Company registration number 02678812 (England and Wales)
SHOTLEY HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SHOTLEY HOLDINGS LIMITED
COMPANY INFORMATION
Directors
A W M Fane OBE
T S Richmond
Secretary
T S Richmond
Company number
02678812
Registered office
Collins Station Road
Bentley
Ipswich
IP9 2DB
Auditor
Ensors Accountants LLP
Connexions
159 Princes Street
Ipswich
IP1 1QJ
Solicitors
Birketts LLP
Providence House
141-145 Princes Street
Ipswich
IP1 1QJ
SHOTLEY HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
SHOTLEY HOLDINGS 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
The company continues to show strong performance despite a period of much higher inflation than recent years and a number of consequential cost increases many of which had to be absorbed.
Turnover at £11.23m was up 2.5%. Despite cost increases referred to gross profit % remained virtually constant at 29.4%, however our operating profit dipped to £957k by 22%. The all important EBITDA figure remained constant at £2.3m.
The net assets of the company have further increased to £10.6m at 31 December 2023 demonstrating the importance of strong management to protect the net assets of the company.
The market continues to consolidate with waste operators with an emphasis on larger, high investment operations matching recycling and regulatory requirements reflecting the high cost of recycling.
Principal risks and uncertainties
The principal business risks and uncertainties affecting the company are considered to relate to the regulatory environment in which the company operates, and the necessity for the company to maintain investment in its operational assets and capabilities.
Like the rest of its industry sector, the company continued to make changes to its business operations as required in order to respond to the challenging circumstances. These were successful as the results show.
The directors closely monitor the company's operations to ensure that it complies with all legal, regulatory and environmental requirements. The ongoing profitability of the company enables it to continue to invest in the required operational assets.
It is the view of the company's management that the performance and financial position of the company justifies the continuation of the going concern basis of accounting in the preparation of these financial statements.
Key performance indicators
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SHOTLEY HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
T S Richmond
Director
22 October 2024
SHOTLEY HOLDINGS 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.
Principal activities
The principal activity of the company continued to be that of the provision of sustainable waste management services.
Results and dividends
The results for the year are set out on page 9.
Interim dividends of £2,777.78 per share was paid in September 2023.
The total distributions of dividends for the year ended 31 December 2024 will be £500,000.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
A W M Fane OBE
T S Richmond
Financial instruments
The company utilises within its operations financial instruments such as cash, trade debtors, trade creditors and leasing and hire purchase arrangements. Working capital is generally financed through retained earnings.
Liquidity risk
Liquidity risk is managed by the close monitoring of trade payables, trade receivables and bank balances.
Interest rate risk
The financing of the company's operations is generally met through retained profits and therefore the company has limited exposure to interest rate fluctuations.
Credit risk
The company's main credit risk is that associated with trade debtors. This risk is managed by the close monitoring of credit accounts and by a proper assessment of a potential customers credit status prior to credit facilities being approved
Future developments
2024 is a year of consolidation and the company continues to invest in its operational assets to improve the methods of recycling for cost efficiency and environmental standards. The pressures on all costs are challenging management to monitor and review financial controls to ensure ongoing profitability and growth in net assets.
We are researching into other solutions of waste recycling and disposal to not only control our costs but also to ensure the maximum volume of waste can be recycled, minimising carbon footprint.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
SHOTLEY HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
T S Richmond
Director
22 October 2024
SHOTLEY HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
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.
SHOTLEY HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHOTLEY HOLDINGS LIMITED
- 6 -
Opinion
We have audited the financial statements of Shotley Holdings Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
SHOTLEY HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHOTLEY HOLDINGS LIMITED (CONTINUED)
- 7 -
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained in more depth 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The auditor’s assessment of the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur.
Which laws and regulations the auditor identified as being of significance in the context of the entity.
