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

East Suffolk Services Ltd (ESSL) was established in 2022, to enable East Suffolk Council (ESC) to bring their frontline operations into a space that supports their corporate ambitions. East Suffolk Services Ltd commenced trading on the 1 July 2023. ESSL has the remit to increase commercial activity in order to support the overall cost of ESC’s statutory frontline operations services, whilst contributing to the local economy.

The services covered by ESSL are:

•    Recycling & Waste

•    Grounds Maintenance

•    Street Cleansing

•    Facilities Management

•    Building Cleaning

•    Parking Enforcement

•    CCTV / Out of Hours

•    Workshops, including commercial MOTs

•    Bereavement Services

Our shareholder has taken the decision to cease the Home Alarms service during 2025-2026. The financial impact has an immaterial effect on our financial accounts.

ESSL exhibits a commercial focus towards quality and cost of services. While also caring about our staff and their wellbeing, creating a community where people are valued and can thrive, and making ESSL an employer of choice.

ESSL’s values are Trust, Unity, Pride and Environment.

2025 onwards is an exciting time for East Suffolk Services Ltd. We have created a solid foundation over the last two years and we will use that stability to launch ourselves into up-and-coming opportunities. We want to concentrate on our customer experience being the best it can be, from proactive communication to excellent services being delivered in our communities. Our people are our biggest asset, and we are so proud of them. So, in 2025-2026 we will focus on rolling out the actions from our People and Wellbeing strategies and continue the superb work of improving our already great safety culture. ESSL is about continuous improvement. We are committed to never resting on our laurels and constantly and consistently pushing to make things better for our workforce and our customers. With Devolution and Local Government Reorganisation on the horizon, we will ensure we are in the best possible place to continue to provide excellent services, that people need, and are value for money.

ESSL has a strict risk management process in place that allows future risks to be scanned and mitigated to appropriate levels in line with an agreed risk appetite.

One of the external risks facing ESSL is Local Government Review (LGR). This initiative aims to overhaul local governance structures, enhance service delivery, and address financial challenges faced by councils. As ESC own ESSL, this overhaul of local governance creates a risk to the ownership structure and operational delivery models of ESSL.

ESC has formally backed a proposal for multiple unitary authorities. This was part of a collective approach alongside Babergh and Mid Suffolk District Councils, Ipswich, and West Suffolk councils, who all submitted a joint interim proposal to the government. New unitary authorities are due to be established by 2028.

Whatever new unitary authorities are created it will lead to a change in ownership of ESSL, as ESC will no longer exist as it does today. Depending on the results of the final structures, ESSL may find that the existing depots are located in separate unitary authorities, with the potential that ESSL may need to be split North and South.

These proposed changes do allow for an opportunity. Prior to the implementation of a new unitary authority, ESSL will continue to develop and enhance current income streams. This then ensures ESSL are presented as a significant asset to any discussions about LGR.

Following legislative changes to the Environment Act, ESC must adopt new waste delivery models as well as introducing a weekly food waste collection for all domestic properties within the East Suffolk district. This extensive change requires the whole waste department to be redesigned. With any large-scale service redesign there are risks to success, however the opportunities to improve the service for all East Suffolk residents and businesses, by being more effective and efficient as well as delivering value for money will all be incorporated into the delivery of the programme. The change itself requires expansion of existing depot spaces to accommodate the required additional vehicles and staff. This presents an opportunity to develop current spaces into modern fit for purpose depots, or alternatively wholescale moves to a new site where development time is reduced or eradicated completely.

Having the development of Sizewell C in the East Suffolk district comes with risks to ESSL. The development of the site will place a significant demand during construction for particular skill sets.  It is likely that these people will be recruited from areas local to Sizewell, areas where ESSL would also look to recruit from. Although the demand for these roles will not be permanent, with the construction of Sizewell C likely to take place over a sustained number of years, it may be seen as a long-term career opportunity. 

The work that ESSL have done already to become an “employer of choice” locally will assist in mitigating this risk. Annual pay reviews ensuring staff are correctly remunerated in line with market rates, permanent contracts, better terms and conditions, and enhanced pension packages are likely to be more attractive than private sector contracts.

