Company registration number 07053238 (England and Wales)
SIMS MILLING SERVICES LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2022
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
SIMS MILLING SERVICES LIMITED
CONTENTS
Page
Company information
1
Strategic report
2
Director's report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
SIMS MILLING SERVICES LIMITED
COMPANY INFORMATION
- 1 -
Director
G A Sims
Company number
07053238
Registered office
Burrows Farm
Brentwood Road
Bulphan
Essex
RM14 3TL
Auditor
TC Group
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
SIMS MILLING SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -

The director presents the strategic report for the year ended 31 December 2022.

Fair review of the business

The company continues to monitor and nurture relationships with its major customers and increase its profile and reputation within the industry. The company believes this will eventually provide an uplift in future revenue. The company continued to fund preparations for the future and further increase its capability to increase wealth for its shareholders.

Principal risks and uncertainties

The principal business risk faced by the company is the loss of customer-base and resulting income. This would occur as a result of a degradation of current business relationships in a competitive market. In response, the relationships continue to be nurtured and remain strong thereby reducing the risk of occurrence. The director has also sought a diverse portfolio of customers which serves to reduce the impact of a single failure. Additionally the director looks to identify new markets and customers to continue to reduce these risks further.

Development and performance

The company’s trading performance has been strong during the year with more projects in the pipeline.

 

 

Key performance indicators

The Key financial highlights are as follows :

Year
Year
Year
ended
ended
ended
31 December
31 December
31 December
2022
2021
2020
£
£
£
Turnover
13,321,111
13,878,073
13,419,066
Turnover (decline)/growth
(4.01)%
3.42%
(3.18)%
Gross profit margin
31.48%
31.97%
31.95%
Profit before tax
159,067
2,906,896
1,340,741

On behalf of the board

G A Sims
Director
29 September 2023
SIMS MILLING SERVICES LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

The director presents his annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company continued to be that of civil engineering including highway surface removal.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

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

G A Sims
Financial instruments

The company's principal financial instruments comprise bank balances, bank loans, trade creditors, loans with related parties, trade debtors, hire purchase agreements and finance leases. The main purpose of these instruments is to raise funds and to finance the company's operations.

 

Due to the nature of the financial instruments used by the company, there is no exposure to price risk. The company's approach to managing other risks applicable to the financial instruments is shown below.

 

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest.

 

With respect to hire purchase agreements, these comprise hire purchase contracts with various financial institutions. These financing agreements provide funds to the company to purchase various elements of plant and are secured on on those assets.

 

With respect to finance leasing agreements, these comprise finance lease contracts with various financial institutions. These financing agreements that provide the company with various elements of plant used in the business.

 

The loans from the related parties are interest free and repayable on demand. The director is aware of the company's required finances and has determined that these will only be repaid, in whole or in part, when finance is available.

 

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

 

Trade creditors and contractors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

SIMS MILLING SERVICES LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
Statement of director's responsibilities

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

 

 

The director is 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. He is 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.

Auditor

The auditor, TC Group, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
G A Sims
Director
29 September 2023
SIMS MILLING SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF SIMS MILLING SERVICES LIMITED
- 5 -
Opinion

We have audited the financial statements of Sims Milling Services Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the director 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 director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

SIMS MILLING SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SIMS MILLING SERVICES LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

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

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

SIMS MILLING SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SIMS MILLING SERVICES LIMITED
- 7 -

Our approach was as follows:

 

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx.

This description forms part of our auditor’s report.

 

 

 

 

 

SIMS MILLING SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SIMS MILLING SERVICES LIMITED
- 8 -

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.

