Company registration number 06047986 (England and Wales)
EARTHWARE LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
EARTHWARE LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 9
EARTHWARE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
3
1,777
12,298
Current assets
Debtors
4
1,239,132
1,883,161
Cash at bank and in hand
629,921
341,885
1,869,053
2,225,046
Creditors: amounts falling due within one year
5
(912,719)
(662,360)
Net current assets
956,334
1,562,686
Total assets less current liabilities
958,111
1,574,984
Provisions for liabilities
(185)
(1,272)
Net assets
957,926
1,573,712
Capital and reserves
Called up share capital
7
140
140
Share premium account
162,584
162,584
Capital redemption reserve
19
19
Profit and loss reserves
795,183
1,410,969
Total equity
957,926
1,573,712
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 27 June 2024 and are signed on its behalf by:
G E Peterson
Director
Company Registration No. 06047986
EARTHWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information
Earthware Limited is a private company limited by shares incorporated in England and Wales. The registered office is Mere House, Brook Street, Knutsford, Cheshire, WA16 8GP.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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.
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.
In forming this assessment, the directors have reasonable expectation of continued support through the injection of funds to the wider group, if required, from external investors and are confident the underlying business has the ability to generate sufficient positive cash flows which will support the payment of liabilities and meet all other financial obligations as they fall due. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The directors note that the business is trading profitably in terms of Earnings Before Interest, Tax, Depreciation and Amortisation and is forecast to continue to be cash generative for a period of at least 12 months from the date of signing these accounts.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and trade discounts.
Profit on long-term contracts is recognised as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Office Equipment
33% staight line
Fixtures and fittings
20% straight line
EARTHWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
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
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.6
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price. Financial assets classified as receivable within one year are not amortised.
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 creditors 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
EARTHWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.9
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.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
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.
EARTHWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
25
36
In the prior year all employee costs have been included within administrative expenses. In the current year, wages costs have been apportioned to both cost of sales and administrative costs. In the current year £1,459,186 amount of employee costs have been included within cost of sales (2022: £Nil)
3
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023
44,182
Disposals
(24,716)
At 31 December 2023
19,466
Depreciation and impairment
At 1 January 2023
31,884
Depreciation charged in the year
10,521
Eliminated in respect of disposals
(24,716)
At 31 December 2023
17,689
Carrying amount
At 31 December 2023
1,777
At 31 December 2022
12,298
4
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
242,241
743,578
Amounts owed by group undertakings
665,686
959,234
Other debtors
45,342
Prepayments and accrued income
285,863
180,349
1,239,132
1,883,161
EARTHWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Debtors
(Continued)
- 6 -
Amounts owed by group undertakings are interest free and repayable on demand.
Included in prepayments and accrued income is an amount relating to accrued income of £243,021 (2022: £132,235).
EARTHWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
5
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
9,824
22,900
Amounts owed to group undertakings
597,127
36,103
Corporation tax
14,083
65,807
Other taxation and social security
55,865
135,259
Other creditors
12,251
13,974
Accruals and deferred income
223,569
388,317
912,719
662,360
Amounts owed to group undertakings are interest free and repayable on demand.
Included in accruals and deferred income is an amount relating to deferred income of £206,849 (2022: £157,187).
6
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
185
2,816
Short term timing differences
-
(1,544)
185
1,272
2023
Movements in the year:
£
Liability at 1 January 2023
1,272
Credit to profit or loss
(1,087)
Liability at 31 December 2023
185
EARTHWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
7
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Founder shares of 1p each
11,274
11,274
112
112
C Ordinary shares of 1p each
155
155
2
2
D Ordinary shares of 1p each
2,546
2,546
26
26
13,975
13,975
140
140
8
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Andrew Reddington
Statutory Auditor:
Azets Audit Services
9
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
Within one year
25,920
25,920
Between two and five years
51,841
77,761
77,761
103,681
10
Financial commitments, guarantees and contingent liabilities
The company's present and future assets are subject to a fixed and floating charge in favour of GLAS Trust Corporation Limited in respect of certain borrowings of a fellow group company, Moonbeam Bidco Ltd. At 31 December 2023, the net borrowings encompassed by the charges amounted to £55,855,835 (2022: £57,374,531)
11
Related party transactions
The company has taken advantage of the available exemption conferred by Section 1AC.35 of FRS 102 not to disclose transactions with wholly owned members of the group.
EARTHWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
12
Parent company
The company's immediate parent undertaking is Prime Global Medical Communications Ltd, a company incorporated in England and Wales and registered at Mere House, Brook Street, Knutsford, Cheshire, WA16 8GP. The results of this company are included in the consolidated accounts of Prime Global Medical Communications Ltd.