Company registration number 12258436 (England and Wales)
CHESHIRE WEST RECYCLING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
CHESHIRE WEST RECYCLING LIMITED
COMPANY INFORMATION
Directors
J Cowell
F Rogers
J Sherratt
C M Skeldon
A Edwards
(Appointed 31 July 2023)
M A Rutter
(Appointed 19 October 2023)
C Smith
(Appointed 12 April 2024)
Company number
12258436
Registered office
Road Three Operations Hub
Road THree
Winsford
CW7 3PD
Auditor
Sedulo Audit Limited
Statutory Auditor
5th Floor, Exchange Flags
Walker House
Liverpool
Merseyside
United Kingdom
L2 3YL
CHESHIRE WEST RECYCLING LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 25
CHESHIRE WEST RECYCLING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Principal activities

Cheshire West Recycling Limited is a council owned company operating in accordance with cooperative principles with a social and environmental purpose.

The company was established in October 2019 and became operationally active on 30th March 2020 providing refuse, recycling, and garden waste collection activities on behalf of Cheshire West and Chester council.

In October 2022 CWR established a Fleet Services division, this new division provides vehicle maintenance service for both internal and external vehicles.

We employ over 300 local people, operate over 80 frontline commercial vehicles, and provide a service to every resident across the borough at least once per week.

Review of Business Activity

The ongoing Russian invasion of Ukraine and the Hamas – Israel conflict meant that wider global factors continued to have a direct impact on the company finances and our ability to deliver the strategic objectives contained in our annual Business Plan.

This has resulted in high energy prices and the delay and availability of obtaining materials which has impacted on our operational delivery and the completion of key capital projects including the refurbishment of our Canalside Materials Recycling Facility.

We continue to seek ways to mitigate these strategic impacts and ensure the organisation

continues to operate within budget and meet our operational objectives.

CHESHIRE WEST RECYCLING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

Operational Statistics

Cheshire West Recycling (CWR) has shown steady improvements in service performance metrics. The 'right first time' collection rate increased to 99.96%. Missed collections rectified within the target timeframe saw a substantial increase from 73.08% to 98.09%, reflecting a 34.01% improvement. Bulky collections remained consistent while container deliveries within target improved significantly from 77.52% to 92.79%, a 19.68% increase. These improvements highlight efforts to enhance operational reliability, with over 18 million collections successfully completed.

In terms of material management, CWR collected 45,749 tonnes of domestic waste, 7,787 tonnes of food waste, and 25,208 tonnes of garden waste. Additionally, 10,723 tonnes of fibre mix and 16,174 tonnes of container mix were processed. These figures demonstrate CWR's role in managing various waste streams and contributing to addressing the climate emergency.

Other significant achievements

We were delighted to be awarded the 23/24 Best Service team at the Association for Public Services (APSE) awards, in partnership with Cheshire West and Chester Council. This external recognition demonstrated the strong collaborative partnership in place with the Council.

 

CWR were also finalists in the 2023/24 Local Authority Advisory Committee’s Celebration Awards for Best New Idea for our initiative Plan, Deliver, Review approach operational methodology that delivered in year £80k efficiency savings. In addition to all our key performance indicators being green and 99.98% of our collections being right first time.

 

We also saw a 15% decrease in fuel volume usage, which was a third greater than the original business plan target. Our near miss reporting increased by 20% giving more insight to safety improvement areas.

 

Following completion of service change to core areas we also reviewed our Route Risk Assessments on 100% of collection rounds. All external accreditations and compliance with external agencies have been successfully maintained

 

We continued to develop our One of Our Own’ frontline development initiative and completed a succession planning exercise and gap analysis. Four loaders were upskilled to become drivers. As part of our commitment to providing permanent employment opportunities, we reduced in year the use of agency labour by 80%, eliminating the need for a dedicated agency provider and increasing workforce stability. A total of 20 people were trained in accident and incident management, increasing the safety of our frontline operation

CHESHIRE WEST RECYCLING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

Social Value

We have partnered with Thrive, an independent organisation who provide a platform to measure our company’s social value impact, in line with government guidance and who have extensive experience in working with the public and private sectors.

