Company Registration No. 08188611 (England and Wales)
MCCARTHY MARLAND LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
MCCARTHY MARLAND LIMITED
COMPANY INFORMATION
Directors
Mr A P D Marland
Mr K D McCarthy
Mrs K M Marland
Mr J L McCarthy
Company number
08188611
Registered office
82 St John Street
London
EC1M 4JN
Auditor
Beavis Morgan Audit Limited
82 St John Street
London
EC1M 4JN
MCCARTHY MARLAND LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 36
MCCARTHY MARLAND LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

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

Principal Activities

The group trades as a full service, waste management business from three licenced properties in Bristol, Gloucestershire and Oxfordshire. It also owns its own landfill site, based in Somerset. All properties are freehold and owned by the Group.

Aquisitions

In July 2022 the Group completed its largest acquisition to date, namely Hughes and Salvidge Waste Management Ltd (‘H&S’). This effectively doubled the size of the Group and brought new licenced properties in Tetbury (8.8 acres) and in Wantage (1.11 acres).The purchase price was £10.75m, with £10.025m being paid at, or shortly after, completion and the balance of £750k being payable over five years. The purchase price was based on the cash balances held by H & S at completion, its freehold properties and a multiple of its historic EBITDA. The acquisition was funded from the Group’s own resources, and new funding provided by Shawbrook Bank.

 

Additionally, the Group acquired MM Property Assets Limited from the directors for £900k and which was satisfied by a loan note. The purchase price was based on the net asset value of the company.

 

Post acquisition the profitability of the Tetbury site turned out to be less than indicated during the due diligence process. Turnover was as expected however direct costs were exceptional and the acquired properties turned out to be under insured for the waste management activities in place. Historic, and inherited, management control and direction were lacking which consequently compounded the problem for a further 6 months post-acquisition and impacted the timing of operational synergies. Additionally, the financial controller of H & S sadly passed away shortly before completion.

 

The directors of McCarthy Marland (Recycling) Ltd made a number of personnel changes during the early months of 2023 to secure control of direct costs and eliminated some of the old working practices. Consequently, the planned rationalisation and synergies of the combined businesses took longer than expected to implement, which impacted negatively on profitability during the year. Residual waste disposal costs during the year increased because a third-party disposal route changed hands. However, to mitigate this, waste processing techniques have been improved to establish greater segregation of recyclates from residual waste. This adjustment has restored the reliability of sustainable operating margins.

Trading and financial position
Interest rates started to increase soon after the acquisition, from August 2022, which by the end of the financial year had added an additional £30k per month of finance cost into the business.
Unaudited management accounts show an improved trading position for the year to 31st March 2024 with turnover at c.£19m, PBT c.£252K and an EBITDA of c.£2.8m.  We also plan the sale of two surplus properties from the group in 2024 to realise c.£800k.  There were additional legal and professional fees of around £150k relating to the acquisition.  As part of the accounting for the acquisition of MMPA we have impaired the fair value of properties to allow for improvements made by the leaseholder, McCarthy Marland (Recycling).
The 2023 accounts suffered delays in filing owing to the complexities of the first audit across multiple group companies, including the acquisitions minus their financial controller.  The 2024 accounts will be filed on time.
The directors are very confident about the current positioning of the business for the next stage of its development, both in terms of revenue and EBITDA growth and operational efficiency.
MCCARTHY MARLAND LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -

Net debt was £9.94m at 31st March, 2023 and, at the date of this report it has reduced to £8.57m. It will further reduce by circa £800k on the sale of the two properties referred to above and is projected to reduce to circa £7m by 31st March 2025. This will reduce the ratio of net debt to EBITDA to circa 2 times, which is within our target range.

2024 (unaudited)
2023
Movement
£'000s
£'000s
£'000s
Turnover
19,007
16,253
2,754
Profit/ (Loss) before tax
252
(1,144)
1,396
EBITDA (before fair value movements on investment properties)
2,843
1,403
1,440

On behalf of the board

Mr A P D Marland
Director
30 August 2024
MCCARTHY MARLAND LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

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

Principal activities

The principal activity of the company is that of a holding company, whose subsidiaries trade in waste management.