ESSL are committed to imbedding our continuous improvement culture. We do this via the implementation of our strategies, during this period three strategies have been launched, as follows:

People

The purpose of this strategy is to set clear direction in relation to the continuous improvement of how we recruit, retain, train and engage with our people across ESSL. This strategy has been set over the next two years, to allow agility with ESSL’s business planning and organisational developments. Fundamentally, this strategy clearly demonstrates ESSL’s commitment towards putting people first, looking after people personally as well as professionally, and developing an open and trustworthy culture for all.

Wellbeing

The primary purpose of this strategy is to embed wellbeing into the core of our organisational practices, ensuring that every employee feels valued, supported, and empowered to perform at their best. By prioritising wellbeing, we aim to increase psychological safety, develop company culture, enhance job satisfaction, and build a resilient workforce capable of adapting to change.

Safety

The purpose of this strategy is to set a clear direction in relation to the continuous improvement of Health and Safety across ESSL. This strategy will run from 2024-2026, a two-year timescale was chosen to allow agility with ESSL’s business planning and organisational developments. Fundamentally, this strategy clearly demonstrates ESSL’s commitment towards improving health, safety, and wellbeing and to promote a continued positive health and safety culture for all.

2024/25 is the first full trading year with the company commencing trading in July 2023. The full year has given clarity in understanding what each service costs. Revenues and pricing now reflect market rates, and costs are efficiently monitored to ensure value for money. This has resulted in the Gross Profit improving from 10% to 16%.

The 2024/25 final position is a £1.79m loss compared to a £1.99m loss in 2023/24. The EBITDA (Earnings Before Interest, Depreciation and Amortisation) position is a £548k profit compared to a £570k loss in 23/24, a vastly improved trading performance. The favorable £1m swing in EBITDA demonstrates the hard work completed to ensure a full understanding of the costs and revenues of each service. This in turn has improved cash flow to give ESSL the ability to grow and commercially leverage the skills and expertise that underpin the services we provide.

The net loss position reflects the large capital investment ESSL required as it took over the services from the previous contract. The company will look to reduce the loss through commercial growth, bringing economies of scale and therefore improving trading margins. We will continue to work with East Suffolk Council on capital forecasting, with a view to net profitability in the medium term.

We report to the stakeholders on financial performance monthly and through those reports are evaluating the support with short-, medium- and long-term financial strategies to ensure a stable balance sheet and growing cash position as the company matures from its current early stages.

ESSL monitors its performance against a number of different indicators, the themes of which are:

Financial Stability - ESSL ensures that robust financial controls are in place across the company, and that financial forecasting is in place to make informed decisions on growth opportunities.

Improving Customer Experience - ESSL record and monitor customer feedback, ensuring that all opportunities to understand the root cause for issues have been identified and long-term solutions are embedded.

Fit for Purpose Services - ESSL has developed an ambitious improvement plan that delivers improved efficiency across the services provided, alongside cost saving.

Attract, Retain and Develop the Best Staff - In order to retain the best staff, ESSL has developed a number of internal staff by putting them onto apprenticeships, as well as changing some internal positions into apprentice roles.

ESSL are committed to going above and beyond for our staff. This is more than being a good place to work, it is about being inclusive and everyone feeling safe and supported. As such, in 2024-2025 we have achieved / signed up to the following:

Anti-Racism Charter: UNISON’s Anti-Racism Charter is more than just a document with ideas on how to challenge workplace racial discrimination, it is constant commitment to transform employers into explicitly anti-racist institutions.

End Violence at Work Charter: For some years now, it has been recognised that violence towards people working in the community is a significant problem – and it is getting worse. Meeting the Charters standards will show the workforce and our stakeholders that we are serious about protecting our staff. Additionally, meeting the standards shows we are prepared to put in place measures that prevent people we are responsible for from being assaulted as they carry out their work.

Disability Confident: ESSL achieved Disability Confident Leader status, the highest level of this scheme. ESSL have demonstrated how we strive to be disability-inclusive and ensure that disabled colleagues feel they belong.

On behalf of the board

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

The principal activities of the company is that of facilities maintenance, management, transport and other services.

The results for the year are set out on page 12.

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 company operates a treasury function which is responsible for managing the liquidity, interest and credit risks associated with the company’s activities.

The company’s principal financial instruments include parent company loans, the main purpose of which is to raise finance for the company’s operations. In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.

The company forecasts cashflow to ensure adequate cover for its trading cash requirements. The company have net current liabilities of £4,002,857. East Suffolk Council will provide financial guarantees for at least 12 months from the date of the accounts.

