Company registration number 08688920 (England and Wales)
EARTHMET LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
EARTHMET LIMITED
COMPANY INFORMATION
DIRECTORS
Mr P Michel
Mr M D Brown
(Appointed 2 May 2023)
COMPANY NUMBER
08688920
REGISTERED OFFICE
19 Highfield Road
Edgbaston
Birmingham
B15 3BH
AUDITOR
JW Hinks LLP
Chartered Accountants
19 Highfield Road
Edgbaston
Birmingham
B15 3BH
EARTHMET LIMITED
CONTENTS
PAGE
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Income statement
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 31
EARTHMET LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

REVIEW OF THE BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

 

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

 

Turnover and gross margin of the company were as follows:

 

                 2023         2022

                 £         £

            

Turnover         12,298,901      16,666,733

            

Gross profit            2,191,189     2,843,749

                 (17.8%)     (17.1%)

 

Trading performance 2023

The financial performance during the year faced challenges from factors like high inflation, increased interest rates, fluctuating Copper LME (<16%), and heightened competition. The ongoing war in Ukraine impacted shipping channels and raised costs. A competitive employment marketplace led to retention issues and difficulty in securing new talent. A fraud incident resulted in a £242,986 loss, but measures have been implemented to prevent future occurrences. Despite unmet financial targets, the year allowed for a company restructure, introducing improved processes for future growth, and still achieving a positive profit is considered reassuring.

Business Environment 2023

Earthmet's recent relocation to new premises in January 2023 marked a significant milestone for the business. The appointment of the Managing Director has led to notable improvements in the business structure, processes, and procedures, establishing a robust foundation for future strategies.

The company aims to capitalise on opportunities for organic growth in existing and new market sectors, particularly within ongoing electrical infrastructure investment and upgrade programs. However, Earthmet acknowledges the uncertainties in the general construction market, influenced by high interest rates and financial market speculation, evident in developments like the cancellation of HS2 phase two and reduced housebuilder forecasts for the upcoming year.

Future Outlook

Despite these challenges, Earthmet enters the year with a solid position, a well-defined growth strategy, and a structured framework. Ongoing investments in personnel development and enhanced business systems are planned to further optimize operational efficiencies.

Community

The company actively participated in fund-raising events for 'Breast Cancer Awareness' and 'Macmillan', along with charitable donations to 'The Trussell Trust'. Additionally, sponsorship initiatives were undertaken for a local 'grassroots' youth football team. Beyond this, voucher and raffle donations were extended to valued customers to support their own employee, company, and community charitable initiatives. This dedication underscores Earthmet’s commitment to making a positive impact at both local and national levels.

Environment

Earthmet is committed to environmental responsibility and actively strives to minimize its ecological impact. Demonstrating forward-thinking practices, the company has taken initial steps toward achieving Carbon Neutrality and is proud to be working towards the PAS2060 standard, with the ultimate goal of reaching Carbon Net Zero status. As part of these efforts, Earthmet has successfully incorporated electric vehicles into its fleet during the year, aligning its operations with sustainable practices and contributing to a greener future.

Employees

Employees are fundamental to the future success of our business, and Earthmet is committed to providing fair employment terms, encompassing reasonable working hours and equitable pay. As we prioritize the well-being and engagement of our workforce, we are actively exploring additional employment initiatives. The overarching objective is to foster a strong employee social contract, aiming to retain our existing talent and attract new, skilled individuals to contribute to the continued growth and success of the company.

EARTHMET LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

On behalf of the board

Mr M D Brown
DIRECTOR
26 February 2024
EARTHMET LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

RESULTS AND DIVIDENDS

The results for the year are set out on page 6.

Ordinary dividends were paid amounting to £600,000. 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 P Michel
Mr M D Brown
(Appointed 2 May 2023)
SUPPLIER PAYMENT POLICY

The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).

 

The company's current policy concerning the payment of trade creditors is to:

 

Trade creditors of the company at the year end were equivalent to 28 day's purchases, based on the average daily amount invoiced by suppliers during the year.

AUDITOR

The auditors, J W Hinks LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

 

This report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies.

