Company Registration No. 09029846 (England and Wales)
EAST MIDLANDS WASTE MANAGEMENT LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 MAY 2023
6 Queen Street
Leeds
West Yorkshire
LS1 2TW
EAST MIDLANDS WASTE MANAGEMENT LIMITED
CONTENTS
Page
Company information
1
Strategic report
2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Income statement
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
EAST MIDLANDS WASTE MANAGEMENT LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr S Reilly
Ms J B Swindell
Company number
09029846
Registered office
20 Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
England
PE2 6LR
Auditor
TC Group
6 Queen Street
Leeds
West Yorkshire
LS1 2TW
Business address
Saxon Works
Peterborough Road
Whittlesey
Peterborough
United Kingdom
PE7 1PJ
EAST MIDLANDS WASTE MANAGEMENT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 MAY 2023
- 2 -

The directors present the strategic report for the year ended 30 May 2023.

Fair review of the business

The company's main business activity during the period was the purchase and resale and hire pf plant and equipment to the construction industry sector. Also in this period, the company were brokers to the waste industry and collected waste from customers.

Principal risks and uncertainties

As for many businesses our size, the economic climate in which we operate will have some effect on the company's operations for the forthcoming period.

The company is very dependent on the strength of the construction industry and the risk is if this industry is shrinking then the company will find it difficult to perform well as there many not be such a great need for plant and equipment to be hired or bought.

Changes in legislation and the importance of the carbon footprint will ultimately impact the waste industry.

The company have continued to meet its obligations in regards to compliance with the standards set by the Environment Agency in regards to the waste.

This includes a commitment of removing waste from the site. The additional expected costs in removing this is disclosed in note 8 of the financial statements.

With these risks in mind, we are aware that any plans for the future development of the business may be outside of the company's control due to unforeseen events.

 

Development and performance

The company has made a profit for the period due to continuing reinvesting in its plant and equipment to ensure customers are offered a better selection of new and improved machinery for sale and for hire.

The company have been able to maintain a large customer base in the UK as well as supplying plant abroad and focusing on the higher margin hire and plant sales sectors.

In addition the company has continued with the collection of waste from customers and to look to increase the value of work from this sector which will result in further improved profits.

The company is continually reviewing the market position and its own business strategies to ensure it meets customers needs and maintains its gross margins.

Key performance indicators

We consider that our key performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, net profit and return on capital employed.

On behalf of the board

Mr S Reilly
Director
28 August 2024
EAST MIDLANDS WASTE MANAGEMENT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 MAY 2023
- 3 -

The directors present their annual report and financial statements for the year ended 30 May 2023.

Principal activities

The principal activity of the company continued to be that of the buying and selling and hiring of plant.

 

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final 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 Reilly
Ms J B Swindell
Auditor

In accordance with the company's articles, a resolution proposing that TC Group be reappointed as auditor of the company will be put at a General Meeting.

Energy and carbon report

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

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 Reilly
Director
28 August 2024
EAST MIDLANDS WASTE MANAGEMENT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 MAY 2023
- 4 -

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.

EAST MIDLANDS WASTE MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EAST MIDLANDS WASTE MANAGEMENT LIMITED
- 5 -
Opinion

We have audited the financial statements of East Midlands Waste Management Limited (the 'company') for the year ended 30 May 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity, the 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 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.

EAST MIDLANDS WASTE MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EAST MIDLANDS WASTE MANAGEMENT LIMITED
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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.

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

 

EAST MIDLANDS WASTE MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EAST MIDLANDS WASTE MANAGEMENT LIMITED
- 7 -

Our approach was as follows:

 

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.

We obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in which it operates. We determined the following laws and regulations of most significance were: Companies Act 2006, UK GAAP and UK corporate taxation laws.

 

We obtained an understanding of how the company complies with those legal and regulatory frameworks by making inquiries of management.

 

We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur.

EAST MIDLANDS WASTE MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EAST MIDLANDS WASTE MANAGEMENT LIMITED
- 8 -

Audit procedures performed by the engagement team included:

· Identifying and assessing the effectiveness of controls management has in place to prevent and

detect fraud;

· Understanding how those charged with governance considered and addressed the potential for

override of controls or other inappropriate influence over the financial reporting process;

· Challenging assumptions and judgements made by management in its significant accounting

estimates;

· Identifying and testing journal entries, in particular any journal entries posted with unusual

account combinations; and

· Assessing the extent of compliance with the relevant laws and regulations.

 

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulation are from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

This report is made solely to the company's 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.

