Registration number:
North Somerset Environment Company Limited
for the Year Ended 31 March 2025
Registration number:
North Somerset Environment Company Limited
for the Year Ended 31 March 2025
North Somerset Environment Company Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Statement of Comprehensive Income |
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Statement of Financial Position |
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Statement of Changes in Equity |
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Statement of Cash Flows |
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Notes to the Financial Statements |
North Somerset Environment Company Limited
Company Information
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Directors |
D J Knight S Jellings C C Butters S E Turner B S Menzies |
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Registered office |
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Auditors |
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North Somerset Environment Company Limited
Strategic Report for the Year Ended 31 March 2025
The directors present their strategic report for the year ended 31 March 2025.
Fair review of the business
The company has completed its fourth year of trading to 31 March 2025 and is currently into the one-year extension to its contract with North Somerset Council to provide waste and recycling services. The company is owned by North Somerset Council who are the core client however the company has continued its expanding focus on private sector commercial contracts. During the first three-years of trading significant investment was made in establishing the business but due to cost pressure factors in 2024/25 it has shown a negative return of £547,413.
Principal risks and uncertainties
Several strategic principal risks and uncertainties remain because of the inherent nature of the business. However, as we provide statutory services to the Council, so this significantly mitigates the core contract risk. Other risks include:
a. Excessive costs of maintaining assets included aged vehicle, fixed plant equipment and upkeep of Westlands site have negatively affected budgetary performance further in 2024/25. The decision to support the financial position of the Shareholder and delay the fleet renewal program by 12 months resulted in overspends of £471k on hired-in fleet, and £149k in increased costs of maintaining aged failing fleet. This is expected to continue during Q1 of 2025/26 until such time as vehicles are renewed or replaced.
b. MTFP delivery. Further financial pressures experienced by the Shareholder have resulted in a continued contractual efficiency deduction being made from the main contract price. Contract inflation against the mechanism resulted in efficiency savings of £502k generated in-year, with NSEC being requested to further contribute to cost savings and reviews of resources against contract services.
c. National living wage rose by £1.02 in April 2024, which affected pay rates of 50% of labour workforce. Following settlement, increased payroll costs of £840k were only mitigated by £362k of contract inflation leaving a £478k payroll challenge during this and future years.
d. Local Government funding and any budget measures implemented which affect the company financial performance. However, North Somerset Council underwrite any legislative change and decide on any provision of deficit in their accounts.
The company maintains a live risk-register which is reviewed monthly by the board of directors and any emerging or increasing risks reported to its Shareholder Board.
Operationally, it prioritises the safety of its colleagues and others, and health and safety performance has been to the satisfaction of the board over the period, including compliance with the excellent health of its fleet operators licence, and environmental permits.
North Somerset Environment Company Limited
Strategic Report for the Year Ended 31 March 2025 (continued)
Financial key performance indicators
The main financial indication is the 2024/25 performance which resulted in a £547,413 loss being generated. The main pressure resulted from the core contract commenced in 2021/22 which turned over £15.65m revenue generating a loss of £1.21m (-8% return), most of which was incurred, unbudgeted, on fleet costs (£620k) and payroll inflation (£478k).
Positively, both new contracts implemented for North Somerset Council in 2024 have returned surpluses back into the business to mitigate the deficit. This gives the business confidence that it was successfully, bid, mobilise, and operate new contracts, and provide value by generating commercial and growth opportunities from these awards.
In March 2024, NSEC commenced a seven-year contract to manage and operate the Council’s waste transfer station handling and hauling residual and other wastes collected by NSEC on behalf of the Authority. This contract has benefited from NSEC drawing in third-party input into the transfer station commercially, which is benefiting both NSEC and NSC from royalty payments. Within its first full year term the contract turned over £2.16m delivering a 17% return of £360k. The surplus was fully netted off the deficit position without making any investments.
In April 2024, NSEC commenced another seven-year contract operating the Cyclical and Reactive Maintenance Contract covering Winter Maintenance, Gulley Cleansing, Pothole repairs, Drain and Kerb repairs, 24/7 Emergency Callouts, and other associated works including minor civil schemes. This also performed above expectations returning a 11% or £315k against a turnover of £2.79m.
Due to the trading year performance, the board of directors were neutral to the financial performance of the business but were satisfied as to understanding the reasons for the deficit position.