STATEMENT OF DISCLOSURE TO AUDITOR

Each director in office at the date of approval of this annual report confirms that:

 

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

On behalf of the board
Mr M D Brown
DIRECTOR
26 February 2024
EARTHMET LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 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 International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:

 

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.

EARTHMET LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EARTHMET LIMITED
- 5 -
OPINION

We have audited the financial statements of Earthmet Limited (the 'company') for the year ended 31 December 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 UK adopted international accounting standards.

In our opinion the financial statements:

BASIS FOR OPINION

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

CONCLUSIONS RELATING TO GOING CONCERN

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

 

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

 

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

OTHER INFORMATION

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

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

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:

EARTHMET LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EARTHMET LIMITED
- 6 -
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. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and discussed the policies and procedures regarding compliance.

Specific areas considered were as follows:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected all irregularities including those leading to material misstatements in the financial statements or non-compliance with regulation, even though we have properly planned and performed our audit in accordance with auditing standards.

This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

EARTHMET LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EARTHMET LIMITED
- 7 -

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.

NEAL ASTON FCA FCCA (SENIOR STATUTORY AUDITOR)
FOR AND ON BEHALF OF JW HINKS LLP
CHARTERED ACCOUNTANTS
STATUTORY AUDITOR
19 Highfield Road
Edgbaston
Birmingham
B15 3BH
26 February 2024
EARTHMET LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Revenue
4
12,298,901
16,666,733
Cost of sales
(10,107,712)
(13,822,984)
GROSS PROFIT
2,191,189
2,843,749
Administrative expenses
(1,529,344)
(883,275)
OPERATING PROFIT
5
661,845
1,960,474
Investment revenues
8
11,020
-
0
Finance costs
9
(79,424)
(51,878)
PROFIT BEFORE TAXATION
593,441
1,908,596
Income tax expense
10
(178,064)
(372,953)
PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR
415,377
1,535,643

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

EARTHMET LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
NON-CURRENT ASSETS
Property, plant and equipment
12
1,797,909
1,554,258
Investments
13
1
1
Deferred tax asset
23
276,741
-
0
2,074,651
1,554,259
CURRENT ASSETS
Inventories
15
1,914,150
1,699,893
Trade and other receivables
16
1,162,177
2,262,794
Current tax recoverable
16,974
-
0
Cash and cash equivalents
33,703
1,060,977
3,127,004
5,023,664
CURRENT LIABILITIES
Trade and other payables
21
1,315,261
2,803,635
Current tax liabilities
-
0
184,975
Borrowings
18
18,191
-
0
Lease liabilities
22
155,591
105,471
1,489,043
3,094,081
NET CURRENT ASSETS
1,637,961
1,929,583
NON-CURRENT LIABILITIES
Lease liabilities
22
1,272,130
1,224,982
Deferred tax liabilities
23
400,245
34,000
1,672,375
1,258,982
NET ASSETS
2,040,237
2,224,860
EQUITY
Called up share capital
25
100
100
Retained earnings
2,040,137
2,224,760
TOTAL EQUITY
2,040,237
2,224,860
The financial statements were approved by the board of directors and authorised for issue on 26 February 2024 and are signed on its behalf by:
Mr P Michel
Mr M D Brown
DIRECTOR
DIRECTOR
Company registration number 08688920 (England and Wales)
EARTHMET LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Retained earnings
Total
Notes
£
£
£
BALANCE AT 1 JANUARY 2022
100
1,939,117
1,939,217
YEAR ENDED 31 DECEMBER 2022:
Profit and total comprehensive income
-
1,535,643
1,535,643
Transactions with owners:
Dividends
11
-
(1,250,000)
(1,250,000)
BALANCE AT 31 DECEMBER 2022
100
2,224,760
2,224,860
YEAR ENDED 31 DECEMBER 2023:
Profit and total comprehensive income
-
415,377
415,377
Transactions with owners:
Dividends
11
-
(600,000)
(600,000)
BALANCE AT 31 DECEMBER 2023
100
2,040,137
2,040,237
EARTHMET LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations
30
297,597
1,695,300
Interest paid
(79,424)
(51,878)
Income taxes paid
(290,509)
(340,459)
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES
(72,336)
1,302,963
INVESTING ACTIVITIES
Purchase of property, plant and equipment
(481,417)
(262,375)
Interest received
11,020
-
0
NET CASH USED IN INVESTING ACTIVITIES
(470,397)
(262,375)
FINANCING ACTIVITIES
Payment of lease liabilities
97,268
7,077
Dividends paid
(600,000)
(1,000,000)
NET CASH USED IN FINANCING ACTIVITIES
(502,732)
(992,923)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
(1,045,465)
47,665
Cash and cash equivalents at beginning of year
1,060,977
1,013,312
Cash and cash equivalents at end of year
15,512
1,060,977
RELATING TO:
Bank balances and short term deposits
33,703
1,060,977
Bank overdrafts
(18,191)
-
0
EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
ACCOUNTING POLICIES
COMPANY INFORMATION