Results and dividends

Ordinary dividends were paid amounting to £282,600. The directors do not recommend payment of a further dividend.

Directors

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

Mr A P D Marland
Mr K D McCarthy
Mrs K M Marland
Mr J L McCarthy
Statement of disclosure to auditor

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

On behalf of the board
Mr A P D Marland
Director
30 August 2024
MCCARTHY MARLAND LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

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

MCCARTHY MARLAND LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MCCARTHY MARLAND LIMITED
- 5 -

Qualified opinion on financial statements

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

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

Basis for qualified opinion

As stated in note 2 a critical judgement is required in determining the fair values of assets, liabilities and contingent liabilities acquired through business combinations. As stated in note 26, on 29 July 2022 the group acquired the issued share capital of McCarthy Marland H1 Limited (formerly Hughes & Salvidge Waste Management Ltd) and all its subsidiaries. Accounting records and documentation relating to the period ended 30 June 2022 have been lost or misplaced. Given this we were unable to determine whether any adjustments might be required to the fair values of the business acquired, and therefore obtain sufficient appropriate evidence to support the value of the Goodwill included within these financial statements. The carrying value of goodwill pertaining to the acquisition of McCarthy Marland H1 Limited is £3,632,761 (2022: £nil).

 

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

MCCARTHY MARLAND LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MCCARTHY MARLAND LIMITED
- 6 -

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:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

MCCARTHY MARLAND LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MCCARTHY MARLAND LIMITED
- 7 -
Extent to which the audit was considered capable of detcting irregularities, including fraud

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

 

The following laws and regulations were identified as being of significance to the entity:

 

 

 

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

 

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

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.

Matthew Burge (Senior Statutory Auditor)
For and on behalf of Beavis Morgan Audit Limited
30 August 2024
Chartered Accountants
Statutory Auditor
82 St John Street
London
EC1M 4JN
MCCARTHY MARLAND LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
as restated
Notes
£
£
Turnover
3
16,253,079
7,913,669
Cost of sales
(11,783,481)
(5,035,406)
Gross profit
4,469,598
2,878,263
Administrative expenses
(4,373,315)
(1,968,783)
Other operating income
15,560
54,400
Operating profit
4
111,843
963,880
Interest receivable and similar income
7
169
4
Interest payable and similar expenses
8
(809,312)
(89,089)
Non-cash fair value losses on investment properties
13
(446,690)
-
0
(Loss)/profit before taxation
(1,143,990)
874,795
Tax on (loss)/profit
9
82,584
(171,588)
(Loss)/profit for the financial year
(1,061,406)
703,207
(Loss)/profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
MCCARTHY MARLAND LIMITED
GROUP BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
11
3,669,377
57,816
Tangible assets
12
4,869,286
3,170,012
Investment property
13
7,885,000
-
0
16,423,663
3,227,828
Current assets
Stocks
16
22,971
27,633
Debtors
17
2,697,983
2,167,700
Cash at bank and in hand
342,696
312,527
3,063,650
2,507,860
Creditors: amounts falling due within one year
18
(6,096,972)
(2,213,495)
Net current (liabilities)/assets
(3,033,322)
294,365
Total assets less current liabilities
13,390,341
3,522,193
Creditors: amounts falling due after more than one year
19
(11,243,829)
(1,360,765)
Provisions for liabilities
Provisions
22
452,302
452,302
Deferred tax liability
23
1,687,804
358,714
(2,140,106)
(811,016)
Net assets
6,406
1,350,412
Capital and reserves
Called up share capital
25
2,000
2,000
Profit and loss reserves
4,406
1,348,412
Total equity
6,406
1,350,412

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 30 August 2024 and are signed on its behalf by:
30 August 2024
Mr A P D Marland
Director
Company registration number 08188611 (England and Wales)
MCCARTHY MARLAND LIMITED
COMPANY BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 10 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Investments
14
13,920,506
1,764,393
Current assets
Debtors
17
595,229
163,271
Cash at bank and in hand
980
570
596,209
163,841
Creditors: amounts falling due within one year
18
(3,939,548)
(809,184)
Net current liabilities
(3,343,339)
(645,343)
Total assets less current liabilities
10,577,167
1,119,050
Creditors: amounts falling due after more than one year
19
(10,158,032)
-
Net assets
419,135
1,119,050
Capital and reserves
Called up share capital
25
2,000
2,000
Profit and loss reserves
417,135
1,117,050
Total equity
419,135
1,119,050

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £417,315 (2022 - £220,562 profit).

