Company Registration No. 03852634 (England and Wales)
ROYDON RESOURCE RECOVERY LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 OCTOBER 2024
31 October 2024
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
ROYDON RESOURCE RECOVERY LTD
COMPANY INFORMATION
Directors
Mr W Sumner
Mr GR Wallwork
Mrs SP Sumner
Ms V Hamer
(Appointed 10 December 2024)
Secretary
Mrs SP Sumner
Company number
03852634
Registered office
Units 1-3
Junction Eco Park
Rake Lane
Swinton
M27 8LU
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
ROYDON RESOURCE RECOVERY LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Balance sheet
10
Notes to the financial statements
11 - 22
ROYDON RESOURCE RECOVERY LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 1 -
The directors present the strategic report for the year ended 31 October 2024.
Review of the business
The principal activity of the company continues to be that of plastic waste reclamation and the trade of buying, selling, and merchanting waste plastic.
2024 has been a difficult year for the company. Continuing volatility in both availability and price of material saw a significant drop in production and sales in the early part of the year. This encouraged us to review our operating structure to ensure that we achieve operational efficiency. As a result of the review, the decision was taken to relocate an associated company and customer of the company from South Wales to Swinton. This will significantly reduce overhead costs for both entities by allowing a continuous process from the reclamation of waste material to the production of PET flake and granules for resale. The relocation commenced in July 2024 and was completed after the year end, however the closure of the Wales site further impacted the company’s turnover and profitability in the final quarter of 2024.
Further clarification on the Deposit Return Scheme has been seen, with the Scheme now due to take effect in 2027. This is expected to have a material effect on the supply and quality of feedstock once implemented and with our new operating structure in place, should bring considerable opportunities for growth.
Whilst the directors are disappointed with the results for the year, they are confident that the decisions taken during the year will have considerable benefits for the future. Since the year end, the group has seen improvement in sales and a return to profitability.
Principal risks and uncertainties
The group finances its operations through a mixture of retained profits, bank borrowings and where necessary to fund capital expenditure programmes through the hire purchase financing arrangements. The management's objectives are to:
- retain sufficient liquid funds to enable it to meet its day to day obligations as they fall due; and
- match the repayment schedule of any external finance with the expected cash flows expected to arise from the company's trading activities.
As the group's surplus funds are primarily invested in sterling bank accounts, this limits exposure to price risk.
Surplus funds held in foreign currencies do however expose the group to price risk from foreign exchange movements.
Credit risk associated with these funds is minimised through holding accounts with a UK clearing bank.
The group is exposed to price risk in connection with sales being denominated in foreign currencies. This exposes the group to the uncertainty of exchange rate movements. Hedge accounting is not used by the group since the directors do not consider the additional costs incurred in reducing exchange risk to be worthwhile.
The group's credit risk is primarily attributable to its trade debtors. Credit insurance is utilised to reduce this particular risk.
It is the group's policy that payments to suppliers are made in accordance with those terms and conditions agreed between the group and it's suppliers, provided that all trading terms and conditions have been complied with.
ROYDON RESOURCE RECOVERY LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 2 -
Key performance indicators
The company's key financial and other performance indicators during the year were as follows:
2024 2023
Turnover £11,537,388 £16,860,782
Gross Profit £1,968,736 £3,604,101
Gross Profit % 17% 21%
Operating Profit/(Loss) (£435,766) £1,092,130
Profit/(Loss) Before tax (£577,566) £731,745
Net Assets £3,812,340 £4,244,976
Mr W Sumner
Director
16 July 2025
ROYDON RESOURCE RECOVERY LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 October 2024.
Principal activities
The principal activity of the company continued to be that of plastic waste reclamation.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr W Sumner
Mr GR Wallwork
Mrs SP Sumner
Ms V Hamer
(Appointed 10 December 2024)
Auditor
PM+M Solutions for Business LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006.
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 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; and
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.
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.
ROYDON RESOURCE RECOVERY LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 4 -
On behalf of the board
Mr W Sumner
Ms V Hamer
Director
Director
16 July 2025
ROYDON RESOURCE RECOVERY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROYDON RESOURCE RECOVERY LTD
- 5 -
Opinion
We have audited the financial statements of Roydon Resource Recovery Ltd (the 'company') for the year ended 31 October 2024 which comprise the statement of income and retained earnings, the balance sheet 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 October 2024 and of its loss 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.
ROYDON RESOURCE RECOVERY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROYDON RESOURCE RECOVERY LTD (CONTINUED)
- 6 -
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 directors' 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 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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
ROYDON RESOURCE RECOVERY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROYDON RESOURCE RECOVERY LTD (CONTINUED)
- 7 -
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:
the nature of the industry and sector, control environment and business performance including the design of the Company's remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
the matters discussed among the audit engagement team and relevant specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud;
any matters we identified having obtained and reviewed the Company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety regulations, pensions legislation and tax legislation.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the identified risks of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
ROYDON RESOURCE RECOVERY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROYDON RESOURCE RECOVERY LTD (CONTINUED)
- 8 -
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.