Earthmet Limited is a private company limited by shares incorporated in England and Wales. The registered office is 19 Highfield Road, Edgbaston, Birmingham, B15 3BH. The trading address of the company is 130 Roebuck Street, West Bromwich, West Midlands, B70 6RB.

1.1
ACCOUNTING CONVENTION

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

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 has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

1.2
GOING CONCERN

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany 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 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.

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.

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:

Leasehold land and buildings
Over period of lease
Leasehold improvement
Over period of lease
Plant and equipment
20% on cost
Computers
33% on cost
Motor vehicles
20% on cost
Fixtures and fittings
20% to 40% on cost

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

1.5
NON-CURRENT INVESTMENTS

Investments in subsidiaries are stated at cost at the balance sheet date.

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 13 -
1.6
IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS

At each reporting 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.

 

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.

1.7
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.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

1.8
CASH AND CASH EQUIVALENTS

Cash and cash equivalents 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.

1.9
FINANCIAL ASSETS

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 14 -
Financial assets at fair value through profit or loss

Financial assets are classified as at FVTPL when the financial asset is held for trading. This is the case if:

 

 

Financial assets at FVTPL are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Interest and dividends are included in 'Investment income' and gains and losses on remeasurement included in 'other gains and losses' in the statement of comprehensive income.

Financial assets held at amortised cost

Financial assets with fixed or determinable payments and fixed maturity dates that the Company has the positive intent and ability to hold to maturity are classified as held to maturity investments.

 

Held to maturity investments are measured at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective yield basis.

 

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Trade Receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Financial assets at fair value through other comprehensive income

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

Financial assets classified as available for sale are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income. Where an AFS financial asset is disposed of or determined to be impaired, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss.

 

Dividends and interest earned on AFS financial assets are included in the investment income line item in the statement of comprehensive income.

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 15 -
Impairment of financial assets

Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.

 

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

 

For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.10
FINANCIAL LIABILITIES

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as measured at fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:

 

 

Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss.

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

1.11
EQUITY INSTRUMENTS

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

1.12
DERIVATIVES

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are classified as current.

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 16 -
1.13
TAXATION

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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 is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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.

1.14
EMPLOYEE BENEFITS

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

1.15
RETIREMENT BENEFITS

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

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate.

1.16
LEASES

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 17 -

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

1.17
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.

 

 

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
2
ADOPTION OF NEW AND REVISED STANDARDS AND CHANGES IN ACCOUNTING POLICIES

New and revised IFRSs applied with no material effect on the financial statements

 

The accounting policies adopted are consistent with those of the previous period’s financial period, except for the following amendments to IFRS effective for annual period beginning on or before January 1, 2023 which did not have a material effect on the financial statements;

 

Pronouncements applicable to entities applying IFRSs at the IASB effective dates

 

 

Standards

 

- IFRS 17 - Insurance Contracts

 

 

Amendments

 

- Amendments to IFRS 17

 

- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2

 

- Definition of Accounting Estimates (Amendments to IAS 8)

 

- Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)

 

- Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Amendment to IFRS 17)

 

- International Tax Reform — Pillar Two Model Rules (Amendments to IAS 12) — Application of the exception and disclosure of that fact

 

- International Tax Reform — Pillar Two Model Rules (Amendments to the 'IFRS for SMEs' Standard) — Application of the exception and disclosure of that fact

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
ADOPTION OF NEW AND REVISED STANDARDS AND CHANGES IN ACCOUNTING POLICIES
(Continued)
- 19 -

New and revised standards

 

The standards and interpretations that are issued, up to the date of issuance of the Company’s financial statements are disclosed below. The management anticipates that these standards and amendments will have no material effect on the financial statements. The Company intends to adopt these standards, if applicable, as they become effective.