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 30 August 2024 and are signed on its behalf by:
30 August 2024
Mr A P D Marland
Director
Company registration number 08188611 (England and Wales)
MCCARTHY MARLAND LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 March 2022:
Balance at 1 April 2021
2,000
877,805
879,805
Year ended 31 March 2022:
Profit and total comprehensive income
-
703,207
703,207
Dividends
10
-
(232,600)
(232,600)
Balance at 31 March 2022
2,000
1,348,412
1,350,412
Year ended 31 March 2023:
Loss and total comprehensive income
-
(1,061,406)
(1,061,406)
Dividends
10
-
(282,600)
(282,600)
Balance at 31 March 2023
2,000
4,406
6,406
MCCARTHY MARLAND LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 31 March 2022:
Balance at 1 April 2021
2,000
1,129,088
1,131,088
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
220,562
220,562
Dividends
10
-
(232,600)
(232,600)
Balance at 31 March 2022
2,000
1,117,050
1,119,050
Year ended 31 March 2023:
Loss and total comprehensive income for the year
-
(417,315)
(417,315)
Dividends
10
-
(282,600)
(282,600)
Balance at 31 March 2023
2,000
417,135
419,135
MCCARTHY MARLAND LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
3,476,179
1,430,017
Interest paid
(809,312)
(89,089)
Income taxes refunded/(paid)
15,616
(225,041)
Net cash inflow from operating activities
2,682,483
1,115,887
Investing activities
Business combinations (net of cash acquired)
(7,943,746)
-
Purchase of tangible fixed assets
(366,670)
(320,396)
Proceeds from disposal of tangible fixed assets
286,867
155,748
Interest received
169
4
Net cash used in investing activities
(8,023,380)
(164,644)
Financing activities
Proceeds from borrowings
9,702,108
-
Repayment of borrowings
(3,478,796)
-
Repayment of bank loans
-
(51,697)
Payment of finance leases obligations
(569,646)
(595,214)
Dividends paid to equity shareholders
(282,600)
(232,600)
Net cash generated from/(used in) financing activities
5,371,066
(879,511)
Net increase in cash and cash equivalents
30,169
71,732
Cash and cash equivalents at beginning of year
312,527
240,795
Cash and cash equivalents at end of year
342,696
312,527
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 14 -
1
Accounting policies
Company information

McCarthy Marland Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 82 St John Street, London, EC1M 4JN.

 

The group consists of McCarthy Marland Limited and all of its subsidiaries (note 15)

1.1
Accounting convention

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

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

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

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

 

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company McCarthy Marland Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 March 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

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

1.3
Going concern

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

1.4
Turnover

Turnover represents amounts receivable for waste services provided, net of VAT and trade discounts. Turnover is recognised in the financial statements when the waste service is provided to the customer.

MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Freehold land and buildings
Straight line over 50 years
Leasehold improvements
Straight line over 50 years
Plant and equipment
25% reducing balance
Fixtures and fittings
Straight line over 7 years
Computers
25% reducing balance
Motor vehicles
25% reducing balance

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

1.7
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss. Property rented to a group entity is accounted for at fair value with changes in fair value recognised in profit or loss.

1.8
Fixed asset investments

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.9
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -

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.

1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

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.

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial instruments

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

 

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

 

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

Basic financial assets

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

MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -
Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

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

Derecognition of financial liabilities

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

1.13
Equity instruments

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

1.14
Taxation

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

MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 18 -
Current tax

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

Deferred tax

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

 

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

1.15
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group 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.

1.16
Employee benefits

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

 

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

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17
Retirement benefits

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

MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 19 -
1.18
Leases

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

 

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

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

1.19
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.20
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 group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

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

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Fair value of assets, liabilities and contingent liabilities acquired through business combinations

Judgement is required in determining the fair value of assets, liabilities and contingent liabilities acquired through business combinations. The fair value of assets, liabilities and contingent liabilities acquired through business combinations is disclosed in note 26.

MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 20 -
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.

Useful economic lives of intanigble and tangible assets

Estimation is required in determining the useful lives of such assets and their residual values. The amortisation and depreciation charge is sensitive to changes in the estimated useful economic lives of such assets. The carrying value of intangible assets and tangible assets is disclosed in notes 12 and 13 respectively.

Discounting of deferred consideration

A discount rate of 6% per annum has been used to determine the present value of deferred consideration. The carrying value of deferred consideration is sensitive to changes in the discount rate used. The carrying value of deferred consideration is disclosed in note 21.

Provision for aftercare and site restoration

Estimation is required in determining the costs required to restore the Whiscombe Hill Landfill Site upon the group ceasing to use it. The level of costs expected are uncertain. Management have estimated that ongoing leachate management will not be required beyond 30 years of the landfill site closing and that environmental and pollution monitoring and control will not be require beyond 20 years of the site closing. The Whiscombe Hill Landfill Site is estimated to close in 2036. The carrying value of the provisions is disclosed in Note 22.

3
Turnover

All turnover arises in the UK and relates to the principal activity of the group.

 

Included with turnover is an amount of £8,720,251 (2022: £7,902,543) derived from the Bristol site. Turnover derived from the Tetbury and Wantage sites amounted to £7,479,688 (2022: £12,257,630).

 

4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
-
(8,273)
Fees payable to the group's auditor for the audit of the group's financial statements
40,350
-
Depreciation of owned tangible fixed assets
1,000,967
624,811
Loss/(profit) on disposal of tangible fixed assets
11,765
(72,700)
Amortisation of intangible assets
289,888
12,993
Operating lease charges
919,649
392,567
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
5
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Operations
107
31
-
-
Administration
21
17
4
4
Total
128
48
4
4

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
3,424,217
1,345,500
-
0
-
0
Social security costs
359,005
126,721
-
-
Pension costs
139,313
99,591
-
0
-
0
3,922,535
1,571,812
-
0
-
0
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
49,296
61,088
Company pension contributions to defined contribution schemes
24,730
74,557
74,026
135,645
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
42
4
Other interest income
127
-
Total income
169
4
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
668,694
17,974
Interest on invoice finance arrangements
57,143
20,389
Interest on other loans
9,000
-
Interest on finance leases and hire purchase contracts
74,475
50,726
Total finance costs
809,312
89,089
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
95,982
33,705
Adjustments in respect of prior periods
(16,591)
(4,981)
Total current tax
79,391
28,724
Deferred tax
Origination and reversal of timing differences
(161,975)
142,864
Total tax (credit)/charge
(82,584)
171,588

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(1,143,990)
874,795
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(217,358)
166,211
Tax effect of expenses that are not deductible in determining taxable profit
45,714
24,838
Tax effect of income not taxable in determining taxable profit
(59,179)
-
0
Adjustments in respect of prior years
(8,626)
(21,421)
Depreciation on assets not qualifying for tax allowances
6,232
(41,072)
Amortisation on assets not qualifying for tax allowances
55,079
2,469
Research and development tax credit
-
0
(45,315)
Other permanent differences
357
185
Effect of change in deferred tax rate
95,197
85,693
Taxation (credit)/charge
(82,584)
171,588
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
10
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Interim paid
282,600
232,600
11
Intangible fixed assets
Group
Goodwill
Negative goodwill
Total
£
£
£
Cost
At 1 April 2022
211,997
-
0
211,997
Additions - business combinations
3,927,309
(25,860)
3,901,449
At 31 March 2023
4,139,306
(25,860)
4,113,446
Amortisation and impairment
At 1 April 2022
154,181
-
0
154,181
Amortisation charged for the year
315,748
(25,860)
289,888
At 31 March 2023
469,929
(25,860)
444,069
Carrying amount
At 31 March 2023
3,669,377
-
0
3,669,377
At 31 March 2022
57,816
-
0
57,816
The company had no intangible fixed assets at 31 March 2023 or 31 March 2022.