Daniel Bowles BFP ACA FCCA (Senior Statutory Auditor)
For and on behalf of PM+M Solutions for Business LLP, Statutory Auditor
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
16 July 2025
ROYDON RESOURCE RECOVERY LTD
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 OCTOBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
11,537,388
16,860,782
Cost of sales
(9,568,652)
(13,256,681)
Gross profit
1,968,736
3,604,101
Administrative expenses
(2,408,882)
(3,302,437)
Other operating income
4,380
790,466
Operating (loss)/profit
4
(435,766)
1,092,130
Interest receivable and similar income
6
415
Interest payable and similar expenses
7
(141,800)
(360,800)
(Loss)/profit before taxation
(577,566)
731,745
Tax on (loss)/profit
8
144,930
(419,626)
(Loss)/profit for the financial year
(432,636)
312,119
Retained earnings brought forward
4,244,975
3,932,856
Retained earnings carried forward
3,812,339
4,244,975
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ROYDON RESOURCE RECOVERY LTD
BALANCE SHEET
AS AT
31 OCTOBER 2024
31 October 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
5,197,028
3,749,753
Current assets
Stocks
10
1,097,388
1,459,913
Debtors
11
6,171,340
6,357,582
Cash at bank and in hand
97,356
369,697
7,366,084
8,187,192
Creditors: amounts falling due within one year
12
(6,960,353)
(5,334,320)
Net current assets
405,731
2,852,872
Total assets less current liabilities
5,602,759
6,602,625
Creditors: amounts falling due after more than one year
13
(1,119,019)
(1,541,319)
Provisions for liabilities
Deferred tax liability
15
671,400
816,330
(671,400)
(816,330)
Net assets
3,812,340
4,244,976
Capital and reserves
Called up share capital
17
1
1
Profit and loss reserves
3,812,339
4,244,975
Total equity
3,812,340
4,244,976
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 16 July 2025 and are signed on its behalf by:
Mr W Sumner
Ms V Hamer
Director
Director
Company registration number 03852634 (England and Wales)
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
- 11 -
1
Accounting policies
Company information
Roydon Resource Recovery Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Units 1-3, Junction Eco Park, Rake Lane, Swinton, M27 8LU.
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.
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 Roydon Holdings Limited. These consolidated financial statements are available from its registered office, Units 1-3 Junction Eco Park, Rake Lane, Swinton, United Kingdom, M27 8LU.
1.2
Business combinations
The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
1.3
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.
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 12 -
1.4
Turnover
Turnover represents goods delivered and PRN (Packaging recovery note) / PERN (Packaging export recovery note) sales during the year excluding VAT. PRN/PERN sales are recognised on the supply of PRN/PERN's.
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.5
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:
Leasehold land and buildings
Straight line over the term of the lease
Plant and equipment
5% - 50% straight line
Fixtures and fittings
33.33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Stocks
Stocks are valued at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first in, first out basis together with attributable overheads based on normal level of activity, after making due allowance for production losses.
Net realisable value is based on estimated selling price less further costs to completion and disposal.
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’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 13 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs. 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 and loans from fellow group companies are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.
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.
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 14 -
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 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.
1.11
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.
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 15 -
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
As lessee
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 leases asset are consumed.
1.14
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.
The main areas of judgement that have a risk of causing material misstatement to the carrying amounts of assets and liabilities are in relation to stock provisions and useful economic lives of the company's fixed assets.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Plastic waste reclamation
11,537,388
16,860,782
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
3
Turnover and other revenue
(Continued)
- 16 -
2024
2023
£
£
Turnover analysed by geographical market
UK
10,692,150
16,447,182
Rest of the world
845,238
413,600
11,537,388
16,860,782
2024
2023
£
£
Other revenue
Interest income
-
415
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(26,684)
(11,973)
Fees payable to the company's auditor for the audit of the company's financial statements
6,000
10,000
Depreciation of owned tangible fixed assets
503,010
225,486
Depreciation of tangible fixed assets held under finance leases
74,909
74,215
(Profit)/loss on disposal of tangible fixed assets
415,881
Operating lease charges
430,373
392,581
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production
37
35
Administration
4
4
Directors
3
3
Total
44
42
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
5
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,510,081
1,442,636
Pension costs
28,697
27,012
1,538,778
1,469,648
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
415
7
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
19
1,341
Interest on invoice finance arrangements
52,045
71,256
Interest on finance leases and hire purchase contracts
114,736
128,264
Other interest
(25,000)
159,939