The year-end performance on cashflow and balance sheet, debtors and creditors were to the satisfaction of the board of directors. There has also been no borrowing required during the period.
North Somerset Environment Company Limited
Strategic Report for the Year Ended 31 March 2025 (continued)
Future developments and outcomes
Due to 2024/25 trading and expected continuation of pressures into 2025/26 the position is sustained as the fleet renewal program is not expected to complete until Q2 2025/26, hence overspends against budgets are expected to continue against fleet hires and fleet repairs and maintenance.
The company is engaging a recovery plan to ensure that it can reduce deficit in the next financial year. This plan focusses on several measures inclusive of the following and plans to achieve at least a £600k reduction against 2024/25 costs:
a. Reduction in vehicle hire, and R&M costs resulting from new fleet.
b. Reduction of plant repair costs
c. Re-procurement of uniform and PPE, and tyre contracts
d. Fuel efficiency savings from new telematics system.
e. ICT and Payroll provision provider change
f. Budget reduction for training & development
g. Capitalisation of some longer-term hire equipment
h. Increase headcount on pool cover to reduce agency spend.
Due to the expiring initial term of the contract, NSEC and NSC shall be re-negotiating contract pricing and arrangements during 2025/26 to ensure upon latest expiry on 27th March 2027 there is a true-up of actual costs being incurred including current payroll challenges. Such matters as the recent overspend on fleet hire and repair and maintenance are exceptional one-off costs which have been incurred because of supporting the Shareholder with its capital program spend.
As its Shareholder, NSC consider a cumulative deficit of £1m to be material and therefore will hold a provision it its accounts if this is reached. As this was not reached in 2024/25 no provision has been currently made.
The company have continued to deliver significant benefit to North Somerset Council through cost-saving measures generated at the outset of the contract. NSEC remain committed to the growth opportunities outlined in the five-year shareholder agreed business plan.
Growth through tendering and winning new Contracts to deliver further frontline Council Services for North Somerset or other Local Authorities is a key business priority in 2024, NSEC bid, mobilised, and operated two new contracts for the Shareholder turning over £4.95m which included commercial growth.
The company has been asked to bid for a Street Scene and Parks Contract due to commence in April 2027. There is a fantastic opportunity to harness the synergies, management experience and client relationships that already exist with our current operations and the requirements to deliver this service.
It has also identified a pipeline of internal opportunities which includes another three Service contracts which become available during the financial years 2026/27 and 2027/28.
Continued development of the company’s plans to grow its commercial activity to generate income and profitability, will support both debt recovery and asset investment. This includes key services as described in the business plan including:
a. Commercial recycling & waste collection and management services offered to businesses.
b. Providing practical and classroom-based driver training activities internally and externally.
c. Repair and maintenance of third-party commercial vehicles
d. Providing event management solutions e.g. waste and traffic management to event organisers
The Companies Business Plan has been developed to provide the necessary assurance to our Shareholder, North Somerset Council, that whilst ambitious, it remains deliverable. All the objectives are designed to harness existing available resource, premises, and equipment, therefore minimising the Capital Investment requirement during the Start-up phase of operational development.
Our biggest success story is the Driver Academy created to initially meet our internal needs and mitigate the National shortage of HGV drivers. To date forty-five new Class 2 HGV drivers have qualified through our sponsored programme representing some 40% of our frontline drivers. This has been supported by commercial income developed through providing training services for the emergency services, utilities, and waste collection sectors. Turnover achieved was £55k in 2024/25 and is expected to significantly increase in 2025/26, alongside rapid growth in our commercial waste collection service.
During the year, a nationally recognised business, grown and developed within North Somerset signed terms for a three-year period, to delivery recycling and waste collection services, and material brokerage. This contract gives the springboard platform to further develop and market its commercial offerings.
The board of directors focus for 2025/26 includes delivery of a major service change project for recycling and waste collections, completion of the fleet renewal program, and supporting the progress of the depot strategy project with Shareholder.
North Somerset Environment Company Limited
Strategic Report for the Year Ended 31 March 2025 (continued)
Future developments and outcomes
Due to 2024/25 trading and expected continuation of pressures into 2025/26 the position is sustained as the fleet renewal program is not expected to complete until Q2 2025/26, hence overspends against budgets are expected to continue against fleet hires and fleet repairs and maintenance.