 

 

Effective for annual periods

New and revised IFRSs

beginning on or after

 

New or revised pronouncement

 

 

- IFRS 17 - Insurance Contracts

 

 

01 January 2023 (Mandatory)

 

- IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information

 

01 January 2024 (Not yet endorsed)

- IFRS S2 Climate-related Disclosures

 

 

Amendments

 

New or revised pronouncement

 

- Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

 

- Amendments to IFRS 17

 

- Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Amendment to IAS 1)

 

- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)

 

- Definition of Accounting Estimates (Amendments to IAS 8)

 

- Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12))

 

-Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Amendment to IFRS 17)

 

- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)

 

- Non-current Liabilities with Covenants (Amendments to IAS 1)

 

- International Tax Reform — Pillar Two Model Rules (Amendments to IAS 12)

 

- Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)

 

- Lack of Exchangeability (Amendments to IAS 21)

 

- International Tax Reform — Pillar Two Model Rules (Amendments to the 'IFRS for SMEs' Standard)

 

- Amendments to the SASB standards to enhance their international applicability

 

- Editorial Corrections (various)

01 January 2024 (Not yet endorsed)

 

 

 

 

 

 

01 January 2024 (Optional)

 

01 January 2023 (Mandatory)

 

Immediately available (Optional))

 

 

01 January 2023 (Partly endorsed)

 

 

01 January 2023 (Mandatory)

 

01 January 2023 (Mandatory)

 

 

01 January 2023 (Optional)

 

 

01 January 2024 (Optional)

 

01 January 2024 (Optional)

 

01 January 2023 (Mandatory)

 

01 January 2024 (Optional)

 

01 January 2025 (Optional)

 

01 January 2023 (Mandatory)

 

 

01 January 2025 (Optional)

 

Effective immediately applicable

Management anticipates that the adoption of the above standards in future years will have no material impact on the financial statements of the Company in the period of initial application.

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
3
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

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

CRITICAL JUDGEMENTS
VALUATION OF LEASE LIABILITIES AND RIGHT-OF-USE ASSETS

The application of IFRS 16 requires the company to make judgments that affect the valuation of the lease liabilities and the valuation of right-of-use assets. These include: determining contracts in scope of IFRS 16, determining the contract term and determining the interest rate used for discounting of future cash flows.

 

Accounting policy 1.16 sets out the company's policy for accounting for leases within the scope of IFRS 16.

4
REVENUE

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

2023
2022
£
£
REVENUE ANALYSED BY CLASS OF BUSINESS
Earthing and cable jointing supplies
12,298,901
16,666,733
5
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
7,800
7,500
Depreciation of property, plant and equipment
237,766
96,245
Cost of inventories recognised as an expense
9,923,976
13,669,889
6
EMPLOYEES

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

2023
2022
Number
Number
Sales and administration
14
13
EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
EMPLOYEES
(Continued)
- 21 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
607,788
521,084
Social security costs
54,370
74,724
Pension costs
8,988
8,890
671,146
604,698
7
DIRECTORS' REMUNERATION
2023
2022
£
£
Remuneration for qualifying services
101,120
-
0
8
INVESTMENT INCOME
2023
2022
£
£
INTEREST INCOME
Financial instruments measured at amortised cost:
Other interest income on financial assets
11,020
-
0
Income above relates to assets held at amortised cost, unless stated otherwise.
9
FINANCE COSTS
2023
2022
£
£
Interest on lease liabilities
79,424
34,378
Finance arrangements
-
0
17,500
Total interest expense
79,424
51,878
EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
10
INCOME TAX EXPENSE
2023
2022
£
£
CURRENT TAX
Current year taxation
103,026
357,975
Adjustments in respect of prior periods
(14,466)
(22)
88,560
357,953
DEFERRED TAX
Origination and reversal of temporary differences
89,504
15,000
Total tax charge
178,064
372,953