Mark Hunter FCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
28 August 2024
6 Queen Street
Leeds
West Yorkshire
LS1 2TW
EAST MIDLANDS WASTE MANAGEMENT LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 30 MAY 2023
- 9 -
2023
2022
Notes
£
£
Revenue
3
29,390,794
25,998,634
Cost of sales
(26,833,706)
(21,177,372)
Gross profit
2,557,088
4,821,262
Administrative expenses
(1,106,035)
(341,647)
Operating profit
4
1,451,053
4,479,615
Finance costs
7
(42,741)
(362,642)
Profit before taxation
1,408,312
4,116,973
Tax on profit
8
(184,335)
(846,409)
Profit for the financial year
1,223,977
3,270,564

The income statement has been prepared on the basis that all operations are continuing operations.

EAST MIDLANDS WASTE MANAGEMENT LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 MAY 2023
30 May 2023
- 10 -
30 May 2023
31 May 2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
9
6,332,484
6,806,241
Current assets
Inventories
10
4,974,072
4,489,981
Trade and other receivables
11
12,860,009
11,712,563
Cash and cash equivalents
1,366,189
793,003
19,200,270
16,995,547
Current liabilities
12
(4,873,538)
(4,474,086)
Net current assets
14,326,732
12,521,461
Total assets less current liabilities
20,659,216
19,327,702
Non-current liabilities
13
(805,245)
(1,294,149)
Provisions for liabilities
Provisions
14
7,656,314
7,140,158
Deferred tax liability
15
1,574,429
1,494,144
(9,230,743)
(8,634,302)
Net assets
10,623,228
9,399,251
Equity
Called up share capital
17
100
100
Retained earnings
10,623,128
9,399,151
Total equity
10,623,228
9,399,251
The financial statements were approved by the board of directors and authorised for issue on 28 August 2024 and are signed on its behalf by:
Mr S Reilly
Director
Company registration number 09029846 (England and Wales)
EAST MIDLANDS WASTE MANAGEMENT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 MAY 2023
- 11 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 June 2021
100
6,128,587
6,128,687
Year ended 31 May 2022:
Profit and total comprehensive income
-
3,270,564
3,270,564
Balance at 31 May 2022
100
9,399,151
9,399,251
Year ended 30 May 2023:
Profit and total comprehensive income
-
1,223,977
1,223,977
Balance at 30 May 2023
100
10,623,128
10,623,228
EAST MIDLANDS WASTE MANAGEMENT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 MAY 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
3,152,993
3,576,241
Interest paid
(42,741)
(362,642)
Income taxes paid
(300,080)
(92,542)
Net cash inflow from operating activities
2,810,172
3,121,057
Investing activities
Purchase of property, plant and equipment
(2,562,127)
(5,546,613)
Proceeds from disposal of property, plant and equipment
1,794,000
1,910,325
Repayment of loans
(644,483)
(161,972)
Net cash used in investing activities
(1,412,610)
(3,798,260)
Financing activities
Payment of finance leases obligations
(824,376)
1,245,497
Net cash (used in)/generated from financing activities
(824,376)
1,245,497
Net increase in cash and cash equivalents
573,186
568,294
Cash and cash equivalents at beginning of year
793,003
224,709
Cash and cash equivalents at end of year
1,366,189
793,003
EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 MAY 2023
- 13 -
1
Accounting policies
Company information

East Midlands Waste Management Limited is a private company limited by shares incorporated in England and Wales. The registered office is 20 Commerce Road, Lynch Wood, Peterborough, Cambridgeshire, England, PE2 6LR.

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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

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
Revenue

Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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.

1.4
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
1
Accounting policies
(Continued)
- 14 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Plant and equipment
15% reducing balance
Fixtures and fittings
20% straight line

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

1.5
Impairment of non-current 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
Inventories

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

 

Inventories held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories 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.

EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
1
Accounting policies
(Continued)
- 15 -
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, 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.

1.8
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 statement of financial position 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 trade and other receivables 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.

EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including trade and other payables, 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 payables 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 payables 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 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.

EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
1
Accounting policies
(Continued)
- 17 -
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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, 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
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.12
Employee benefits

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

EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
1
Accounting policies
(Continued)
- 18 -
1.13
Retirement benefits

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

1.14
Leases

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

 

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

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.15
Foreign exchange

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

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the 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.

3
Revenue
2023
2022
£
£
Revenue analysed by class of business
Waste sales
10,505,437
10,327,733
Plant sales
17,558,722
14,953,884
Hire income
1,326,635
717,017
29,390,794
25,998,634
EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
3
Revenue
(Continued)
- 19 -

The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.

