from Companies House.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

1.3
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.

CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 12 -
1.4
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:

Land and buildings Freehold
2% on cost
Plant and machinery
10 - 33% on cost
Fixtures, fittings & equipment
5 - 10% on cost
Motor vehicles
10 - 33% on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

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

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.

1.6
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 RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 13 -
1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

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

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

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

Other financial assets

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

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities

Basic financial liabilities, including creditors and bank loans, 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 receipts 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 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 though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

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

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 15 -
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.

 

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

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.12
Retirement benefits

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

1.13
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

1.14
Government grants

Grants are credited to deferred revenue. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.

1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’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

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Waste management services
17,131,079
17,093,261
2023
2022
£
£
Other significant revenue
Interest income
84,642
17,785
Grants received
8,100
8,100
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
15,888,650
14,872,958
Rest of the World
1,242,429
2,220,303
17,131,079
17,093,261
CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
871
(52,923)
Government grants
(8,100)
(8,100)
Fees payable to the company's auditor for the audit of the company's financial statements
16,995
15,950
Depreciation of owned tangible fixed assets
393,379
379,175
Depreciation of tangible fixed assets held under finance leases
54,398
43,217
Profit on disposal of tangible fixed assets
(5,063)
-
5
Employees

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

2023
2022
Number
Number
Operatives
68
64
Administrative
22
18
Directors
6
5
Total
96
87

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,492,699
3,799,542
Social security costs
479,089
438,209
Pension costs
162,490
103,775
5,134,278
4,341,526
CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 18 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
540,693
391,477
Company pension contributions to defined contribution schemes
20,753
-
561,446
391,477

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
127,177
115,151
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
84,642
17,785
8
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
12,184
6,549
Other interest
13,109
25,015
46,596
72,049
CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 19 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
380,121
733,164
Adjustments in respect of prior periods
(3,737)
3,737
Total current tax
376,384
736,901
Deferred tax
Origination and reversal of timing differences
46,610
(9,282)
Total tax charge
422,994
727,619

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
2,049,150
3,767,750
Expected tax charge based on the standard rate of corporation tax in the UK of 22.52% (2022: 19.00%)
461,469
715,873
Tax effect of expenses that are not deductible in determining taxable profit
37,387
15,853
Adjustments in respect of prior years
(3,737)
2,289
Effect of change in corporation tax rate
4,628
(1,880)
Group relief
(70,374)
-
0
Permanent capital allowances in excess of depreciation
(6,379)
(4,516)
Taxation charge for the year
422,994
727,619
10
Dividends
2023
2022
£
£
Interim paid
250,000
232,000
CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
11
Tangible fixed assets
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 November 2022
2,766,485
4,931,145
1,083,270
799,298
9,580,198
Additions
-
0
160,275
78,604
337,979
576,858
Disposals
-
0
-
0
-
0
(26,916)
(26,916)
At 31 October 2023
2,766,485
5,091,420
1,161,874
1,110,361
10,130,140
Depreciation and impairment
At 1 November 2022
571,736
3,786,625
557,059
789,402
5,704,822
Depreciation charged in the year
52,355
261,803
40,188
93,431
447,777
Eliminated in respect of disposals
-
0
-
0
-
0
(26,916)
(26,916)
At 31 October 2023
624,091
4,048,428
597,247
855,917
6,125,683
Carrying amount
At 31 October 2023
2,142,394
1,042,992
564,627
254,444
4,004,457
At 31 October 2022
2,194,749
1,144,520
526,211
9,896
3,875,376

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

2023
2022
£
£
Plant and machinery
266,511
170,830
Motor vehicles
186,628
-
0
453,139
170,830
12
Stocks
2023
2022
£
£
Raw materials and consumables
927,687
1,000,325
CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,950,634
2,737,330
Amounts owed by group undertakings
3,482,918
465,835
Other debtors
1,575,082
208,094
Prepayments and accrued income
1,847,955
2,111,776
9,856,589
5,523,035

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

14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
16
-
0
170,728
Obligations under finance leases
17
141,240
58,449
Trade creditors
908,683
734,236
Amounts owed to group undertakings
300,000
50,172
Corporation tax
85,918
736,901
Other taxation and social security
162,901
523,855
Government grants
18
8,100
8,100
Accruals and deferred income
2,192,604
2,191,614
3,799,446
4,474,055
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
-
0
907,215
Obligations under finance leases
17
218,024
90,177
Government grants
18
294,700
302,800
512,724
1,300,192
CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 22 -
16
Loans and overdrafts
2023
2022
£
£
Bank loans
-
0
1,077,943
Payable within one year
-
0
170,728
Payable after one year
-
0
907,215

The bank loans and overdrafts disclosed 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.

17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
141,240
58,449
In two to five years
218,024
90,177
359,264
148,626

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

18
Government grants
2023
2022
£
£
Arising from government grants
302,800
310,900
Included in the financial statements as follows:
Current liabilities
8,100
8,100
Non-current liabilities
294,700
302,800
302,800
310,900

The Company 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 Company 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.

CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 23 -
19
Deferred taxation

Deferred tax assets and liabilities are offset where the 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:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
373,437
403,409
Other short term timing differences
-
(962)
Other short term timing differences
(2,105)
(77,725)
371,332
324,722
2023
Movements in the year:
£
Liability at 1 November 2022
324,722
Charge to profit or loss
46,610
Liability at 31 October 2023
371,332

The deferred tax liability set out above is expected to reverse 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 year ended 31 October 2023.
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
162,490
103,775

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 24 -
21
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
50,000 Ordinary Shares of £1 each
50,000
50,000
22
Operating lease commitments

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

2023
2022
£
£
Within one year
285,019
329,151
Between two and five years
16,932
12,044
301,951
341,195
23
Financial commitments, guarantees and contingent liabilities

During the year, Celtic Recycling Limited provided a cross guarantee and debenture over the debts and liabilities of Celtic Utilities Limited and Transerv Europe Limited. This charge remains outstanding at the year end.

 

Celtic Utilities Limited is the parent company and Transerv Europe Limited is a fellow group company.

CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 25 -
24
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties, who, up to and including 31 October 2021 were related by virute of common shareholders, but who after 1 November 2022, became fellow group companies as part of the group headed by Celtic Utilities Group Limited:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Other related parties
565,804
373,835
246,028
284,000
Dividends
2023
2022
£
£
Entities with control, joint control or significant influence over the company
250,000
232,000

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
300,000
50,172

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
2,789,865
150,000
Other related parties
693,053
315,835

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

 

There is also a balance due from the directors of the company as at 31 October 2023 of £1,575,000 (2022: £nil), which is included in other debtors due within one year. This was settled subsequent to the year end.

CELTIC RECYCLING LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 26 -
25
Ultimate controlling party

The directors regard Celtic Utilities Group Limited, a company incorporated in England and Wales, as the immediate and ultimate parent company. Celtic Utilities Group Limited has a 100% interest in the equity capital of Celtic Recycling Limited. The registered office of Celtic Utilities Group Limited is Ty Derw Lime Tree Court, Cardiff Gate Business Park, Cardiff, CF23 8AB.

 

The parent company of the largest and smallest group to include the Company in its consolidated financial statements is Celtic Utilities Group Limited. Copies of its consolidated financial statements are available from Companies House.

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