The directors present the strategic report for the year ended 31 March 2025.

The board of directors of the company consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regards to the shareholders and matters set out in S172(1)(a-f) of the Companies Act 2006) in the decisions taken during the year ended 31 March 2025.

The company seeks to ensure that it operates on a fair and ethical basis. Directors are expected to act in accordance with the duties of directors as defined within the Companies Act, section 172. Therefore, in summary they must consider and act in a manner that facilitates:

• The likely consequences of decisions long term.

• The interests of the company’s employees

• The needs to foster the company’s business relationships

• The impact of the company on the community and environment

• The need to act fairly and responsibly

The company has policies and procedures to ensure corporate governance is maintained and followed. The directors operate within the framework provided in the Articles of Association and reserved shareholder matters.

Fair Review of Business

During the period of review the business continued to focus on understanding performance through analysis of financial data, and productivity data. Utilising analysis tools and having discussion on process improvement and standardisation across the geographical areas and the sharing of good practices resulted in a positive financial performance.

The Directors are pleased with the progress and the financial performance of the business. The focus remains on delivery and maximising efficiencies in highway maintenance in addition to delivery of non-highways work for other functions of our shareholder such as bereavement services and housing and property maintenance.

Long term decision making

The board meets regularly to review performance and make decisions which impact the future performance of the company. The board make decisions on significant contracts to ensure they meet internal guidelines and support the future performance of the company.

High standard of business conduct

As a highway maintenance company owned by its local authority, the company is actively focussed on maintaining its reputation and that of its shareholding authority. The company regularly reviews its operations and performance to ensure they are legally compliant, economically efficient, and both socially and environmentally ethical.

Acting fairly

The company, and its board of directors, make decisions considering the needs of the company, its shareholders and its wider stake holding community.

Engagement with suppliers, customers, and others in a business relationship with the company

The company works closely with its largest customer, which is also the statutory authority, having almost daily contact and regular contract management meetings.

We aim to deal with our suppliers with a high degree of integrity as we rely on them to help us provide supplies and services to operate our business.

Community and environment

As a highway maintenance company owned by its local authority, the company takes its responsibilities to its local communities and environment seriously.

Disabled Persons

Applications for employment by disabled persons are always fully considered and we employ a number of employees in this classification. In the event a member of staff was to become disabled every effort is made to ensure that their employment within the company continues and that appropriate training and facilities are arranged. It is the policy of the company that all individuals employed experience the same level of training, career development and promotion subject to aptitude and application.

Employee Involvement

Consultation and discussion with all employees take place throughout the organisation. Directors’ meetings are held monthly, Senior Leadership Team meetings are also conducted monthly, Depot and Supervision meetings are conducted weekly, Engagement meetings with supervisors and employee representatives are twice a year, union meetings are conducted monthly. The output of each of these meetings and the matters discussed are contained within the minutes and communicated to the attendees. Information is also cascaded to all through the company intranet, information screens in each depot, newsletters, and bulletins. Matters of importance that affect the financial and economic performance of the business are communicated to the employees through the channels above.

The risks to the business are fluctuating material and labour costs, ageing workforce and capabilities, reliance on our shareholders highway budget as the principal source of income, and interest rate and liquidity risk. The company operates a robust risk management procedure to ensure risk associated with these topics are identified, assigned an owner, and are regularly reviewed and updated with mitigation measures. These are summarised below:  

Fluctuating Material and Labour Costs

Material and Labour for contractor delivered works are procured through a mixture of procurement models, including but not limited to Frameworks and Dynamic Purchasing Systems. Budgets are set for delivery of works utilising agree rates and historical data. There is no guarantee of works to contractors. This allows the flexibility to return to the market for competitive pricing. In addition, the measures, outlined below, taken to address the ageing workforce will assist with the increase in capabilities to self-deliver works. Resulting in less reliance on contractors and therefore more control of costs. Introduction of dynamic purchasing systems and compliance with the new procurement act and deploying the new regulations will allow NY Highways Ltd to maximise its buying power.