The company is engaging a recovery plan to ensure that it can reduce deficit in the next financial year. This plan focusses on several measures inclusive of the following and plans to achieve at least a £600k reduction against 2024/25 costs:
a. Reduction in vehicle hire, and R&M costs resulting from new fleet.
b. Reduction of plant repair costs
c. Re-procurement of uniform and PPE, and tyre contracts
d. Fuel efficiency savings from new telematics system.
e. ICT and Payroll provision provider change
f. Budget reduction for training & development
g. Capitalisation of some longer-term hire equipment
h. Increase headcount on pool cover to reduce agency spend.
Due to the expiring initial term of the contract, NSEC and NSC shall be re-negotiating contract pricing and arrangements during 2025/26 to ensure upon latest expiry on 27th March 2027 there is a true-up of actual costs being incurred including current payroll challenges. Such matters as the recent overspend on fleet hire and repair and maintenance are exceptional one-off costs which have been incurred because of supporting the Shareholder with its capital program spend.
As its Shareholder, NSC consider a cumulative deficit of £1m to be material and therefore will hold a provision it its accounts if this is reached. As this was not reached in 2024/25 no provision has been currently made.
The company have continued to deliver significant benefit to North Somerset Council through cost-saving measures generated at the outset of the contract. NSEC remain committed to the growth opportunities outlined in the five-year shareholder agreed business plan.
Growth through tendering and winning new Contracts to deliver further frontline Council Services for North Somerset or other Local Authorities is a key business priority in 2024, NSEC bid, mobilised, and operated two new contracts for the Shareholder turning over £4.95m which included commercial growth.
The company has been asked to bid for a Street Scene and Parks Contract due to commence in April 2027. There is a fantastic opportunity to harness the synergies, management experience and client relationships that already exist with our current operations and the requirements to deliver this service.
It has also identified a pipeline of internal opportunities which includes another three Service contracts which become available during the financial years 2026/27 and 2027/28.
Continued development of the company’s plans to grow its commercial activity to generate income and profitability, will support both debt recovery and asset investment. This includes key services as described in the business plan including:
a. Commercial recycling & waste collection and management services offered to businesses.
b. Providing practical and classroom-based driver training activities internally and externally.
c. Repair and maintenance of third-party commercial vehicles
d. Providing event management solutions e.g. waste and traffic management to event organisers
The Companies Business Plan has been developed to provide the necessary assurance to our Shareholder, North Somerset Council, that whilst ambitious, it remains deliverable. All the objectives are designed to harness existing available resource, premises, and equipment, therefore minimising the Capital Investment requirement during the Start-up phase of operational development.
Our biggest success story is the Driver Academy created to initially meet our internal needs and mitigate the National shortage of HGV drivers. To date forty-five new Class 2 HGV drivers have qualified through our sponsored programme representing some 40% of our frontline drivers. This has been supported by commercial income developed through providing training services for the emergency services, utilities, and waste collection sectors. Turnover achieved was £55k in 2024/25 and is expected to significantly increase in 2025/26, alongside rapid growth in our commercial waste collection service.
During the year, a nationally recognised business, grown and developed within North Somerset signed terms for a three-year period, to delivery recycling and waste collection services, and material brokerage. This contract gives the springboard platform to further develop and market its commercial offerings.
The board of directors focus for 2025/26 includes delivery of a major service change project for recycling and waste collections, completion of the fleet renewal program, and supporting the progress of the depot strategy project with Shareholder.
North Somerset Environment Company Limited
Strategic Report for the Year Ended 31 March 2025 (continued)
Approval
Directors have complied with all relevant requirements under the Companies Act 2006 and related financial regulations and there are no breaches or non-compliances to report. The company remains in good repute with regulators in relation to its operational licences and permits that are critical to service delivery.
The directors will continue to review cash and access to short-term borrowing facilities to monitor:
a. Debts as they fall due, to make sure they are paid in a timely manner, the main contract is from North Somerset Council so remains secure.
b. Ability to meet current liabilities, ensure cost reviews are undertaken to ensure best costs are being delivered, liabilities are being paid within terms to keep NSEC cashflow in a positive position.
c. Borrowing facilities for future capital expenditure subject to shareholders approval through North Somerset Council.
d. Review cost controls, strategic fleet procurement and initiate commercial trading, whilst striving to exceed the Deficit Recovery Plan agreed with North Somerset Council.