The charge for the year can be reconciled to the profit per the income statement as follows:

2023
2022
£
£
Profit before taxation
593,441
1,908,596
Expected tax charge/(credit) based on a corporation tax rate of 23.52%
139,577
362,633
Expenses not deductible in determining taxable profit
4,950
5,313
Permanent capital allowances in excess of depreciation
(40,348)
(11,195)
Under/(over) provided in prior years
(14,466)
(22)
Reversing timing differences
(1,153)
1,224
Deferred tax movement
89,504
15,000
Tax charge for the year
178,064
372,953
11
DIVIDENDS
2023
2022
2023
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£
£
ORDINARY A
Interim dividend paid
6,666.67
11,111.00
600,000
1,250,000
EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
12
PROPERTY, PLANT AND EQUIPMENT
Leasehold land and buildings
Leasehold improvement
Plant and equipment
Computers
Motor vehicles
Fixtures and fittings
Total
£
£
£
£
£
£
£
COST
At 1 January 2022
-
0
22,665
112,595
7,664
33,065
89,346
265,335
Additions
1,289,667
12,318
6,504
12,578
-
0
230,975
1,552,042
At 31 December 2022
1,289,667
34,983
119,099
20,242
33,065
320,321
1,817,377
Additions
-
0
-
0
246,197
-
0
30,513
204,707
481,417
At 31 December 2023
1,289,667
34,983
365,296
20,242
63,578
525,028
2,298,794
ACCUMULATED DEPRECIATION AND IMPAIRMENT
At 1 January 2022
-
0
22,665
56,050
7,606
14,328
66,225
166,874
Charge for the year
53,736
513
19,106
794
6,613
15,483
96,245
At 31 December 2022
53,736
23,178
75,156
8,400
20,941
81,708
263,119
Charge for the year
128,968
1,232
42,132
4,151
10,003
51,280
237,766
At 31 December 2023
182,704
24,410
117,288
12,551
30,944
132,988
500,885
CARRYING AMOUNT
At 31 December 2023
1,106,963
10,573
248,008
7,691
32,634
392,040
1,797,909
At 31 December 2022
1,235,931
11,805
43,943
11,842
12,124
238,613
1,554,258
At 31 December 2021
-
-
56,545
58
18,737
23,121
98,461

 

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
PROPERTY, PLANT AND EQUIPMENT
(Continued)
- 24 -

Property, plant and equipment includes assets held under finance leases or hire purchase contracts, as follows:

LEASED ASSETS
2023
2022
£
£
NET VALUES
Property
1,106,963
1,235,931
Plant and equipment
9,275
17,318
Motor vehicles
5,511
12,124
1,121,749
1,265,373
DEPRECIATION CHARGE FOR THE YEAR
Property
128,968
53,736
Plant and equipment
8,044
20,762
Motor vehicles
6,613
6,613
143,625
81,111
13
INVESTMENTS
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Investments in subsidiaries
-
0
-
0
1
1

The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

14
SUBSIDIARIES

These financial statements are separate company financial statements for Earthmet Limited. Earthmet Limited is a subsidiary of Gindre Duchavany S.A. and the results of Earthmet Limited are included in the consolidated financial statements of Umcor AG. The results of Earthmet Limited's subsidiary are also within these consolidated financial statements.

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

Name of undertaking
Country of incorporation
Ownership interest (%)
Voting power held (%)
Nature of business
Cable Jointing Solutions Limited
England
100
100
Dormant
15
INVENTORIES
2023
2022
£
£
Raw materials
1,914,150
1,699,893
EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
INVENTORIES
(Continued)
- 25 -

An amount of £1,687 (2022: £34,355) has been expensed during the year in relation to stock write-downs and stock losses.

16
TRADE AND OTHER RECEIVABLES
2023
2022
£
£
Trade receivables
1,077,696
2,144,366
Amounts owed by fellow group undertakings
2,911
-
0
Prepayments
81,570
118,428
1,162,177
2,262,794

Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

Trade debtors are stated net of a provision of £30,000 (2022: £12,000).

 

At 31 December 2023 trade debtors and amounts due from group undertakings included euro denominated balances of €15,170 (2022:43,496) and nil (2022:nil) respectively. All other receivables were sterling denominated.