Andrew Wilson ACA FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
Date:
29 September 2023
Office: London
SIMS MILLING SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
Notes
£
£
Turnover
3
13,321,111
13,878,073
Cost of sales
(9,127,419)
(9,441,481)
Gross profit
4,193,692
4,436,592
Administrative expenses
(3,786,306)
(5,263,264)
Other operating income
-
0
13
Exceptional item
4
-
0
4,286,805
Operating profit
5
407,386
3,460,146
Interest receivable and similar income
8
8
69
Interest payable and similar expenses
9
(248,327)
(553,319)
Profit before taxation
159,067
2,906,896
Tax on profit
10
74,305
(828,548)
Profit for the financial year
233,372
2,078,348
Other comprehensive income
-
-
Total comprehensive income for the year
233,372
2,078,348
SIMS MILLING SERVICES LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
6,566,220
8,900,621
Current assets
Debtors
13
8,616,541
10,433,697
Cash at bank and in hand
311,977
969,807
8,928,518
11,403,504
Creditors: amounts falling due within one year
14
(5,279,164)
(7,314,315)
Net current assets
3,649,354
4,089,189
Total assets less current liabilities
10,215,574
12,989,810
Creditors: amounts falling due after more than one year
15
(1,537,645)
(4,265,948)
Provisions for liabilities
Deferred tax liability
17
809,504
1,088,809
(809,504)
(1,088,809)
Net assets
7,868,425
7,635,053
Capital and reserves
Called up share capital
19
1
1
Profit and loss reserves
7,868,424
7,635,052
Total equity
7,868,425
7,635,053
The financial statements were approved and signed by the director and authorised for issue on 29 September 2023
G A Sims
Director
Company Registration No. 07053238
SIMS MILLING SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2021
1
5,556,704
5,556,705
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
2,078,348
2,078,348
Balance at 31 December 2021
1
7,635,052
7,635,053
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
233,372
233,372
Balance at 31 December 2022
1
7,868,424
7,868,425
SIMS MILLING SERVICES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
24
(400,625)
7,841,636
Interest paid
(248,327)
(553,319)
Income taxes (paid)/refunded
(352,444)
735,920
Net cash (outflow)/inflow from operating activities
(1,001,396)
8,024,237
Investing activities
Purchase of tangible fixed assets
(1,090,190)
(5,184,048)
Proceeds from disposal of tangible fixed assets
417,322
1,383,433
Repayment of loans
4,350,591
(4,844,141)
Interest received
8
69
Net cash generated from/(used in) investing activities
3,677,731
(8,644,687)
Financing activities
Repayment of bank loans
-
0
(50,000)
Payment of finance leases obligations
(3,334,165)
851,477
Net cash (used in)/generated from financing activities
(3,334,165)
801,477
Net (decrease)/increase in cash and cash equivalents
(657,830)
181,027
Cash and cash equivalents at beginning of year
969,807
788,780
Cash and cash equivalents at end of year
311,977
969,807
SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
1
Accounting policies
Company information

Sims Milling Services Limited is a company limited by shares incorporated in England and Wales. The registered office is Burrows Farm, Brentwood Road, Bulphan, Essex, RM14 3TL.

 

The principal activity of the company is noted in the Directors' Report.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover represents the amounts earned from the provision of services to external customers during the reporting period - the time of provision of services being the point at which the amount of the revenue can be measured reliably and when it is probable that the economic benefits will flow to the company. Turnover is stated at invoiced amounts less value added tax, plus revenue earned but unbilled which is included as accrued income in debtors.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
5% straight line
Plant and machinery
Over the period of the lease and 25 % straight line
Motor vehicles
25% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

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

SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

1.7
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

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

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities

Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

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

Derecognition of financial liabilities

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

1.8
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.9
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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

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

1.10
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

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.

1.11
Retirement benefits

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

SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.12
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

1.13
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

In the opinion of the directors there are no significant judgements or areas of estimation uncertainty.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2022
2021
£
£
Turnover analysed by class of business
Contract sale
13,321,111
13,878,073
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
13,321,111
13,878,073
SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Turnover and other revenue
(Continued)
- 17 -
2022
2021
£
£
Other revenue
Interest income
8
69
Grants received
-
13
4
Exceptional item
2022
2021
£
£
Income
Sale of assets
-
(4,286,805)

Exceptional item relates to the disposal of assets not recognised previously as per HMRC settlement.

5
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(13)
Fees payable to the company's auditor for the audit of the company's financial statements
17,595
15,600
Depreciation of owned tangible fixed assets
3,230,910
2,973,795
Impairment of owned tangible fixed assets
-
0
1,038,000
Profit on disposal of tangible fixed assets
(223,641)
(820,126)
6
Employees

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

2022
2021
Number
Number
Directors
1
1
Administration
5
5
Skilled/Semi-skilled
56
59
Total
62
65
SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
6
Employees
(Continued)
- 18 -

Their aggregate remuneration comprised:

2022
2021
£
£
Wages and salaries
2,108,418
2,033,614
Social security costs
229,114
203,336
Pension costs
28,400
59,106
2,365,932
2,296,056
7
Director's remuneration
2022
2021
£
£
Remuneration for qualifying services
8,628
8,628
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
8
69