Ageing Workforce and Capabilities

The UK construction sector has identified an aging workforce as an issue over several years. This is particularly relevant to the highway sector as we compete with other sectors to attract new entrants to what can be a challenging environment to work in. The business has been successful in securing apprentice numbers that equate to approximately ten percent of our total workforce. We have achieved this through attractive rates of pay for apprentices and having a well-developed programme for gaining the necessary skills to be successful with the industry. We have invested in training of our existing employees and apprentices to ensure we have the capabilities to deliver more works directly. This strategy is being extended further through the creation of a training academy that will allow the upskilling of the local labour market and reduce our direct costs for training.

Reliance on Shareholders Highway Budget  

Reliance on North Yorkshire Council Highways budget presents a risk due to the challenges of local government finances and the uncertainty of the amount of budget and therefore work available in future years. The local government reorganisation of our shareholder has provided new avenues to work outside of the highways budget. In addition, the upskilling of our workforce is reducing reliance on contractors and allowing more works to be delivered directly. These two elements provide the business with the opportunity to pursue works within other sectors outside of the Highways budget. Obtainment of certification to recognised standards such as ISO 9001, 14001 and 45001 provide the business with the prerequisites for supplier accreditation for external works to be secured from other local authorities and tier 1 contractors. Partnering with other Shareholder owned business to provide a one stop shop approach will also maximise our offering to the marker and bring in additional revenue.

Interest Rate Risk and Liquidity

The company holds cash balances that provide an interest rate return, the borrowings we hold are secured through our main shareholder on a loan facility basis which provides the business with a degree of flexibility should liquidity become a risk. However, the cash position of the business is strong and the direct award of works due to the nature of the business being a Teckal reduces risk in this area to a large degree.

Balanced and comprehensive analysis of development and performance during the year and the position at the end of it

The financial performance of the business and increasing profit margin year to year when most works are delivered back to the shareholder at cost plus zero is encouraging to the Directors. The profitability and productivity report available in real time to the directors coupled with a structured programme of meetings, reports, and reviews allows the management of the risks outlined above in a timely manner and this is clearly showing positive results. Continued engagement and refinement of shared process will allow further efficiencies to be generated.

Key performance Indicators

Carbon Reduction and Energy Use

The highways sector and the traditional treatments being applied are heavily reliant on fossil fuels and Carbon consumption. The business has a Carbon Reduction Plan, this includes developing a Carbon Counting tool to allow the measure of Carbon and to allow selection of treatments on what will use the least amount of Carbon. The business is aware of its obligations as an emitter of CO2 and the need to reduce consumption and protect the environment. The carbon counting tool will allow the selection of treatments, processes, and vehicles to minimise Carbon consumption. We understand that minimising carbon also reduces cost.

Calculated using 2024 DEFRA conversion factors.

The Local government reorganisation of our main shareholder provided the opportunity of works outside of the highways budget. NY Highways Ltd undertook works on behalf of bereavement services, parking services, Highway Developments Services and Property. NY Highways Ltd also undertook streetscape works and NY NET. There are no research and development activities to report of currently. There are no branches of the organisation operating outside the UK.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2025.

The principal activity of the business is the provision of highway maintenance including the provision of winter maintenance activities, and fleet management and maintenance activities predominantly for and on behalf of North Yorkshire Council. This is supplemented by a level of external works delivering the same service to the commercial sector.

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

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

The strategic report or the year ended 31 March 2025 contains details of the company’s strategy, business environment, business performance, future developments and principal risks and uncertainties.

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.

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;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; 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.

We have audited the financial statements of NY Highways Limited (the 'company') for the year ended 31 March 2025 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 March 2025 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

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:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the 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.

• the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the directors' report and from the requirement to prepare a strategic report.

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.

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.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the trade;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;

• investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• reading the minutes of meetings of those charged with governance;

• enquiring of management as to actual and potential litigation and claims; and

• discussions with senior management regarding relevant regulations and reviewing the Group's legal and professional fees.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

NY Highways Limited is a private company limited by shares incorporated in England and Wales. The registered office is County Hall, Racecourse Lane, Northallerton, DL7 8AD.