 

Some of the unimpaired trade receivables are past due as at the reporting date.

 

17
TRADE RECEIVABLES - CREDIT RISK
FAIR VALUE OF TRADE RECEIVABLES

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

 

The company's principal financial assets are bank balances, cash, trade receivables and other expenses.

 

There is no concentration of credit risk.

EXPECTED CREDIT LOSS ASSESSMENT
2023
2022
Balance
Rate
Loss allowance
Balance
Rate
Loss allowance
TRADE RECEIVABLES
£
%
£
£
%
£
Not more than 3 months
1,039,949
-
-
2,085,603
-
-
More than 3 months, but not more than 6 months
37,747
-
30,000
58,763
-
12,000
1,077,696
30,000
2,144,366
12,000

No significant receivable balances are impaired at the reporting end date.

18
BORROWINGS
2023
2022
£
£
BORROWINGS HELD AT AMORTISED COST:
Bank overdrafts
18,191
-
EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
19
FAIR VALUE OF FINANCIAL LIABILITIES

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

20
FINANCIAL INSTRUMENTS

Financial Risk Management

Financial risks include market risk, credit risk, liquidity risk and interest risk. The Group seeks to minimise the effect of these risks by developing and applying policies and procedures which are regularly reviewed for appropriateness and effectiveness. The Group's principal financial instruments comprise cash held in current accounts, trade receivables, amounts recoverable under contracts, trade payables and other payables that arise directly from its operations.

            

Credit Risk

Credit risk refers to the risk that a customer or counterparty to a financial instrument fails to meet its contractual obligations, resulting in financial loss to the company, and arises principally from the company's receivables from customers. Customers that wish to trade on credit terms are subject to credit verification procedures and receivable balances are monitored on an ongoing basis.

 

The concentration of credit risk is subject to ongoing monitoring in conjunction with the Group, The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.

 

Liquidity Risk

The company needs to have access, at all times, to adequate financial resources not only to finance operations and the investments required to support its growth, but also to withstand the effects of any exceptional development. Liquidity is managed by the Group on behalf of subsidiaries and needs are met by long-term financing on the capital markets. Ensuring that all of the Group's net debt can be maintained over a long period, as well as through short-term commercial paper programs.

 

The company's intra-group debt, prior to any sales of receivables, is a key performance indicator and is subject to very close monitoring.

 

The company's financial obligations outside of the Group consist of trade creditors and other creditors - all of these are payable within 12 months.

 

Interest Risk

The Company is exposed to interest rate risk on its interest bearing liabilities. The sensitivity of the statement of comprehensive income is the effect of the assumed changes in interest rates on the Company's profit for one year, based on the floating rate financial assets and financial liabilities held at 31 December 2023.

 

Categories of financial instruments

                

                            

Financial assets    

Loans and receivables (including cash and cash equivalents) amounting to £1,194,663 (2022: £3,323,771).

            

Financial liabilities                                    

Trade payables only amounting to £721,217 (2022: £2,191,691).

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
21
TRADE AND OTHER PAYABLES
Current
2023
2022
£
£
Trade payables
721,217
2,191,691
Amount due to parent undertaking
301,877
-
0
Amounts due to fellow group undertakings
38,889
291,154
Accruals
79,248
171,030
Social security and other taxation
164,217
149,760
Other payables
9,813
-
0
1,315,261
2,803,635

At 31 December 2023 trade creditors and amounts due to group undertakings included euro denominated balances of €1,173 (2022: €29,053) and €nil (2022: €nil) respectively. All other payables were sterling denominated.

 

The directors consider the carrying value of trade and other receivables to be an approximation of their fair value.

 

During the year, the company signed an agreement with the parent undertaking for a cash loan facility. During the year, £300,000 was drawn down and interest of £1,877 has been accrued into these financial statements for the year.