Goodwill includes goodwill on the acquisition of the subsidiaries, McCarthy Marland (Recycling) Limited and Westcombe Waste Limited. The carrying amount of goodwill is £36,616 (2022: £57,816) and has a remaining amortisation period of 1.75 years

 

Goodwill additions relate to goodwill recognised on the acquisition of the subsidiary, McCarthy Marland H1 Limited (formerly Hughes & Salvidge Waste Management Limited). The carrying amount of goodwill is £3,632,761 (2022: £nil) and has a remaining amortisation period of 9.25 years.

 

Negative goodwill relates to acquisition of the subsidiary, MM Property Assets Limited. The carrying amount of negative goodwill is £nil (2022: £nil).

 

MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
12
Tangible fixed assets
Group
Freehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 April 2022
1,434,039
982,879
2,598,413
132,376
167,433
1,884,286
7,199,426
Additions
26,321
-
0
119,655
14,660
20,546
185,488
366,670
Business combinations
5,475,931
-
0
2,266,085
-
0
-
0
625,170
8,367,186
Disposals
-
0
-
0
-
0
-
0
-
0
(298,632)
(298,632)
Transfers to investment property
(6,129,276)
-
0
-
0
-
0
-
0
-
0
(6,129,276)
At 31 March 2023
807,015
982,879
4,984,153
147,036
187,979
2,396,312
9,505,374
Depreciation and impairment
At 1 April 2022
427,520
637,891
1,795,421
87,516
157,367
923,699
4,029,414
Depreciation charged in the year
43,522
19,619
551,083
15,141
9,784
361,818
1,000,967
Eliminated in respect of disposals
-
0
-
0
-
0
-
0
-
0
(234,627)
(234,627)
Transfers to investment property
(159,666)
-
0
-
0
-
0
-
0
-
0
(159,666)
At 31 March 2023
311,376
657,510
2,346,504
102,657
167,151
1,050,890
4,636,088
Carrying amount
At 31 March 2023
495,639
325,369
2,637,649
44,379
20,828
1,345,422
4,869,286
At 31 March 2022
1,006,519
344,988
802,992
44,860
10,066
960,587
3,170,012
The company had no tangible fixed assets at 31 March 2023 or 31 March 2022.
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
12
Tangible fixed assets
(Continued)
- 25 -

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
1,386,639
486,738
-
0
-
0
Motor vehicles
900,111
934,182
-
0
-
0
Computers
-
0
1,495
-
0
-
0
2,286,750
1,422,415
-
-

The hire purchase liability is secured over the assets to which it belongs.

13
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 April 2022
-
-
Additions through business combinations
2,362,080
-
Transfers from tangible fixed assets
5,969,610
-
Net gains or losses through fair value adjustments
(446,690)
-
At 31 March 2023
7,885,000
-

The investment property balance relates to properties based in the United Kingdom. These properties are used by the group for trading purposes.

 

The fair value of the investment property has been determined based on valuations made by a RICS certified surveyor, who is independent from the group and its directors.

 

14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
13,920,506
1,764,393
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
14
Fixed asset investments
(Continued)
- 26 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 April 2022
1,764,393
Additions
12,156,113
At 31 March 2023
13,920,506
Carrying amount
At 31 March 2023
13,920,506
At 31 March 2022
1,764,393
15
Subsidiaries

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

Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
McCarthy Marland (Recycling) Limited
1
Waste management
Ordinary
100.00
-
Westcombe Waste Limited
2
Waste management
Ordinary
100.00
-
MM Property Assets Limited
2
Property company
Ordinary
100.00
-
McCarthy Marland H1 Limited
2
Waste management
Ordinary
100.00
-
McCarthy Marland H2 Limited
2
Waste management
Ordinary
-
100.00

Registered office addresses (all UK unless otherwise indicated):

1
Tetbury Commercial Recycling Centre, Babdown Airfield, Tetbury, Gloucester, United Kingdom, GL8 8YL
2
82 St. John Street, London, England, EC1M 4JN

The companies listed below are exempt from the requirements of UK Companies Act 2006 relating to the audit of individual financial statements by virtue of section 479A of the Act. The company has provided the subsidiaries listed below with a guarantee under section 479C of the Act thereby undertaking to guarantee all outstanding liabilities to which the subsidiary is subject to at the end of the financial period:

 

