The directors present the strategic report for the year ended 31 January 2024.
The group's principal activities remain the same: the manufacture, rental, service and repair of waste handling equipment.
Since the acquisition of Pakawaste by its current CEO, David Hamer, and Brask and Cece Holdings Limited during 2013, the group has gone from strength to strength. Pakawaste continues to be led by David Hamer as CEO and the same management team remain in place.
System Rental
System Rental continues to thrive and finishes the year on year with an increased revenue stream and an increase in contracts. Client base remains mainly the same, blue-chip companies. The company's main strategy for the group is to continue to expand and increase rental contracts. Moving forward we can see significant growth within rental follow on from winning a substantial contract during mid 2023.
Kelpack Hire
Kelpack has again proven to be a steady and robust rental business with the support of the Pakawaste Group. The Pakawaste sales team has managed to supply new rental streams and maintain ongoing contracts. Pakawaste Manufacturing has manufactured / refurbished equipment to go on 3 and 5 year rentals and Pakawaste Engineering Services continues to service / repair and install all Kelpack equipment. Moving forward again we can see substantial growth within the rental division with willing a large corporate contract during mid 2023.
Pakawaste Engineering Services
Pakawaste Engineering Services has continued to hit expected turnover through extremely difficult times, examples being availability of qualified engineers and talent within the industry.
The sales position we started is slowly making a revenue difference and envisage this expanding during 2024/25.
Pakawaste Engineering’s financial year had many challenges and barriers to entry, mainly due to the lack of availability of qualified labour within the industry.
To combat this we are actively recruiting back room and external engineers and implementing a new internal system to be managed by a freshly recruited position.
Pakawaste Ltd
Pakawaste Ltd (the manufacturing division) has a substantially improved trading year. Revenue substantially up / profit substantially up.
With the new joint ventures / diversifying product and tighter controls and winning several more contracts Manufacturing has seen a positive impact with will continue in 2024 / 2025 / 2026.
Back room changes in administration and a positive recruitment campaign eased staffing issues within fabrication. Pakawaste Ltd still have and promote an active apprenticeship programme and will continue to invest in its core team.
The group's operations expose it to a variety of financial risks that include debt management risk, credit risk, liquidity risk and interest rate risk. The group has in place risk management systems that seek to limit any adverse effects on the financial performance of the group by continuously monitoring these risk areas.
Given the size of the group, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set by the board of directors are implemented by the group's finance department.
The directors will revisit the appropriateness of this policy should the group's operations change in size or nature
Pakawaste Ltd have felt the external forces from the macroeconomic environment and found it very challenging. Lack of labour within the market has proven to be quite difficult in recruiting qualified fabricators and engineers.
Supply chains have put added pressure on manufacturing, with extended lead times and increased costs making it difficult to finish and invoice product at the correct gross margins. Transportation costs from Europe and a lack of drivers have forced inbound deliveries to increase in cost and become unreliable.
Moving forward Pakawaste have put in strong and robust measurements to eliminate / reduce any more “shocks” caused by the macroeconomic environment and will supply a reduced portfolio, concentrating on more profitable jobs and developing relationships with other industry specialists as part of its future route to market.
For the group's rental division, it is expected with the challenges in the current economy, that the rental businesses will develop and increase both in contacts and revenue. In return this will help the manufacturing division as opportunities for new work arise.
For the service division, lack of labour and supply chain will continue to throw up extra challenges. However, with our new rigorous in-house training this will be significantly reduced. If the current trading environment remains challenging, this will be beneficial to the service division as more clients look to keep older products which will result in more service and repair work.
In addition, all contractual loan repayments continue to be made and the Board consider there is adequate headroom on facilities, and that the group has the support of its shareholders if required.
Considering the measures implemented and following a review of the group's financial position, the directors are satisfied that the group and company will have adequate resources to continue to operate for the foreseeable future. As such the directors have concluded that it remains appropriate to prepare these financial statements on the going concern basis.
Turnover has increased by 36.7% for the year ended 31 January 2024 at £8.24m compared with £6.03m in the previous year. Gross profits have increased from £2.67m in the previous year to £3.04m for the year ended 31 January 2024.