141,800
360,800
8
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
32
Deferred tax
Origination and reversal of timing differences
(144,930)
419,594
Total tax (credit)/charge
(144,930)
419,626
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
8
Taxation
(Continued)
- 18 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(577,566)
731,745
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.52%)
(144,392)
164,789
Tax effect of expenses that are not deductible in determining taxable profit
1,609
29,837
Tax effect of income not taxable in determining taxable profit
(6,250)
Adjustments in respect of prior years
32
Effect of change in corporation tax rate
41,660
Group relief
246,320
Permanent capital allowances in excess of depreciation
(63,218)
Other permanent differences
4,074
206
Fixed Asset Differences
29
Taxation (credit)/charge for the year
(144,930)
419,626
9
Tangible fixed assets
Leasehold land and buildings
Assets under construction
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
£
Cost
At 1 November 2023
275,009
6,377,441
109,250
6,761,700
Additions
3,422
628,399
41,864
101,509
775,194
Business combinations
1,250,000
1,250,000
At 31 October 2024
278,431
1,878,399
6,419,305
210,759
8,786,894
Depreciation and impairment
At 1 November 2023
275,009
2,643,229
93,709
3,011,947
Depreciation charged in the year
114
506,055
71,750
577,919
At 31 October 2024
275,123
3,149,284
165,459
3,589,866
Carrying amount
At 31 October 2024
3,308
1,878,399
3,270,021
45,300
5,197,028
At 31 October 2023
3,734,212
15,541
3,749,753
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
9
Tangible fixed assets
(Continued)
- 19 -
Tangible fixed assets includes assets held under finance leases or hire purchase contracts, as follows:
2024
2023
£
£
Plant and equipment
2,049,511
2,468,366
10
Stocks
2024
2023
£
£
Raw materials and consumables
1,097,388
1,459,913
11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
891,478
976,589
Corporation tax recoverable
127,375
Amounts owed by group undertakings
3,357,033
3,213,024
Other debtors
1,602,940
1,764,719
Prepayments and accrued income
319,889
275,875
6,171,340
6,357,582
Amounts owed by group undertakings are interest free and repayable on demand.
12
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
14
422,299
423,468
Trade creditors
2,446,595
2,279,298
Corporation tax
32
Other taxation and social security
26,898
217,148
Other creditors
1,982,231
945,526
Accruals and deferred income
2,082,298
1,468,880
6,960,353
5,334,320
The amounts owed to group undertakings are interest free and repayable on demand.
The amounts advanced under invoice discounting £681,870 (2023: £473,969) are secured by a cross guarantee and debenture given by all group companies.
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 20 -
13
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
14
1,119,019
1,541,319
14
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
422,301
521,276
In two to five years
1,483,454
1,904,198
1,905,755
2,425,474
Less: future finance charges
(364,437)
(460,687)
1,541,318
1,964,787
Obligations due under finance leases are secured on the assets to which the agreement relates.
15
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
748,500
816,823
Losses and other deductions
(76,577)
-
Short term timing differences
(523)
(493)
671,400
816,330
2024
Movements in the year:
£
Liability at 1 November 2023
816,330
Credit to profit or loss
(144,930)
Liability at 31 October 2024
671,400
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.
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 21 -
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
28,697
27,012
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.
There are no contribution amounts outstanding at year end.
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
18
Operating lease commitments
As lessee
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 1 year
120,720
403,637
Years 2-5
108,594
315,773
229,314
719,410
ROYDON RESOURCE RECOVERY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 22 -
19
Related party transactions
Roydon Recycling UK Limited
During the year the company entered into transactions with Roydon Recycling UK Limited, a company of which Mr G Wallwork and Mrs S P Sumner were directors and shareholders of the parent company Roydon Recycling Holdings (UK) Limited.
During the year the company made sales of goods and services to this company of £Nil (2023: £801,976) and purchased goods and services from this company totaling £143,126 (2023: £1,123,800).
A net balance of £Nil was owed by (2023: owed to £153,458) Roydon Recycling UK Limited at year end.
Outstanding balances are payable on demand, interest free and not secured.
Roydon Bottle Recycling Limited
During the year, the company entered into transactions with Roydon Bottle Recycling Limited, a company of which Mr G Wallwork and Mr W Sumner are directors and shareholders and of which Mrs S P Sumner is a director.
During the year, the company made sales of goods and services to this company of £3,415,313 (2023: £4,627,824) and purchased goods and services from this company totaling £47,156 (2023: £68,109).
A net balance of £1,111,699 was owed by (2023: £1,756,201) Roydon Bottle Recycling Limited at year end.
Outstanding balances are payable on demand, interest free and not secured.
20
Ultimate controlling party
The parent of Roydon Resource Recovery Limited is Roydon Group PLC, a company registered and incorporated in England and Wales. The financial statements can be obtained from the registered office.
The smallest and largest group into which the entity is consolidated is Roydon Holdings Limited, a company registered and incorporated in England and Wales. This being the ultimate controlling party. The financial statements can be obtained from the registered office.
The ultimate controlling part is G Wallwork owning 50% of Roydon Holdings Limited.
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