Register number
Company
04291229
McCarthy Marland (Recycling) Limited
02205997
Westcombe Waste Limited
10241145
MM PropertyAssets Limited
11531731
McCarthy arland H1 limited
05997601
McCarthy Marland H2 Limited
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 27 -
16
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
22,971
27,633
-
-
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,014,465
840,940
-
0
-
0
Amounts owed by group undertakings
-
90
488,151
87,920
Other debtors
593,928
1,095,252
64,951
-
0
Prepayments and accrued income
8,154
231,418
-
0
75,351
2,616,547
2,167,700
553,102
163,271
Amounts falling due after more than one year:
Deferred tax asset (note 23)
81,436
-
0
42,127
-
0
Total debtors
2,697,983
2,167,700
595,229
163,271
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
21
965,778
71,850
963,842
-
0
Obligations under finance leases
20
690,952
448,332
-
0
-
0
Directors' current account
21
163,693
97,693
19,693
19,693
Trade creditors
1,578,157
911,960
1,954
-
0
Amounts owed to group undertakings
-
0
90
2,624,389
787,991
Corporation tax payable
270,174
33,705
-
0
-
0
Other taxation and social security
631,494
86,312
-
-
Deferred consideration
21
150,000
-
0
150,000
-
0
Other creditors
1,137,887
452,122
84,000
-
Accruals and deferred income
508,837
111,431
95,670
1,500
6,096,972
2,213,495
3,939,548
809,184

Included within other creditors is £994,024 (2022: £nil) of funds owed by the group in relation to a receivables facility with Shawbrook Bank Limited. Fixed and floating charges over all property and assets of the group are held by Shawbrook Bank Limited.

MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 28 -
19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
21
8,738,266
704,864
8,738,266
-
0
Obligations under finance leases
20
935,797
655,901
-
0
-
0
Other borrowings
21
150,000
-
0
-
-
0
Loans from directors
21
900,000
-
0
900,000
-
0
Deferred consideration
21
519,766
-
0
519,766
-
0
11,243,829
1,360,765
10,158,032
-
20
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
690,952
448,332
-
0
-
0
In two to five years
935,797
655,901
-
0
-
0
1,626,749
1,104,233
-
-

Finance lease payments represent rentals payable by the group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 2 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

21
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
9,704,044
776,714
9,702,108
-
0
Loans from directors
1,063,693
97,693
919,693
19,693
Deferred consideration
669,766
-
0
669,766
-
0
Other borrowings
150,000
-
0
-
-
0
11,587,503
874,407
11,291,567
19,693
Payable within one year
1,279,471
169,543
1,133,535
19,693
Payable after one year
10,308,032
704,864
10,158,032
-
0
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
21
Loans and overdrafts
(Continued)
- 29 -

On 17th June 2022, the entire share capital of MM Property Assets Limited was acquired by the group in exchange for £900,000 of loan notes. At the balance sheet date, the carrying value of these loan notes is £900,000 (2022: £nil) and they are included within loans from directors above. The loan notes are unsecured and interest is payable on the loan notes at a fixed rate of 7% per annum.

 

Included within other borrowings is a balance of £150,000 (2022: £150,000) owed to the vendor. Interest is due on the loan at a rate of 6% per annum.

 

Deferred consideration relates to loan notes payable in annual installments until July 2027. Deferred consideration has been measured at present value using a discount rate of 6% per annum. A fixed charge over properties owned by MM Property Assets Limited are held by the noteholder. The deferred consideration payments are guaranteed by MM Property Assets Limited, a subsidiary of the group.

 

The following amounts are included within Bank loans:

 

Bank loans of £1,936 (2022: £42,094) have been provided to the subsidiary, Westcombe Waste Limited, under the Coronavirus Business Interruption Loan Scheme. The loan is repayable in instalments over 4 years.

 

At the balance sheet date, the company owed £6,601,848 (2022:£nil) to Shawbrook Bank Limited for the provision of a loan facility. Interest is due on the loan at a rate of 6.5% per annum and monthly repayments of £19,209.04 are due, starting from February 2023.A fixed and floating charge against all property and assets of the group are held by Shawbrook Bank Limited for the provision of the facility.