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.

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.

The company has made a profit after tax of £256,122 (2024: £199,062), and has net liabilities of £801,940 (2024: £1,790,062), which includes actuarial gains on the defined benefit pension plan in the year of £732,000 (2024: £1,023,000). There is a guarantee in place from North Yorkshire Council for the pension provision of £nil (2024: £881,000).

EBITDA for the year amounts to £2,598,232 (2024: £2,572,616).

The directors have prepared budgets and forecasts and consider that the company will continue to operate within its loan facility for at least 12 months from the date of signing the Balance Sheet. The company has also received a letter of support from North Yorkshire Council stating that it will continue to support the company until at least 31 March 2027.

NY Highways Limited's primary operational objective is to provide services to North Yorkshire Council and therefore large profits are not expected.

With the continued support of the parent entity, the directors believe the company has adequate resources to continue in operational existence for the foreseeable future and thus the directors continue to adopt the going concern basis of accounting for the financial statements.

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.

Revenue for the provision of professional services is recognised when the costs incurred for labour and materials can be estimated reliably. Where the costs cannot be estimated reliably, revenue is recognised only to the extent of the expenses being probable that they will be recovered. This exercise is carried out on a monthly basis.

The majority of the turnover is in relation to work conducted on behalf of North Yorkshire Council, of which, NY Highways Limited is a wholly owned subsidiary. The company has a service level agreement with North Yorkshire Council, and invoices for work done on a cost incurred basis, and not on a fixed contract basis.

Due to the nature of the income, there are no long term revenue contracts.

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:

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.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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.

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.

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.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, 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.

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.

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.

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, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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.

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

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.

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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 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.

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.

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

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

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

The net defined benefit pension liability in the balance sheet comprises the total for the plan of the present value of the defined benefit obligation, less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The pension liability is calculated using assumptions on the discount rate, increases in inflation, salaries, pension and mortality. The discount rate used is determined by reference to market yields on high quality corporate bonds. The rates of inflation, salaries, pension and mortality are detailed in note 12.

The accruals in the balance sheet comprise of cost accruals, and work in progress accruals. Accruals are accounted for in the year that the costs or activities have taken place and are released then the monies for such accruals have been paid or received.

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

Their aggregate remuneration comprised:

There is no tax charge in the year due to losses brought forward being utilised in the year.

Included within prepayments and accrued income is £1,680,385 (2024: £2,112,054) with respect to group entities.

Included within accruals and deferred income is £4,357,725 (2024: £3,210,970) with respect to group entities.

The loan is unsecured.

The interest rate on the loan is 6.5% over base and the loan matures on 1 September 2030.

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

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 amount owed at the year end was £64,512 (2024: £59,473).

Fifty One employees are members of a defined benefit pension scheme, the Local Government Pension Scheme, administered by North Yorkshire Council.

Assumed life expectations on retirement at age 65:

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

The actual gain on plan assets was £324,000 (2024 - £1,187,000)

Other reserves represents the defined benefit pension scheme.

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:

Amounts contracted for but not provided in the financial statements:

During the year the company entered into the following transactions with related parties:

During the year there were purchases made from Yorwaste Limited totalling £134,483 (2024: £106,252), a subsidiary of NY Highways parent Company, North Yorkshire Council. There was £5,081 (2024: £3,033) owed to Yorwaste Limited at the year end.

During the year there were purchases made from Veritau Limited totalling £11,140 (2024: £nil), which is 50% owed by NY Highways parent Company, North Yorkshire Council. There was £7,104 (2024: £nil) owed to Veritau Limited at the year end.

During the year there were purchases made from DMSQD Limited totalling £9,975 (2024: £nil), a company with common directorship. There was no balance owed to DMSQD Limited at the year end.

Advantage has been taken of the exemption in FRS102 from disclosing transactions with other members of the group wholly owned by North Yorkshire County Council, as the figures will be included in the consolidated accounts.

The North Yorkshire Council (formerly North Yorkshire County Council), County Hall, Northallerton, North Yorkshire DL7 8AD owned 100% of the shares in the company throughout the current period.