This has enabled us to determine that since formation in March 2020, we have generated a cumulative social value of £73.6m, this is divided into £50m intrinsic and £23.6m added social value.

This is made up of:

Fighting Climate Change    £26.2m

Wellbeing & Equal Opportunity    £4.8m

Tackling Economic Inequality    £42.6m

This has resulted in a social value return of £20m for the calendar year of 2023, consisting of £13.3m intrinsic and £6.6m added social value.

Our 2023 highlights include:

We will continue to ensure that maximising our social value impact is embedded at the heart of all our strategic and operational decision making, aligned with our founding co-operative principles.

Financial Review

The Loss Before Taxation of £304k is broadly explained as follows.

Depressed prices for the sale of recovered materials from the second half of 2022/23 continued into the first half of 2023/24, however they did recover and finished the year broadly in line with budget. This gave a downside of £110k.

The company have continued to use an experienced material trader to ensure this revenue stream is maximised fully, the actual levels of revenue achieved are higher than published indices.

Delays to the building of the new Materials Recovery Facility (MRF), led to unprocessed recyclable materials being sent on to a third party for longer than budgeted. This resulted in a loss of income of approximately £240k.

Insourcing of the fleet maintenance function progressed well and by the end of the financial year was at break even. However, inefficiencies in the earlier part of the year led to a downside of £60k.

The Cash position continues to improve, with no loans required throughout the year. The company was therefore able to benefit from unbudgeted bank interest of £98k.

Controls around operational delivery through the Plan, Deliver, Review methodology remain effective. This has helped deliver efficiency savings of around £80k and ensured that no material variances regarding headcount, overtime or absence have been seen in the year.

CHESHIRE WEST RECYCLING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Principal Risks, Uncertainties and Mitigation

Since 2019, we have maintained a robust approach to risk management. Operational business continuity planning sits at the heart of everything we do and, as a minimum reviewed quarterly. Our business continuity planning has been effective in maintaining service provision throughout a range of events from extreme weather to the impacts of the global conflicts being experienced.

The volatile prices for the sale of recovered materials remains a significant risk, efforts to mitigate this as far as possible through improving the quality of collected materials and processed materials continues.

At a strategic level our organisational risk registers are maintained and reported to our Board on a six-monthly basis.

The shareholder has written to the board of directors to confirm its ongoing support of the business.

On behalf of the board

A Edwards
Director
2 December 2024
CHESHIRE WEST RECYCLING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Results and dividends

The results for the year are set out on page 10. No dividends will be distributed for the year ended 31 March 2024.

Directors

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

J Cowell
F Rogers
J Sherratt
C M Skeldon
J M Bannister
(Resigned 29 September 2023)
A Edwards
(Appointed 31 July 2023)
M A Rutter
(Appointed 19 October 2023)
C Smith
(Appointed 12 April 2024)
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests. The company has also appointed two employee directors.

 

Information about matters of concern to employees is given through communication channels which include monthly newsletters, video boards, Vlogs, text media and ongoing PDR reviews which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

Auditor

In accordance with the company's articles, a resolution proposing that Sedulo Audit Limited be reappointed as auditor of the company will be put at a General Meeting.

CHESHIRE WEST RECYCLING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 6 -
Statement of directors' responsibilities

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 surplus or deficit of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 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.

Strategic report

The company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
A Edwards
Director
2 December 2024
CHESHIRE WEST RECYCLING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CHESHIRE WEST RECYCLING LIMITED
- 7 -
Opinion

We have audited the financial statements of Cheshire West Recycling Limited (the 'company') for the year ended 31 March 2024 which comprise the income and expenditure account, the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:

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:

CHESHIRE WEST RECYCLING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CHESHIRE WEST RECYCLING LIMITED (CONTINUED)
- 8 -
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:

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:

Extent to which the audit was capable of detecting irregularities, including fraud

The primary responsibility for the prevention and detection of fraud rests with directors and management, and we cannot be expected to detect non-compliance with all laws and regulations.

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our knowledge of the business and sector, enquiries of directors and management, and review of regulatory information and correspondence. We communicated identified laws and regulations throughout the audit team and remained alert to any indications of non-compliance throughout the audit.