 

At the balance sheet date, the company owed £3,100,260 (2022: £nil) to Shawbrook Bank Limited for the provision of a cashflow loan facility. Interest is due on the loan at a rate of 7.25% per annum and monthly repayments of £61,111.11 are due starting from February 2023. A fixed and floating charge against all property and assets of the group are held by Shawbrook Bank Limited for the provision of the facility.

 

 

22
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Restoration provision
153,750
105,387
-
-
Aftercare provision
298,552
346,915
-
-
452,302
452,302
-
-
Movements on provisions:
Restoration provision
Aftercare provision
Total
Group
£
£
£
At 1 April 2022 and 31 March 2023
153,750
298,552
452,302
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
22
Provisions for liabilities
(Continued)
- 30 -

A provision has been included for the anticipated costs of restoring the Whiscombe Hill Landfill site. A number of uncertain factors can impact the actual costs incurred, such factors include the impact of changes in environmental regulation and climate change. The provision compromises managements best estimate of the financial effects of these uncertain factors, but future changes in any of the estimates could materially impact the aftercare and site restoration provision.

23
Deferred taxation

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

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Accelerated capital allowances
37,408
360,227
-
-
Tax losses
-
-
81,436
-
Revaluations
1,650,396
-
-
-
Other
-
(1,513)
-
-
1,687,804
358,714
81,436
-
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Company
£
£
£
£
Tax losses
-
-
42,127
-
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 April 2022
358,714
-
Credit to profit or loss
(204,102)
(42,127)
Effect of change in tax rate - profit or loss
42,127
-
Transfer on disposal
1,409,629
-
Liability/(Asset) at 31 March 2023
1,606,368
(42,127)
24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
139,313
99,591
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
24
Retirement benefit schemes
(Continued)
- 31 -

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

25
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,800
1,800
1,800
1,800
Ordinary B shares of £1 each
200
200
200
200
2,000
2,000
2,000
2,000

Ordinary shares and B Ordinary shares rank pari passu in all respects save that the directors may recommend and pay a dividend on one class of shares and not the other, and vice versa.

26
Acquisition of a business

On 29 July 2022 the group acquired 100% of the issued capital of McCarthy Marland H1 Limited and McCarthy Marland H2 Limited.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
5,587,517
2,673,656
8,261,173
Trade and other receivables
1,093,892
-
1,093,892
Cash and cash equivalents
2,527,884
-
2,527,884
Borrowings
(1,417,289)
-
(1,417,289)
Obligations under finance leases
(805,416)
-
(805,416)
Trade and other payables
(1,073,073)
-
(1,073,073)
Tax liabilities
(121,288)
-
(121,288)
Deferred tax
(473,540)
(668,414)
(1,141,954)
Total identifiable net assets
5,318,687
2,005,242
7,323,929
Goodwill
3,927,684
Total consideration
11,251,613
The consideration was satisfied by:
£
Cash
10,025,000
Deferred consideration
669,765
Directly attributable costs of the business combination
556,848
11,251,613
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
26
Acquisition of a business
(Continued)
- 32 -
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
7,479,688
Profit after tax
136,627

On 17 June 2022 the group acquired 100% of the issued capital of MM Property Assets Limited.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
112,654
-
112,654
Investment property
2,362,080
-
2,362,080
Trade and other receivables
175,250
-
175,250
Cash and cash equivalents
79,584
-
79,584
Borrowings
(1,286,729)
-
(1,286,729)
Obligations under finance leases
(174,002)
-
(174,002)
Trade and other payables
(50,628)
-
(50,628)
Tax liabilities
(20,174)
-
(20,174)
Deferred tax
(267,675)
-
(267,675)
Total identifiable net assets
930,360
-
930,360
Goodwill
(25,860)
Total consideration
904,500
The consideration was satisfied by:
£
Cash
4,500
Issue of debentures
900,000
904,500
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
479,187
Profit after tax
349,284
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 33 -
27
Operating lease commitments
Lessee

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
467,579
-
94,383
-
Between two and five years
1,193,883
-
330,342
-
1,661,462
-
424,725
-
28
Related party transactions

The group has taken advantage of the exemption available in FRS 102 section 33 "Related party disclosures" whereby it has not disclosed transactions with any wholly owned subsidiary undertakings of the group.