The auditor’s explanation of its audit response will depend on the risks identified but may include:
- Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations. Specifically, environmental and waste disposal regulations, vehicle operators and waste carriers licences and health & safety regulations
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
SHOTLEY HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHOTLEY HOLDINGS LIMITED (CONTINUED)
- 8 -
Barry Gostling
Senior Statutory Auditor
For and on behalf of Ensors Accountants LLP
22 October 2024
Chartered Accountants
Statutory Auditor
Connexions
159 Princes Street
Ipswich
IP1 1QJ
SHOTLEY HOLDINGS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
11,227,622
10,967,147
Cost of sales
(7,930,783)
(7,740,557)
Gross profit
3,296,839
3,226,590
Administrative expenses
(2,341,845)
(1,998,854)
Other operating income
1,575
Operating profit
4
956,569
1,227,736
Interest receivable and similar income
7
329,463
54,066
Profit before taxation
1,286,032
1,281,802
Tax on profit
8
(229,828)
(280,055)
Profit for the financial year
1,056,204
1,001,747
The income statement has been prepared on the basis that all operations are continuing operations.
SHOTLEY HOLDINGS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
6,216,842
5,853,527
Investments
11
5,080
5,080
6,221,922
5,858,607
Current assets
Debtors
13
2,415,762
1,360,524
Cash at bank and in hand
6,465,381
7,354,427
8,881,143
8,714,951
Creditors: amounts falling due within one year
14
(1,332,872)
(1,780,600)
Net current assets
7,548,271
6,934,351
Total assets less current liabilities
13,770,193
12,792,958
Provisions for liabilities
Provisions
15
2,269,685
1,905,435
Deferred tax liability
16
862,518
805,737
(3,132,203)
(2,711,172)
Net assets
10,637,990
10,081,786
Capital and reserves
Called up share capital
18
180
180
Profit and loss reserves
10,637,810
10,081,606
Total equity
10,637,990
10,081,786
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 22 October 2024 and are signed on its behalf by:
T S Richmond
Director
Company registration number 02678812 (England and Wales)
SHOTLEY HOLDINGS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
180
9,279,859
9,280,039
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,001,747
1,001,747
Dividends
9
-
(200,000)
(200,000)
Balance at 31 December 2022
180
10,081,606
10,081,786
Year ended 31 December 2023:
Profit and total comprehensive income
-
1,056,204
1,056,204
Dividends
9
-
(500,000)
(500,000)
Balance at 31 December 2023
180
10,637,810
10,637,990
SHOTLEY HOLDINGS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
1,861,695
2,258,742
Income taxes paid
(310,000)
(139,257)
Net cash inflow from operating activities
1,551,695
2,119,485
Investing activities
Purchase of tangible fixed assets
(1,419,579)
(641,462)
Proceeds from disposal of tangible fixed assets
149,375
30,215
Issue of loans
(1,000,000)
Interest received
329,463
54,066
Net cash used in investing activities
(1,940,741)
(557,181)
Financing activities
Dividends paid
(500,000)
(200,000)
Net cash used in financing activities
(500,000)
(200,000)
Net (decrease)/increase in cash and cash equivalents
(889,046)
1,362,304
Cash and cash equivalents at beginning of year
7,354,427
5,992,123
Cash and cash equivalents at end of year
6,465,381
7,354,427
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
Shotley Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Collins Station Road, Bentley, Ipswich, IP9 2DB.
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 exempt under Section 402/405(2) of the Companies Act 2006 from the requirement to prepare consolidated financial statements and hence the financial statements contain information about Shotley Holdings Limited as an individual company and do not contain consolidated financial information as the parent of a group.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents income receivable, excluding value added tax, in the ordinary course of business for goods and services provided. Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. This is usually at the point when the goods or skips have been delivered to the customer, or in the case of landfill services, when these services have been provided.