The directors received written confirmation from its only shareholder North Somerset Council that they will continue to support NSEC to ensure it meets it liabilities and continues to be a going concern for the foreseeable future. Following on from this the board of directors believe the company to be a going concern, with the financial statements prepared on that basis.
Approved and authorised by the
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North Somerset Environment Company Limited
Directors' Report for the Year Ended 31 March 2025
The directors present their report and the financial statements for the year ended 31 March 2025.
Directors of the company
The directors who held office during the year were as follows:
The following director was appointed after the year end:
Dividends
The directors do not recommend the payment of a dividend.
Information included in the Strategic Report
In accordance with section 414C of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, those disclosures required to be given in the directors' report by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 are given in the strategic report.
Auditor
Approved and authorised by the
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Approved and authorised by the
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North Somerset Environment Company Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
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state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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.
North Somerset Environment Company Limited
Independent Auditor's Report to the Members of North Somerset Environment Company Limited
Opinion
We have audited the financial statements of North Somerset Environment Company Limited (the 'company') for the year ended 31 March 2025, which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of 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 loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
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 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 director's 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 original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
North Somerset Environment Company Limited
Independent Auditor's Report to the Members of North Somerset Environment Company Limited (continued)
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 8], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
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We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors. We communicated identified laws and regulations throughout our team, and remained alert to any indications of non-compliance throughout the audit. |
North Somerset Environment Company Limited
Independent Auditor's Report to the Members of North Somerset Environment Company Limited (continued)
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The company is subject to laws and regulations that govern the preparation of the financial statements, including financial reporting legislation, and other companies legislation. The company is also subject to other laws and regulations where the consequences of non-compliance could have a material impact on the amounts or disclosures within the financial statements including health and safety laws and regulations such as the Health and Safety at Work Act, environmental laws such as the Environmental Protection Act, employment laws and regulations and certain aspects of companies legislation. |
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Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. In any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. |
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
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Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. |
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. |
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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. |
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Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. |
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Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
North Somerset Environment Company Limited
Independent Auditor's Report to the Members of North Somerset Environment Company Limited (continued)
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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For and on behalf of
38 Walliscote Road
Weston-super-Mare
Somerset
BS23 1LP
North Somerset Environment Company Limited
Statement of Comprehensive Income for the Year Ended 31 March 2025
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Note |
2025 |
2024 |
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Turnover |
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|
|
|
Cost of sales |
( |
( |
|
|
Gross profit |
|
|
|
|
Distribution costs |
( |
( |
|
|
Administrative expenses |
( |
( |
|
|
Operating (loss)/profit |
(547,409) |
303,105 |
|
|
(Loss)/profit before tax |
( |
|
|
|
(Loss)/profit for the financial year |
( |
|
The above results were derived from continuing operations.
The company has no recognised gains or losses for the year other than the results above.
North Somerset Environment Company Limited
(Registration number: 12973716)
Statement of Financial Position as at 31 March 2025
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Note |
2025 |
2024 |
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Fixed assets |
|||
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Tangible assets |
|
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Current assets |
|||
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Stocks |
|
|
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Debtors |
|
|
|
|
Cash at bank and in hand |
|
|
|
|
|
|
||
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Creditors: Amounts falling due within one year |
( |
( |
|
|
Net current liabilities |
( |
( |
|
|
Net liabilities |
( |
( |
|
|
Capital and reserves |
|||
|
Called up share capital |
1 |
1 |
|
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Profit and loss account |
(846,443) |
(299,034) |
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Shareholders' deficit |
(846,442) |
(299,033) |
Approved and authorised by the
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North Somerset Environment Company Limited
Statement of Changes in Equity for the Year Ended 31 March 2025
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Share capital |
Profit and loss account |
Total |
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|
At 1 April 2024 |
|
( |
( |
|
Loss for the year |
- |
( |
( |
|
At 31 March 2025 |
|
( |
( |
|
Share capital |
Profit and loss account |
Total |
|
|
At 1 April 2023 |
|
( |
( |
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Profit for the year |
- |
|
|
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At 31 March 2024 |
1 |
(299,034) |
(299,033) |
North Somerset Environment Company Limited
Statement of Cash Flows for the Year Ended 31 March 2025
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Note |
2025 |
2024 |
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Cash flows from operating activities |
|||
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(Loss)/profit for the year |
( |
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Adjustments to cash flows from non-cash items |
|||
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Depreciation and amortisation |
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( |
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Working capital adjustments |
|||
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Increase in stocks |
( |
( |
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Increase in debtors |
( |
( |
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Increase in creditors |
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Net cash flow from operating activities |
( |
( |
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Cash flows from investing activities |
|||
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Acquisitions of tangible assets |
( |
( |
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Net decrease in cash and cash equivalents |
( |
( |
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Cash and cash equivalents at 1 April |
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Cash and cash equivalents at 31 March |
1,228,209 |
1,683,191 |
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North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
Principal activity
The principal activity of the company is of the collection of waste and other waste management services.