 

We discussed with directors and management the policies and procedures in place to ensure compliance with laws and regulations and otherwise prevent, deter and detect fraud.

    

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations identified as potentially having a material effect on the financial statements. Our procedures included review of financial statement information and testing of that information, enquiry of management and examination of relevant documentation, analytical procedures to identify unusual or unexpected relationships that may indicate fraud, and procedures to address the risk of fraud through director or management override of controls.

 

CHESHIRE WEST RECYCLING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CHESHIRE WEST RECYCLING LIMITED (CONTINUED)
- 9 -

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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Katelyn Dutton
Senior Statutory Auditor
For and on behalf of Sedulo Audit Limited
3 December 2024
Chartered Accountants
Statutory Auditor
Statutory Auditor
5th Floor, Exchange Flags
Walker House
Liverpool
Merseyside
United Kingdom
L2 3YL
CHESHIRE WEST RECYCLING LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
as restated
Notes
£
£
Turnover
3
16,481,601
18,686,801
Cost of sales
(14,891,206)
(16,507,462)
Gross surplus
1,590,395
2,179,339
Administrative expenses
(2,018,866)
(2,199,573)
Other operating income
6,588
-
0
Operating deficit
4
(421,883)
(20,234)
Interest receivable and similar income
7
90,824
55,664
Interest payable and similar expenses
8
-
0
(27,878)
(Deficit)/surplus before taxation
(331,059)
7,552
Tax on (deficit)/surplus
9
27,281
76,131
(Deficit)/surplus for the financial year
(303,778)
83,683

The income and expenditure account has been prepared on the basis that all operations are continuing operations.

The notes on pages 14 to 25 form part of these financial statements.

CHESHIRE WEST RECYCLING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
2024
2023
as restated
£
£
(Deficit)/surplus for the year
(303,778)
83,683
Other comprehensive income
Revaluation of tangible fixed assets
(5,500)
(134,000)
Tax relating to other comprehensive income
1,375
82,365
Other comprehensive income for the year
(4,125)
(51,635)
Total comprehensive income for the year
(307,903)
32,048

The notes on pages 14 to 25 form part of these financial statements.

CHESHIRE WEST RECYCLING LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 12 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
10
364,673
549,014
Current assets
Stocks
11
151,878
73,001
Debtors
12
793,646
779,694
Cash at bank and in hand
1,610,841
2,070,637
2,556,365
2,923,332
Creditors: amounts falling due within one year
13
(2,970,914)
(3,185,663)
Net current liabilities
(414,549)
(262,331)
Total assets less current liabilities
(49,876)
286,683
Provisions for liabilities
Deferred tax liability
14
8,407
37,063
(8,407)
(37,063)
Net (liabilities)/assets
(58,283)
249,620
Reserves
Revaluation reserve
4,125
53,920
Income and expenditure account
(62,408)
195,700
Members' funds
(58,283)
249,620

The notes on pages 14 to 25 form part of these financial statements.

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 2 December 2024 and are signed on its behalf by:
A Edwards
Director
Company registration number 12258436 (England and Wales)
CHESHIRE WEST RECYCLING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
Revaluation reserve
Income and expenditure
Total
£
£
£
As restated for the period ended 31 March 2023:
Balance at 1 April 2022
304,555
(86,983)
217,572
Effect of change in accounting policy
-
0
199,000
199,000
As restated
304,555
112,017
416,572
Year ended 31 March 2023:
Surplus
-
83,683
83,683
Other comprehensive income:
Revaluation of tangible fixed assets
(134,000)
-
(134,000)
Tax relating to other comprehensive income
82,365
-
0
82,365
Total comprehensive income
(51,635)
83,683
32,048
Transfers
(199,000)
-
0
(199,000)
Balance at 31 March 2023
53,920
195,700
249,620
Year ended 31 March 2024:
Deficit
-
(303,778)
(303,778)
Other comprehensive income:
Revaluation of tangible fixed assets
(5,500)
-
(5,500)
Tax relating to other comprehensive income
1,375
-
0
1,375
Total comprehensive income
(4,125)
(303,778)
(307,903)
Transfers
(45,670)
45,670
-
Balance at 31 March 2024
4,125
(62,408)
(58,283)

The notes on pages 14 to 25 form part of these financial statements.

CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
1
Accounting policies
Company information

Cheshire West Recycling Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is Road Three Operations Hub, Road Three, Winsford, CW7 3PD.

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 as modified by the revaluation of certain assets. The principal accounting policies adopted are set out below.

This 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:

 

 

The financial statements of the company are consolidated in the financial statements of Cheshire West and Chester Council. These consolidated financial statements are available from its registered office, 4 Civic Way, Ellesmere Port, CH65 OBE.

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 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 and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

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.

CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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:

Plant and equipment
1.5 - 10 years straight line
Fixtures and fittings
3 years straight line
Motor vehicles
1 - 10 years straight line
Assets acquired through business combinations
Not depreciated

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 surplus or deficit.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in surplus or deficit or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in surplus or deficit.

1.5
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 surplus or deficit, 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 surplus or deficit, 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.

CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
1.6
Stocks

Stocks 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 stocks to their present location and condition.

 

Stocks 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.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Financial instruments
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 surplus or deficit, 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 surplus and deficit, 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 surplus or deficit.

 

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 surplus or deficit.

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.

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 surplus or deficit 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.

CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.8
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are 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 when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.9
Employee benefits

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

 

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.

CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
1.10
Retirement benefits

Retirement benefits to employees are provided by the Local Government Pension Scheme (‘LGPS’). This is a defined benefit pension scheme and the assets are held separately from those of the company.

 

The LGPS is a funded multi-employer scheme. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected method and discounted at a rate equivalent to the current rate of return on high quality corporate bonds of equivalent term to the liabilities.

 

On 26 March 2020, the company, the scheme employer and the administering authority (Cheshire West and Chester Borough Council) entered into a ‘pass-through’ agreement. The effect of this agreement is to make the company responsible only for the primary contributions. Any surplus or deficit relating to the company’s share of the fund stays with the scheme employer.

 

Consequently, the LGPS is treated as a defined contribution scheme for accounting purposes and the contributions are recognised in the profit and loss account in the period to which they relate.

1.11
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Contract Income
14,983,176
15,572,916
Other Service Income
50,000
50,000
Sale of Materials
966,945
2,696,379
Workshops Income
423,457
367,506
Commercial Income
58,023
-
16,481,601
18,686,801
CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
3
Turnover and other revenue
(Continued)
- 19 -
2024
2023
£
£
Other revenue
Interest income
90,824
55,664
4
Operating deficit
2024
2023
Operating deficit for the year is stated after charging/(crediting):
£
£
Exchange losses
120
41
Fees payable to the company's auditor for the audit of the company's financial statements
14,700
14,000
Depreciation of owned tangible fixed assets
102,111
128,394
Profit on disposal of tangible fixed assets
(8,117)
(14,446)
5
Employees

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

2024
2023
Number
Number
Administration
23
15
Operational
278
257
Total
301
272

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
9,179,652
7,858,519
Social security costs
863,396
791,275
Pension costs
347,483
297,983
10,390,531
8,947,777
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
229,328
217,871
CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
6
Directors' remuneration
(Continued)
- 20 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
85,495
194,506
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
90,824
55,664
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
-
27,878
9
Taxation
2024
2023
£
£
Deferred tax
Origination and reversal of timing differences
(28,656)
(158,496)
Other adjustments
1,375
82,365
Total deferred tax
(27,281)
(76,131)
CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Taxation
(Continued)
- 21 -
2024
2023
£
£
(Loss)/profit before taxation
(331,059)
7,552
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
(82,765)
1,888
Tax effect of expenses that are not deductible in determining taxable profit
3,193
3,508
Tax effect of income not taxable in determining taxable profit
-
0
(13,916)
Adjustments in respect of prior years
(25,338)
(85,184)
Group relief
42,404
-
0
Permanent capital allowances in excess of depreciation
(9,568)
(75,407)
Depreciation on assets not qualifying for tax allowances
44,793
92,980
Taxation credit for the year
(27,281)
(76,131)