4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
25,000
25,000
Depreciation of owned property, plant and equipment
802,443
616,662
Loss/(profit) on disposal of property, plant and equipment
439,441
(341,532)
Operating lease charges
144,000
144,000
5
Employees

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

2023
2022
Number
Number
Production staff
9
9
Administrative staff
1
1
Management staff
1
1
Total
11
11

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
535,034
506,336
Social security costs
43,851
134,224
Pension costs
9,908
7,331
588,793
647,891
EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
- 20 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
123,200
150,000
Company pension contributions to defined contribution schemes
2,430
2,034
125,630
152,034

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

7
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on invoice finance arrangements
-
0
9,890
Other interest on financial liabilities
750
200
750
10,090
Other finance costs:
Interest on finance leases and hire purchase contracts
41,637
82,497
Other interest
354
270,055
42,741
362,642
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
104,050
-
0
Deferred tax
Origination and reversal of timing differences
80,285
846,409
Total tax charge
184,335
846,409
EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
8
Taxation
(Continued)
- 21 -

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
1,408,312
4,116,973
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
352,078
782,225
Tax effect of expenses that are not deductible in determining taxable profit
917
561
Unutilised tax losses carried forward
-
0
151,677
Effect of change in corporation tax rate
(26,935)
-
0
Permanent capital allowances in excess of depreciation
(141,725)
(934,463)
Movement in deferred tax
-
0
846,409
Taxation charge for the year
184,335
846,409
9
Property, plant and equipment
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 June 2022
7,724,424
72,583
7,797,007
Additions
2,562,127
-
0
2,562,127
Disposals
(2,560,537)
-
0
(2,560,537)
At 30 May 2023
7,726,014
72,583
7,798,597
Depreciation and impairment
At 1 June 2022
967,467
23,299
990,766
Depreciation charged in the year
787,926
14,517
802,443
Eliminated in respect of disposals
(327,096)
-
0
(327,096)
At 30 May 2023
1,428,297
37,816
1,466,113
Carrying amount
At 30 May 2023
6,297,717
34,767
6,332,484
At 31 May 2022
6,756,957
49,284
6,806,241
EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
- 22 -
10
Inventories
2023
2022
£
£
Finished goods and goods for resale
4,974,072
4,489,981
11
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
2,532,531
2,344,636
Corporation tax recoverable
272,179
72,502
Other receivables
9,458,233
9,269,259
Prepayments and accrued income
597,066
26,166
12,860,009
11,712,563

Corporation tax recoverable is due after 1 year.

12
Current liabilities
2023
2022
Notes
£
£
Obligations under finance leases
721,363
1,056,835
Trade payables
2,122,278
1,690,795
Corporation tax
303,727
300,080
Other taxation and social security
1,029,987
1,056,829
Other payables
2,073
1,706
Accruals and deferred income
694,110
367,841
4,873,538
4,474,086

Included within creditors are amounts due in relation to hire purchase agreements which are secured against the asset it is funding.

13
Non-current liabilities
2023
2022
Notes
£
£
Obligations under finance leases
805,245
1,294,149
EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
13
Non-current liabilities
(Continued)
- 23 -

Included within creditors are amounts due in relation to hire purchase agreements which are secured against the asset it is funding.

14
Provisions for liabilities
2023
2022
£
£
7,656,314
7,140,158

The provision relates to the removing of waste from the site.

Movements on provisions:
£
At 1 June 2022
7,140,158
Additional provisions in the year
516,156
At 30 May 2023
7,656,314
15
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,574,429
1,693,719
Tax losses
-
(199,575)
1,574,429
1,494,144
EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
15
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Liability at 1 June 2022
1,494,144
Charge to profit or loss
80,285
Liability at 30 May 2023
1,574,429

 

16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
9,908
7,331

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.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
100
100
100
100
18
Related party transactions
Transactions with related parties

During the year the company purchased goods from Saxon Works Limited amounting to £144,000 (2022 : £155,622). At the year end £5,892,108 (2022 : £56,939,446) was due from Saxon Works Limited and £603,632 (2022 : £666,259) was due from Whittlesey Properties Limited.

19
Directors' transactions

At 30 May 2023, the directors owed the company £806,455 (£161,972). Interest was charged at a rate of Nil.

Dividends totalling £0 (2022 - £0) were paid in the year in respect of shares held by the company's directors.

EAST MIDLANDS WASTE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2023
- 25 -
20
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,223,977
3,270,564
Adjustments for:
Taxation charged
184,335
846,409
Finance costs
42,741
362,642
Loss/(gain) on disposal of property, plant and equipment
439,441
(341,532)
Depreciation and impairment of property, plant and equipment
802,443
616,662
Increase in provisions
516,156
848,260
Movements in working capital:
Increase in inventories
(484,091)
(1,547,681)
Increase in trade and other receivables
(303,286)
(849,228)
Increase in trade and other payables
731,277
370,145
Cash generated from operations
3,152,993
3,576,241
21
Analysis of changes in net debt
1 June 2022
Cash flows
30 May 2023
£
£
£
Cash at bank and in hand
793,003
573,186
1,366,189
Obligations under finance leases
(2,350,984)
824,376
(1,526,608)
(1,557,981)
1,397,562
(160,419)
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