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
The financial statements are prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measure at fair value through profit or loss.
The financial statements are prepared in sterling which is the functional currency of the entity.
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
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Accounting policies (continued) |
Going concern
The financial statements have been prepared on a going concern basis.
The directors monitor the availability of cash and access to short-term borrowing facilities, including:
- Debts as they fall due, to make sure they are paid in a timely manner, the main contract is from North Somerset Council so remains secure.
- Ability to meet current liabilities, ensure cost reviews are undertaken to ensure best costs are being delivered, liabilities are being paid within terms to keep NSEC cashflow in a positive position.
- Borrowing facilities for future capital expenditure subject to shareholders approval through North Somerset Council.
- Review cost controls, strategic fleet procurement and initiate commercial trading, whilst striving to exceed the Deficit Recovery Plan agreed with North Somerset Council.
Careful attention will be paid to key judgements and assumptions used in the preparation of the forecasts to ensure that they are reasonable and supportable.
The directors have also obtained written confirmation from North Somerset Council that they will continue to provide support to the company, to enable it to meet its liabilities and continue as a going concern for the foreseeable future. As such, the board of directors believe the company to be a going concern, and have prepared the financial statements on that basis, however, the directors acknowledge that, as in all cases where a company relies on the support of shareholders, there can be no guarantee that this will continue.
Judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell.
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
2 |
Accounting policies (continued) |
Key sources of estimation uncertainty
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Depreciation is based on the estimated useful life of the relevant asset.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
|
Asset class |
Depreciation method and rate |
|
Long leasehold improvements |
3 year straight line basis, unless above £15,000 then 5 year. |
|
Plant and machinery |
3 year straight line basis, unless above £15,000 then 5 year. |
|
Fixtures and fittings |
3 year straight line basis, unless above £15,000 then 5 year. |
|
Motor vehicles |
3 year straight line basis, unless above £15,000 then 5 year. |
|
Equipment |
3 year straight line basis, unless above £15,000 then 5 year. |
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
2 |
Accounting policies (continued) |
Impairment
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.
For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
|
Asset class |
Amortisation method and rate |
|
Intangible fixed assets |
Over 3 years |
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. In the statement of financial position, bank overdrafts are shown within borrowing or current liabilities
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Costs include all costs of purchase, costs of conversion and other costs incurred in bringing the stocks to their present location and condition.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
2 |
Accounting policies (continued) |
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
Financial instruments
Recognition and measurement
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Debt instruments are subsequently measured at amortised cost.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.