In addition to the amount credited to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2024
2023
£
£
Deferred tax arising on:
Revaluation of property, plant and equipment
(1,375)
(82,365)
CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Assets acquired through business combinations
Total
£
£
£
£
£
Cost
At 1 April 2023
301,349
2,313
405,300
98,000
806,962
Additions
38,270
-
0
-
0
-
0
38,270
Disposals
-
0
-
0
(96,000)
(87,000)
(183,000)
Revaluation
-
0
-
0
-
0
(5,500)
(5,500)
At 31 March 2024
339,619
2,313
309,300
5,500
656,732
Depreciation and impairment
At 1 April 2023
98,672
1,606
157,670
-
0
257,948
Depreciation charged in the year
43,254
707
58,150
-
0
102,111
Eliminated in respect of disposals
-
0
-
0
(68,000)
-
0
(68,000)
At 31 March 2024
141,926
2,313
147,820
-
0
292,059
Carrying amount
At 31 March 2024
197,693
-
0
161,480
5,500
364,673
At 31 March 2023
202,677
707
247,630
98,000
549,014

Assets acquired through business combinations with a carrying value after disposals during the year, were revalued to £5,500 by Dennis Eagle and Whitham Mills, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar assets. If the assets were measured using the cost model, the cost and carrying amount would be £nil.

 

The revaluation deficit of £5,500 was taken to the revaluation reserve together with proceeds on disposals of assets at valuation.

11
Stocks
2024
2023
£
£
Raw materials and consumables
151,878
73,001
CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Service charges due
27,464
45,092
Amounts owed by group undertakings
-
0
186,219
Other debtors
2,559
4,055
Prepayments and accrued income
763,623
544,328
793,646
779,694
13
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
258,259
582,267
Amounts owed to group undertakings
260,666
-
0
Taxation and social security
366,190
438,948
Accruals and deferred income
2,085,799
2,164,448
2,970,914
3,185,663
14
Deferred taxation

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

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
88,418
186,678
Tax losses
(81,386)
(67,250)
Revaluations
1,375
(82,365)
8,407
37,063
2024
Movements in the year:
£
Liability at 1 April 2023
37,063
Credit to profit or loss
(28,656)
Liability at 31 March 2024
8,407
CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
14
Deferred taxation
(Continued)
- 24 -

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.

15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
347,483
297,983

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.

 

The LGPS is a funded defined benefit pension scheme with the assets held in separate trustee-administered funds. The employer contribution rate was 20.4% (2022: 20.4%).

 

As referred to in the accounting policies notes, the company entered into a ‘pass-through’ agreement with the scheme employer and the administering authority and as a result the LGPS is treated a defined contribution scheme for accounting purposes.

 

Total contributions payable to the scheme was £347,483 (2023: £297,983) and the amount outstanding and included in creditors was £27,857 (2023: £25,000).

 

16
Members' liability

The company is limited by guarantee, not having a share capital and consequently the liability of members is limited, subject to an undertaking by each member to contribute to the net assets or liabilities of the company on winding up such amounts as may be required not exceeding £1.

17
Operating lease commitments

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

2024
2023
£
£
Within one year
78,674
120,646
Between two and five years
43,820
-
0
122,494
120,646
18
Members' liability

 

The company is limited by guarantee, not having a share capital and consequently the liability of members is limited, subject to an undertaking by each member to contribute to the net assets or liabilities of the company on winding up such amounts as may be required not exceeding £1.

CHESHIRE WEST RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
19
Ultimate controlling party

The ultimate controlling party is deemed to be Cheshire West and Chester Borough Council.

20
Prior period adjustment
Reconciliation of changes in equity
The prior period adjustments do not give rise to any effect upon equity.
Reconciliation of changes in surplus for the previous financial period
2023
£
Adjustments to prior year
Profit on disposal of tangible assets
(199,000)
Surplus as previously reported
282,683
Surplus as adjusted
83,683
Notes to reconciliation

Historically, the Company acquired assets from the Cheshire West & Chester Council for zero consideration. These assets were subsequently revalued through other comprehensive income. At the time of which these assets were disposed, the revalued cost was offset against the revaluation reserve instead of the proceeds in the profit and loss. The restatement corrects the error.

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