The loan and lease agreements are on a fixed rate and therefore the risk to changes in interest rate is low.

East Suffolk Council are the 100% shareholder, with the main contract being more than 80% of trading. Therefore, the credit risk is very low. The company enforces a strict credit control policy to ensure customers are checked through a credit reference agency and payment terms enforced.

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

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

Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting company's performance.

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.

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

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.

Qualified opinion

We have audited the financial statements of East Suffolk Services Limited (the 'company') for the year ended 31 March 2025 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the effects of the matter described in the basis for qualified opinion sectopn of our report, 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 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 qualified opinion

The company participates in a defined benefit pension scheme. As disclosed in note 20 to the financial statements, the company was unable to estimate the valuation of the defined benefit pension position in the balance sheet as at 31 March 2025. This was due to the Scheme actuaries being unable to produce a reliable valuation as a result of insufficient information relating to a bulk transfer of staff on 1 July 2023 from another pension fund. Consequently, the company has accounted for its participation in the scheme as if it were a defined contribution pension scheme.

This accounting treatment is not in accordance with the requirements of FRS 101, which requires defined benefit obligations (or surpluses) to be measured using the projected unit credit method. Had the company accounted for the scheme in accordance with FRS 101, certain assets or liabilities and related disclosures may have been materially different. The same limitation in scope was present in the prior year ended 31 March 2024.

We were unable to obtain sufficient appropriate audit evidence regarding the valuation of the defined benefit pension position by alternative means.

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 qualified 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.

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the defined benefit obligation as at 31 March 2025. We have concluded that where the other information refers to the defined benefit obligation or related balances such as cost of sales and administration costs, they may be materially misstated for the same reason.

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.

Except for the matter described in the basis for qualified opinion section of our report, 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 directors' report.

Arising solely from the limitation on the scope of our work relating to defined pension scheme obligation, referred to above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

• we were unable to determine whether adequate accounting records have been kept.

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:

• 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.

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.

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.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have given consideration to the control environment (including management's own process for identifying and assessing risks) as well as the nature of the entity, the industry in which it operates and the underlying performance. Consideration was also given to the attitudes and incentives of management to commit fraud. We determined that the greatest potential for fraud existed in the following areas: timing of recognition of income, posting of unusual journals and complex transactions. In line with all audits performed under ISAs (UK), we planned and performed specific procedures to respond to the risk of management override of controls.

We also obtained an understanding of the applicable laws and regulations that the company has to abide by, through discussions with management and those charged with governance, as well as commercial knowledge of the sector and statutory legislation. We paid particular focus to those laws and regulations that had the potential to materially impact the amounts and disclosures within the financial statements. The key laws and regulations we identified were the UK Companies Act, employment law, health and safety, tax legislation and landlord regulations.

After our initial risk assessment, we performed the following procedures to detect material misstatements in respect of irregularities arising due to fraud or error:

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness

- Reviewing financial statement disclosures and testing these against supporting documentation to assess compliance with applicable laws and regulations

- Assessing accounting estimates within the financial statements in order to assess their reasonableness and determining whether there were any indications of management bias in the estimates.

- Reviewing minutes of meetings of those charged with governance

- Enquiring of management as to whether they are aware of any alleged, suspected or actual fraud during the year

We also performed procedures to satisfy ourselves regarding compliance with applicable laws and regulations, including:

- Enquiring of management, those charged with governance and the entity’s solicitors if there were any actual and potential litigation and claims

- Reviewing minutes of meetings of those charged with governance.

- Reviewing legal expenses for any indicators of litigation or claims against the company

All audit team members were made aware of the applicable laws and regulations, as well as potential fraud risks during the planning stage of the audit and this was discussed at the audit team planning meeting. It was therefore determined that team members all had the relevant awareness and competence to identify any instances of non-compliance with relevant laws and regulations or fraud.

There are, however, inherent limitations to our above audit procedures. Auditing standards only require us to enquire of the directors and management regarding non-compliance with laws and regulations, as well as review regulatory and legal correspondence (if there is any). It is therefore possible that instances of non-compliance could be missed, particularly where the law in itself is far removed from any financial transactions.

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.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

East Suffolk Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ground Floor West Wing, East Suffolk House, Riduna Park, Melton, Woodbridge, IP12 1RT. The principal place of business is Ufford Park Offices, Yarmouth Road, Woodbridge, IP13 6ET. The company's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

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.