|
Turnover |
The analysis of the company's turnover for the year from continuing operations is as follows:
|
2025 |
2024 |
|
|
Sale of goods |
|
|
|
Contract income |
|
|
|
|
|
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
Operating (loss)/profit |
Arrived at after charging/(crediting)
|
2025 |
2024 |
|
|
Depreciation expense |
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2025 |
2024 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
|
2025 |
2024 |
|
|
Production |
|
|
|
Administration and support |
|
|
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2025 |
2024 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
257,509 |
191,422 |
|
Auditors' remuneration |
|
2025 |
2024 |
|
|
Audit of the financial statements |
|
|
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
Taxation |
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2024 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2025 |
2024 |
|
|
(Loss)/profit before tax |
( |
|
|
Corporation tax at standard rate |
( |
|
|
Tax decrease from effect of capital allowances and depreciation |
- |
( |
|
Effect of tax losses |
|
( |
|
Total tax charge/(credit) |
- |
- |
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
Tangible assets |
|
Long leasehold improvements |
Fixtures and fittings |
Plant and machinery |
Equipment |
Motor vehicles |
Total |
|
|
Cost or valuation |
||||||
|
At 1 April 2024 |
|
|
|
|
|
|
|
Additions |
|
- |
|
|
- |
|
|
At 31 March 2025 |
|
|
|
|
|
|
|
Depreciation |
||||||
|
At 1 April 2024 |
|
|
|
|
|
|
|
Charge for the year |
|
|
|
|
|
|
|
At 31 March 2025 |
|
|
|
|
|
|
|
Carrying amount |
||||||
|
At 31 March 2025 |
|
|
|
|
|
|
|
At 31 March 2024 |
|
|
|
|
|
|
|
Stocks |
|
2025 |
2024 |
|
|
Raw materials and consumables |
|
|
|
Debtors |
|
Current |
Note |
2025 |
2024 |
|
Trade debtors |
|
|
|
|
Amounts owed by related parties |
|
|
|
|
Other debtors |
- |
|
|
|
Called up share capital not paid |
|
|
|
|
Prepayments |
|
|
|
|
Accrued income |
|
|
|
|
|
|
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
Creditors |
|
Note |
2025 |
2024 |
|
|
Due within one year |
|||
|
Trade creditors |
|
|
|
|
Amounts due to related parties |
|
|
|
|
Social security and other taxes |
|
|
|
|
Credit card account |
|
|
|
|
Accruals |
|
|
|
|
|
|
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
Share capital |
Allotted, called up and not fully paid shares
|
2025 |
2024 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
1 |
|
1 |
The single share provides the right to receive notice of, attend and vote at general meetings. The share also provides the right to participate in a distribution of profits by way of dividend and to fully participate in any distribution of capital on sale or wind up of the company.
|
Reserves |
Profit and loss account
This reserve records retained earnings and accumulated losses.
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
Obligations under leases and hire purchase contracts |
Operating leases
The total of future minimum lease payments is as follows:
|
2025 |
2024 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
|
Analysis of changes in net debt |
|
At 1 April 2024 |
Financing cash flows |
At 31 March 2025 |
|
|
Cash and cash equivalents |
|||
|
Cash |
1,683,191 |
(454,982) |
1,228,209 |
|
Borrowings |
|||
|
Long term borrowings |
(3,291,641) |
1,526,043 |
(1,765,598) |
|
( |
|
( |
|
|
|
|||
Included in short term borrowings is debt payable of £1,765,598 (2024: £3,291,641) to North Somerset Council.
North Somerset Environment Company Limited
Notes to the Financial Statements for the Year Ended 31 March 2025 (continued)
|
Related party transactions |
The Company are wholly owned by North Somerset Council (NSC). In the year there were transactions with North Somerset Council.
The net value of income invoiced to NSC was as follows:
• Contract income - £13,421,316 (2024: £11,374,717)
• Highway income - £1,749,104 (2024: £nil)
• Reimbursment of material disposal costs - £660,677 (2024: £612,866)
• Assets purchased recharged to NSC - £6,252 (2024: £2,154,525)
• Bin purchases recovery - £379,571 (2024: £266,367)
• Clinical collections - £216,227 (2024: £224,817)
• Other - £988,940 (2024: £186,649)
• Total = £17,422,087 (2024: £14,819,941)
The net value of expenses invoiced to NSC were as follows:
• Payroll - £8,297,762 (2024: £7,297,039)
• Reimbursment of materials sales - £2,101,676 (2024: £1,908,796)
• Premises Rent - £213,696 (2024: £226,837)
• Fixed asset purchases - £3,754 (2024: £3,919)
• Other - 965,222 (2024: £425,103)
• Total = £11,582,110 (2024: £9,861,694)
At the year-end the outstanding balances between the Company and NSC were as follows.
Amounts owing to NSC:
• Amounts owed by the Company to NSC - £2,565,594 (2024: £2,676,086)
• Assets owed by the Company to NSC - £nil (2024: £615,555)
Amounts owed by NSC:
• Amounts owed to the Company by NSC - Other - £1,762,392 (2024: £1,014,400)
• Asset recharges owed to the Company by NSC - £3,206 (2024: £140,363)
Accrued balances at the year-end with NSC were as follows:
• Accruals from NSC - £481,402 (2024: £471,527)
• Accrued income for NSC - £342,154 (2024: £455,670)