The profit before tax of the group has increased from £0.26m in the previous year to £1.02m for the year ended 31 January 2024, however this includes £0.12m of exceptional charges in the prior year.
The directors consider the group performance to be positive, given the challenges faced.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 January 2024.
The results for the year are set out on page 10.
Minority shareholders of Pakawaste Holdings Limited and Kelpack Hire Limited received dividends amounting to £48,500. Brask and Cece Holdings Limited did not pay a dividend during the year and the directors do not recommend payment of a dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Pakawaste Limited continues to strive to make improvements in all of its products and the Group has an active design department employing a full time designer.
Pakawaste's aim is to continue to grow and maintain its presence as a leading manufacturer by building new products and introducing a new product line within the next financial year.
As a group we are actively developing an export strategy and continue to develop existing export partnerships and are looking to form new relationships to expand the overseas customer portfolio.
Pakawaste's strategy will always be to increase market share and grow our rental businesses by using and offering different solutions/packages to the Waste Management Market.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Brask and Cece Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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:
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.
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
Enquiries with management and those charged with governance about any known or suspected instances of non-compliance with laws and regulations and fraud;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to stock valuation and future performance; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness;and
Reviewing the systems for recording revenue and testing a sample of revenue items from source to the posting on the accounting system.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. 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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £312,930 (2023 - £371,250 profit).
Brask and Cece Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 2 Rough Hey Road, Grimsargh, Preston, PR2 5AR.
The group consists of Brask and Cece Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Brask and Cece Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 January 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of signing these financial statements the directors are continuing to respond to the business challenges currently being faced because of the current economic climate. The Board is meeting regularly, and the management team are reviewing operational, HR and financial impacts on a regular basis and are taking appropriate corrective actions to protect the business, whilst the finance team continue to monitor cash flow closely.
Pakawaste Ltd have felt the external forces from the macroeconomic environment and found it very challenging. Lack of labour within the market has proven to be quite difficult in recruiting qualified fabricators and engineers.
Supply chains have put added pressure on manufacturing, with extended lead times and increased costs making it difficult to finish and invoice product at the correct gross margins. Transportation costs from Europe and a lack of drivers have forced inbound deliveries to increase in cost and become unreliable.
Moving forward Pakawaste have put in strong and robust measurements to eliminate / reduce any more “shocks” caused by the macroeconomic environment and will supply a reduced portfolio, concentrating on more profitable jobs and developing relationships with other industry specialists as part of its future route to market.
For the group's rental division, it is expected with the challenges in the current economy, that the rental businesses will develop and increase both in contacts and revenue. In return this will help the manufacturing division as opportunities for new work arise.
For the service division, lack of labour and supply chain will continue to throw up extra challenges. However, with our new rigorous in-house training this will be significantly reduced. If the current trading environment remains challenging, this will be beneficial to the service division as more clients look to keep older products which will result in more service and repair work.
In addition, all contractual loan repayments continue to be made and the Board consider there is adequate headroom on facilities, and that the group has the support of its shareholders if required.
Considering the measures implemented and following a review of the group's financial position, the directors are satisfied that the group and company will have adequate resources to continue to operate for the foreseeable future. As such the directors have concluded that it remains appropriate to prepare these financial statements on the going concern basis.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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 group and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rental income is recognised on a straight line basis over the rental period.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Profit is recognised on long-term contracts, if the final outcome can be assessed with reasonable certainty, by including in the profit and loss account turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs to date bear to total expected costs for that contract.
Depreciation has not been charged on the freehold building as the directors consider the estimated residual value of the property to be a significant proportion of the book value, such that the depreciation would be immaterial. The estimated residual value is expected to be high due to the group's policy of maintaining the property such that physical deterioration does not occur and the costs of such maintenance are charged in the year of incidence.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's and parent company's balance sheet when the group or parent company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, 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.
All the group and company's financial assets fall to be classed as basic financial assets and the group and company therefore have no other financial assets.
Financial assets 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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group or parent 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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group or parent company after deducting all of its liabilities.
Basic financial liabilities, including creditors and loans, 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 receipts 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.
All the group and company's financial liabilities fall to be classed as basic financial liabilities and the group and company therefore have no other financial liabilities.