As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS

• inclusion of an explicit and unreserved statement of compliance with IFRS;

• presentation of a statement of cash flows and related notes;

• disclosure of the objectives, policies and processes for managing capital;

• disclosure of key management personnel compensation;

• disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;

• comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment.

• disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;

• related party disclosures for transactions with the parent or wholly owned members of the group.

Where required, equivalent disclosures are given in the group accounts of East Suffolk Council. The group accounts of East Suffolk Council will be available to the public and when available can be obtained from East Suffolk House, Station Road, Melton, Woodbridge, Suffolk, United Kingdom, IP12 1RT.

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany 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 directors have considered the factors that impact the company’s future financial performance, cash flows and financial position, along with the company’s current liquidity in forming their conclusion on the applicability of the going concern basis.

As the company's current liabilities exceed its current assets the company is reliant upon the support of its parent undertaking. The parent undertaking has provided a formal letter of support to the company.

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.

The company carries out a range of facilities maintenance, management, transport and other services. For many of these services there is an agreed annual fee and revenue is recognised as the service is provided during the period.

Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost 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 recognised in the income statement.

At each reporting 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.

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.

Inventories are stated at cost and relate to fuel being used in the business or sold to customers.

Cash and cash equivalents 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.

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs. The company does not have any financial assets at fair value through the profit and loss account.

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Financial assets carried at amortised cost are assessed for indicators of impairment at each reporting end date.

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'. The company only has 'other financial liabilities'

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the 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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

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 inventories or non-current 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.

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

The company was unable to estimate the valuation of the defined benefit pension obligation in the balance sheet as at 31 March 2025 because a reliable valuation could not be produced by the Scheme actuaries due to insufficient information being available, relating to a bulk transfer in of staff from another Pension Fund on the employer’s date joined fund of 1 July 2023.

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

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently adjusted for remeasurements of the lease liability and applies the relevant cost model, fair value model or revaluation model as set out within the accounting policies for the applicable asset class. Where the cost model is applied, the asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, and is periodically reduced by impairment losses, if any.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is reassessed at each financial period end to reflect lease modifications and any changes to the factors considered at initial measurement, as set out above. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of less than 12 month, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

Investments

Current asset investments relate to a 181 day fixed term deposit account not regarded as a liquid asset. This is stated at cost which is the same as market value.

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, if the revision affects only that period, or in the period of the revision and future periods if 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 outlined below.

The arrangement to use fixed assets legally owned by East Suffolk Council (ESC) has been reviewed and judgement has been exercised to conclude that in substance this represents a lease as defined in IFRS 16 and therefore these assets have been capitalised in fixed assets as right of use assets with a corresponding right of use lease liability.

In addition judgements have been made in determining the appropriate discount rate to apply, when calculating the present value of the lease payments and has been determined to be 7.35%, the company's incremental cost of borrowing.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 1 (2024 - 1).

The charge for the year can be reconciled to the loss per the income statement as follows:

No deferred tax asset has been recognised in respect of tax losses amounting to £3,450,538 (2024:£1,969,401) as it is not considered probable that there will be future taxable profits available. In addition the deferred potential tax asset of £120,297 (2024:£75,416) on fixed asset and short term temporary differences calculated at a tax rate of 25% has not been provided as not viewed to recoverable.

Property, plant and equipment includes right-of-use assets, as follows:

The directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

The amount of inventories recognised as an expense during the period was £1,511,954 (2024 - £1,238,124)

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

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.

Defined benefit schemes

The company participates in the Local Government Pension Scheme (LGPS), which is a multi-employer defined benefit scheme, managed by Suffolk County Council.

The latest actuarial valuation of the LGPS related to the period ended 31 March 2022.

The LGPS is a funded defined benefit pension scheme, with the assets held in separate trustee-administered funds. The total contributions are as noted below. The agreed contribution rates for future years are 25% for employers and tiered % for employees.

The charge the profit and loss account during the period in respect of defined benefit schemes was £896,014: (2024:£748,237).

The parent company of East Suffolk Services Limited is East Suffolk Holdings Ltd and its registered office is Ground Floor West Wing East Suffolk House, Riduna Park, Station Road, Melton, Woodbridge, Suffolk, IP12 1RT.

The ultimate controlling party is East Suffolk Council, which is the of the largest and smallest group in which this company's results are consolidated. The group accounts of East Suffolk Council can be obtained from their registered office.