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:
Freehold land
Not depreciated
Freehold property
4% straight line
Landfill aftercare & cell costs
over life of site, based on void space used
Improvements to leasehold property
10% - 20% straight line, 10% reducing balance
Plant and equipment
10% - 25% straight line, 25% reducing balance
Computer equipment
33% straight line
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 credited or charged to profit or loss.
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.5
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade 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.
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.11
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
Cell development costs
The company's landfill site consists of separate cells which are created and filled in turn. The costs incurred to create a cell are capitalised and charged to the Statement of Comprehensive Income over the estimated life of the individual cell, based on void space used.
Landfill reinstatement, environmental control and aftercare costs
The expected costs of the reinstatement, environmental control and aftercare of the landfill site are recognised as provisions when the obligations arise. Tangible fixed assets are created for an amount equal to the provisions and these are then depreciated as described in the accounting policy headed Tangible fixed assets. Relevant costs are charged against the provisions as incurred. Subsequent index linked increases to the provisions are charged directly to the Statement of Comprehensive Income.
Waste and landfill processing costs
Waste and landfill processing costs are recognised in the income statement in the same period as the associated revenue. Estimated processing costs relating to waste and landfill held at the Statement of Financial Position date are included in provisions.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or 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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Estimated the quantities of unprocessed waste held at the landfill site at the statement of financial position date in order to calculate a reasonable provision for collection and processing costs.
Established provisions for cell reinstatement and landfill site monitoring and aftercare costs. Such provisions are determined using figures provided by the Environment Agency as the basis for the calculations.
The costs of developing a cell at the landfill site are written off over the estimated life of the cell. The estimated life of a particular cell is determined by taking into account factors such as the size of the cell, the nature of the waste to be deposited therein and other operational factors.
Determine whether there are any indicators of impairment in respect of the company's tangible fixed assets. Regarding the landfill site in particular such an assessment takes into account both current and future planning permissions.
Tangible fixed assets are depreciated over their estimated useful lives. An assessment is made on an annual basis to ensure that the useful life determined for each asset is still appropriate.
3
Turnover and other revenue
The turnover and profit before taxation are attributable to the principal activities of the company.
2023
2022
£
£
Other revenue
Interest income
329,463
54,066
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
28,850
19,800
Depreciation of owned tangible fixed assets
986,195
1,013,424
Profit on disposal of tangible fixed assets
(79,306)
(26,838)
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Skip hire & waste management staff
45
42
Office staff
9
9
Directors
2
2
Total
56
53
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,299,735
2,117,407
Social security costs
246,582
243,183
Pension costs
39,057
44,294
2,585,374
2,404,884
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
524,433
525,704
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
476,433
473,900
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
301,949
54,066
Other interest income
27,514
Total income
329,463
54,066
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Interest receivable and similar income
(Continued)
- 20 -
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
301,949
54,066
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
173,047
280,055
Deferred tax
Origination and reversal of timing differences
56,781
Total tax charge
229,828
280,055
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,286,032
1,281,802
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
302,475
243,542
Tax effect of expenses that are not deductible in determining taxable profit
1,245
2,111
Change in unrecognised deferred tax assets
(75,878)
74,950
Deferred tax adjustments in respect of prior years
7,983
(17,987)
Fixed asset difference
(5,997)
(22,561)
Taxation charge for the year
229,828
280,055
9
Dividends
2023
2022
£
£
Interim paid
500,000
200,000
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Tangible fixed assets
Freehold land & property
Landfill site inc. aftercare & cell costs
Improvements to leasehold property
Plant & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 January 2023
1,485,801
2,768,781
261,783
5,090,839
94,037
3,208,337
12,909,578
Additions
8,548
104,610
36,334
739,838
3,575
526,674
1,419,579
Disposals
(611,509)
(439,073)
(1,050,582)
At 31 December 2023
1,494,349
2,873,391
298,117
5,219,168
97,612
3,295,938
13,278,575
Depreciation and impairment
At 1 January 2023
131,041
653,811
141,833
3,752,069
80,152
2,297,145
7,056,051
Depreciation charged in the year
32,980
160,750
4,833
483,301
7,383
296,948
986,195
Eliminated in respect of disposals
(575,545)
(404,968)
(980,513)
At 31 December 2023
164,021
814,561
146,666
3,659,825
87,535
2,189,125
7,061,733
Carrying amount
At 31 December 2023
1,330,328
2,058,830
151,451
1,559,343
10,077
1,106,813
6,216,842
At 31 December 2022
1,354,760
2,114,970
119,950
1,338,770
13,885
911,192
5,853,527
Included in cost of freehold land and property, and landfill including aftercare & cell costs is freehold land of £131,262 and £250,000 respectively (2022: £131,262 and £250,000) which is not depreciated.