 

Group

 

At the balance sheet date, the group owed £81,065 (2022: £53,065) to A P D Marland, a director of the company. The amount owed is included within other creditors. The loan is interest free and repayable on demand.

 

At the balance sheet date, the group owed £82,628 (2022: £16,628) to K D McCarthy, a director of the company. The amount owed is included within other creditors. The loan is interest free and repayable on demand.

 

At the balance sheet date, £12,326 (2022: £12,326) was owed by McCarthy Property Services Limited, a related party by virtue of common control. This balance is included within other debtors.

 

Company

 

At the balance sheet date, the company owed £3,065 (2022: £3,065) to A P D Marland, a director of the company. The amount owed is included within other creditors. The loan is interest free and repayable on demand.

 

At the balance sheet date, the company owed £16,628 (2022: £16,628) to K D McCarthy, a director of the company. The amount owed is included within other creditors. The loan is interest free and repayable on demand.

 

At the balance sheet date, the company and group owed an additional £900,000 (2022: £nil) to the directors of the company in relation to loans notes exchanged for 100% of the share capital in MM Property Assets Limited. The loan notes are unsecured and interest is payable on the loan notes at a fixed rate of 7% per annum.

 

MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 34 -
29
Controlling party

No individual or entity had outright control over the group at any time during the period ended 31st March 2023.

 

McCarthy Marland Limited is the smallest and largest group for which consolidated financial statements are prepared and are available to the public.

30
Cash generated from group operations
2023
2022
£
£
(Loss)/profit for the year after tax
(1,061,406)
703,207
Adjustments for:
Taxation (credited)/charged
(82,584)
171,588
Finance costs
809,312
89,089
Investment income
(169)
(4)
Loss/(gain) on disposal of tangible fixed assets
11,765
(72,700)
Fair value loss on investment properties
446,690
-
0
Amortisation and impairment of intangible assets
289,888
12,993
Depreciation and impairment of tangible fixed assets
1,000,967
624,811
Movements in working capital:
Decrease/(increase) in stocks
4,662
(7,453)
Decrease/(increase) in debtors
820,295
(565,230)
Increase in creditors
1,236,759
473,716
Cash generated from operations
3,476,179
1,430,017
31
Analysis of changes in net debt - group
1 April 2022
Cash flows
Acquisitions and disposals
New finance leases
31 March 2023
£
£
£
£
£
Cash at bank and in hand
312,527
30,169
-
-
342,696
Borrowings excluding overdrafts
(776,714)
(6,373,312)
(3,604,018)
-
(10,754,044)
Obligations under finance leases
(1,104,233)
633,482
(979,418)
(176,580)
(1,626,749)
Deferred consderation
-
-
(669,766)
-
(669,766)
(1,568,420)
(5,709,661)
(5,253,202)
(176,580)
(12,707,863)
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 35 -
32
Prior period adjustment
Changes to the balance sheet - group
As previously reported
Adjustment
As restated at 31 Mar 2022
£
£
£
Creditors due after one year
Finance leases
(768,645)
112,744
(655,901)
Capital and reserves
Profit and loss
1,235,668
112,744
1,348,412
Changes to the profit and loss account - group
As previously reported
Adjustment
As restated
Period ended 31 March 2022
£
£
£
Cost of sales
(5,148,150)
112,744
(5,035,406)
Profit for the financial period
590,463
112,744
703,207
Reconciliation of changes in equity - group
1 April
31 March
2021
2022
£
£
Adjustments to prior year
Total adjustments
-
112,744
Equity as previously reported
879,805
1,237,668
Equity as adjusted
879,805
1,350,412
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Total adjustments
112,744
Profit as previously reported
590,463
Profit as adjusted
703,207
Changes to the balance sheet - company
As previously reported
Adjustment
As restated at 31 Mar 2022
£
£
£
Net assets
1,119,050
-
1,119,050
Capital and reserves
Total equity
1,119,050
-
1,119,050
MCCARTHY MARLAND LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
32
Prior period adjustment
(Continued)
- 36 -
Changes to the profit and loss account - company
As previously reported
Adjustment
As restated
Period ended 31 March 2022
£
£
£
Profit after taxation
220,562
-
220,562
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