Financial liabilities are derecognised when the group's or parent company's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the parent 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 group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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 company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
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.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
At the end of the reporting period, management undertake an assessment of the net book values of tangible fixed assets and stock, based upon their knowledge of the customers and expected net realisable values. Where necessary, an impairment is recognised in the profit and loss account.
The actual net realisable value may differ from the estimated level of recovery.
At each balance sheet date, management undertake an assessment of the recoverability of trade debtors based upon their knowledge of the customers, ageing of the balances outstanding and previous write off history. Where necessary, an impairment is recorded as a doubtful debt.
The actual level of debt collected may differ from the estimated level of recovery.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
At each balance sheet date, management review each contract individually based on the total contract value, the amounts invoiced up to the year end, the costs incurred up to the year end and the expected post year end costs to complete the contract.
Based upon the above information, management will estimate the expected profit on a contract and will include an element of profit on the contract at the year end by reference to the stage of completion of each contract at the balance sheet date.
The actual profit arising on a contract may differ from the estimate of profit at each balance sheet date.
The useful economic life and expected residual value of tangible fixed assets is assessed at the point of purchase. This is reviewed at the end of the reporting period, in conjunction with the impairment review, to determine whether the estimates are still appropriate.
An analysis of the group's turnover is as follows:
The exceptional charge of £117,000 in the prior year related to a provision against a deposit that the company had paid in respect of a piece of plant and machinery. The supplier of the plant and machinery is in liquidation and therefore the directors provided for this amount in full.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 31 January 2024, all of whose registered offices are the same as this company, are as follows:
The investments in subsidiaries are all stated at cost.
Other loans comprise loans provided by companies under common control. At the year end:
£423,021 (2023: £739,438) is repayable over 6 years by quarterly instalments basis and is subject to interest equal to the USA prime rate, repayable in US Dollars.
£164,395 (2023: £216,303) is repayable over 5 years on a straight line basis and is subject to interest of 2.7% per annum, repayable in pounds sterling.
Both of these loans are unsecured.
Also included in this balance is the following:
£91,644 (2023: nil), £70,705 (2023: nil) of which is secured by fixed charges on the relevant assets and are subject to interest rates between 5.8% and 6.5% per annum, repayable in pounds sterling.
Finance lease payments represent rentals payable by the group for certain items of plant and machinery and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is three years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
As at the signing date of these financial statements, the group has not finalised its capital expenditure programme for the forthcoming year and therefore an assessment as to the likely movement of accelerated capital allowances cannot be made.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Four of the company's subsidiaries have entered into an unlimited Inter-Company Guarantee dated 18 June 2021 (the “Agreement”), which is held as security for the Group bank facilities. Each participating related company (Pakawaste Limited, Pakawaste Engineering Services Limited, System Rental UK Limited and Kelpack Hire Limited) has provided a guarantee to Clydesdale Bank Plc. Under the terms of the Agreement, Clydesdale Bank Plc is authorised to allow set-off for interest purposes and in certain circumstances to seize credit balances and apply them in reduction of liabilities including debit balances within the Composite Accounting System. The maximum potential liability arising under this guarantee at the year end was £nil (2023: £nil).
The Group bank facilities are also secured by debentures in all of the above participating companies.
Operating lease payments represent rentals payable by the group for certain of its properties.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
The group and company have been provided with loans from companies under common control.
At 1 February 2023 £739,438 was owed to companies under common control.
During the year interest of £17,200 (2023: £26,481) was charged and £400,000 (2023: £402,000) of the capital was repaid to companies under common control during the year. One of the loans received from a company under common control is repayable in US Dollars. The loss on foreign exchange for the year ended 31 January 2024 was £83,582 (2023: £nil) which has been included in administrative expenses.
At 31 January 2024 a balance of £423,020 (inclusive of foreign exchange loss) is owed to companies under common control.
The group have also been provided with a loan from a company under common control. At 1 February 2023 £216,303 was owed to companies under common control. During the year, interest of £4,161 (2023: £6,468) was charged and £51,908 (2023: £50,527) of the capital was repaid, leaving a balance of £164,395 owed at 31 January 2024.