Furthermore, included within additions of landfill including aftercare & cell costs are assets to the value of £104,610
which were under the course of construction in the year and therefore not depreciated in this period.
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
11
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
12
5,080
5,080
12
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Tip-Top Waste Limited
Collins Skip Hire, Station Road, Bentley, Ipswich, IP9 2DB
Ordinary
100.00
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,179,462
1,192,783
Other debtors
1,014,151
3,619
Prepayments and accrued income
222,149
164,122
2,415,762
1,360,524
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
323,706
451,823
Amounts owed to group undertakings
100
100
Corporation tax
143,240
280,193
Other taxation and social security
350,996
398,634
Other creditors
4,784
173,004
Accruals and deferred income
510,046
476,846
1,332,872
1,780,600
15
Provisions for liabilities
2023
2022
£
£
Other provisions
2,269,685
1,905,435
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Provisions for liabilities
(Continued)
- 23 -
Movements on provisions:
Other provisions
£
At 1 January 2023
1,905,435
Additional provisions in the year
364,250
At 31 December 2023
2,269,685
The above provision is made up of £481,883 (2022: £457,984) in respect of Cell reinstatement & landfill site monitoring & aftercare costs. The remaining provision is for waste processing costs being £1,787,802 (2022: £1,447,541).
16
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
476,314
418,274
Other timing differences
(30,339)
(29,079)
Landfill site
416,543
416,542
862,518
805,737
2023
Movements in the year:
£
Liability at 1 January 2023
805,737
Charge to profit or loss
56,781
Liability at 31 December 2023
862,518
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
39,057
44,294
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.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
180
180
180
180
19
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
1,223,754
339,861
20
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Key management personnel
2023
2022
£
£
Rent paid in respect of premises utilised
40,000
40,000
Amount due to related parties
(250)
171,794
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Key management personnel
1,000,000
-
Amounts repayable to Shotley Holdings Limited carried interest of 4.75%. Post year end the full balance has been cleared.
SHOTLEY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
21
Directors' transactions
Dividends totalling £500,000 (2022 - £200,000) were paid in the year in respect of shares held by the company's directors.
22
Financial committments and Guarantees
A provision for reinstatement of the landfill site, including related environmental and aftercare costs, has been made in the financial statements (see note 15). The provision is based on calculations of future estimates liabilities prepared by independent consultants in accordance with Environment Agency regulations.
The company is also required as a condition of its landfill permit to ensure that the Environment Agency has under its supervision adequate financial provision to fund the environmental and aftercare costs referred to above. At the statement of financial position date cash at bank included £427,282 deposited with the Environmental Agency under a deed of trust.
23
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,056,204
1,001,747
Adjustments for:
Taxation charged
229,828
280,055
Investment income
(329,463)
(54,066)
Gain on disposal of tangible fixed assets
(79,306)
(26,838)
Depreciation and impairment of tangible fixed assets
986,195
1,013,424
Increase in provisions
364,250
437,107
Movements in working capital:
Increase in debtors
(55,238)
(32,712)
Decrease in creditors
(310,775)
(359,975)
Cash generated from operations
1,861,695
2,258,742
24
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
7,354,427
(889,046)
6,465,381
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