22
LEASE LIABILITIES
2023
2022
MATURITY ANALYSIS
£
£
Within one year
155,591
105,471
In two to five years
696,724
506,440
In over five years
575,406
718,542
TOTAL UNDISCOUNTED LIABILITIES
1,427,721
1,330,453

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

2023
2022
£
£
Current liabilities
155,591
105,471
Non-current liabilities
1,272,130
1,224,982
1,427,721
1,330,453
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
79,424
34,378
EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
23
DEFERRED TAXATION
2023
2022
£
£
Deferred tax liabilities
400,245
34,000
Deferred tax assets
(276,741)
-
0
123,504
34,000
Deferred tax assets are expected to be recovered within one year

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

ACAs
IFRS16
Total
£
£
£
Liability at 1 January 2022
19,000
-
19,000
DEFERRED TAX MOVEMENTS IN PRIOR YEAR
Charge/(credit) to profit or loss
15,000
-
15,000
Liability at 1 January 2023
34,000
-
34,000
DEFERRED TAX MOVEMENTS IN CURRENT YEAR
Charge/(credit) to profit or loss
60,000
29,504
89,504
Liability at 31 December 2023
94,000
306,245
400,245
Asset at 31 December 2023
-
0
(276,741)
(276,741)

Deferred tax assets and liabilities are offset in the financial statements only where the company has a legally enforceable right to do so.

24
RETIREMENT BENEFIT SCHEMES
2023
2022
DEFINED CONTRIBUTION SCHEMES
£
£
Charge to profit or loss in respect of defined contribution schemes
8,988
8,890

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.

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
25
SHARE CAPITAL
2023
2022
£
£
ORDINARY SHARE CAPITAL
Issued and fully paid
90 Ordinary A of £1 each
90
90
5 Ordinary B of £1 each
5
5
5 Ordinary C of £1 each
5
5
100
100

The Ordinary A, B and C shares shall rank pari passu in all respects except for special rights on sale.

 

 

 

26
CAPITAL COMMITMENTS
2023
2022
£
£

At 31 December 2023 the company had capital commitments as follows:

Contracted for but not provided in the financial statements:
Acquisition of property, plant and equipment
-
0
37,650
27
CAPITAL RISK MANAGEMENT

The company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance,

 

The capital structure of the company consists of debt, cash and cash equivalents and equity comprising share capital, reserves and retained earnings. The company reviews the capital structure as necessary and as part of this review considers that cost of capital and the risks associated with each class of capital.

 

On 26 July 2022, a fixed and floating charge was created covering all the property or undertaking of the company. The charge contains a negative pledge.

The company is not subject to any externally imposed capital requirements.

28
RELATED PARTY TRANSACTIONS
OTHER TRANSACTIONS WITH RELATED PARTIES

During the year the company entered into the following transactions with companies, who are also members of the UMCOR Group of Companies:

Purchase of goods
2023
2022
£
£
Other related parties
7,715
18,820
EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
28
RELATED PARTY TRANSACTIONS
(Continued)
- 30 -
Management charges
2023
2022
£
£
Other related parties
46,743
34,482

The following amounts were outstanding at the reporting end date:

2023
2022
AMOUNTS DUE TO RELATED PARTIES
£
£
Parent company
318,803
262,471
Other related parties
21,963
33,911
340,766
296,382

The following amounts were outstanding at the reporting end date:

2023
2022
AMOUNTS DUE FROM RELATED PARTIES
£
£
Other related parties
2,911
5,228

No guarantees have been given or received.

 

EARTHMET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
29
CONTROLLING PARTY

The company is 100% owned by Gindre Duchavany SAS, a company incorporated in France.

 

In the director's opinion the company's ultimate parent company and controlling party is Umcor AG, a company incorporated in Switzerland.

 

The results of Earthmet Limited are included in the consolidated financial statements of Umcor AG whose registered address is Steinstrasse 21, CH-8003, Zurich, Switzerland.

 

 

 

 

30
CASH GENERATED FROM OPERATIONS
2023
2022
£
£
Profit for the year before income tax
593,441
1,908,596
ADJUSTMENTS FOR:
Finance costs
79,424
51,878
Investment income
(11,020)
-
0
Depreciation and impairment of property, plant and equipment
237,766
96,245
MOVEMENTS IN WORKING CAPITAL:
Increase in inventories
(214,257)
(634,911)
Decrease in trade and other receivables
1,100,617
105,831
(Decrease)/increase in trade and other payables
(1,488,374)
167,661
CASH GENERATED FROM OPERATIONS
297,597
1,695,300
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