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
8
69
9
Interest payable and similar expenses
2022
2021
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
243,114
319,844
Other interest
5,213
233,475
248,327
553,319
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
205,000
(196,500)
Adjustments in respect of prior periods
-
0
90,499
Total current tax
205,000
(106,001)
SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Taxation
2022
2021
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
(279,305)
934,549
Total tax (credit)/charge
(74,305)
828,548

The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2022
2021
£
£
Profit before taxation
159,067
2,906,896
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
30,223
552,310
Tax effect of utilisation of tax losses not previously recognised
(112,854)
-
0
Unutilised tax losses carried forward
-
0
112,854
Adjustments in respect of prior years
-
0
90,499
Deferred tax adjustments in respect of prior years
(279,304)
934,549
Depreciation
613,873
565,021
Chargeable disposals
(42,492)
(155,824)
Capital allowances
(159,828)
(675,949)
Other tax adjustments
(123,923)
(594,912)
Taxation (credit)/charge for the year
(74,305)
828,548
11
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2022
2021
Notes
£
£
In respect of:
Property, plant and equipment
12
-
0
1,038,000
Recognised in:
Administrative expenses
-
1,038,000
SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
12
Tangible fixed assets
Leasehold improvements
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2022
715,215
21,105,655
350,000
22,170,870
Additions
76,284
742,955
270,951
1,090,190
Disposals
-
0
(4,100,899)
-
0
(4,100,899)
At 31 December 2022
791,499
17,747,711
620,951
19,160,161
Depreciation and impairment
At 1 January 2022
53,985
13,208,972
7,292
13,270,249
Depreciation charged in the year
38,325
3,059,603
132,982
3,230,910
Eliminated in respect of disposals
-
0
(3,907,218)
-
0
(3,907,218)
At 31 December 2022
92,310
12,361,357
140,274
12,593,941
Carrying amount
At 31 December 2022
699,189
5,386,354
480,677
6,566,220
At 31 December 2021
661,230
7,896,683
342,708
8,900,621

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2022
2021
£
£
Plant and machinery
4,404,899
8,095,276

More information on impairment movements in the year is given in note 11.

13
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
3,024,987
2,075,901
Corporation tax recoverable
196,500
196,500
Other debtors
5,128,563
7,979,359
Prepayments and accrued income
266,491
181,937
8,616,541
10,433,697
SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
14
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Obligations under finance leases
16
1,819,917
2,425,779
Trade creditors
777,478
1,092,982
Corporation tax
759,789
907,233
Other taxation and social security
586,582
619,525
Other creditors
1,145,215
2,158,853
Accruals and deferred income
190,183
109,943
5,279,164
7,314,315
15
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Obligations under finance leases
16
1,537,645
4,265,948
16
Finance lease and hire purchase obligations
2022
2021
Future minimum lease payments due under finance leases and hire purchase contracts:
£
£
Within one year
3,357,562
2,425,779
In two to five years
-
0
4,265,948
3,357,562
6,691,727

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is four years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

17
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
809,504
1,088,809
SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
17
Deferred taxation
(Continued)
- 22 -
2022
Movements in the year:
£
Liability at 1 January 2022
1,088,809
Credit to profit or loss
(279,305)
Liability at 31 December 2022
809,504

The deferred tax liability set out above is expected to reverse within twelve months and relates to accelerated capital allowances that are expected to mature within the same period.

18
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
28,400
59,106

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.

19
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share of £1 each
1
1
1
1
20
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2022
2021
£
£
Aggregate compensation
194,585
196,383
SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
20
Related party transactions
(Continued)
- 23 -

Other Transactions

During the year the company transferred funds of £1,131,990 (2021: £638,381) to and received funds of £237,250 (2021: £169,959) from Sims Environmental & Recycling Services Ltd, a company in which Mr G A Sims is a director and shareholder. At the year end an amount of £1,270,451 (2021: £375,711) was due from Sims Environmental & Recycling Services Ltd. This is included in other debtors.

 

During the year the company transferred funds of £217,001 (2021: £nil) to and received £285,231 (2021: £18,047) from Sims Property (Ashford) Ltd, a company in which Mr G A Sims is a director and shareholder. At the year end an amount of £551,577 (2021: £619,807) was due from Sims Property (Ashford) Ltd. This is included in other debtors.

 

During the year the company paid expenses of £nil (2021: £53,803) on behalf of Sims Hire Services Ltd, a company in which Mr G A Sims is a director and shareholder. The company also transferred funds of £150,012 (2021: £nil) to and received funds of £30,000 (2021: £nil) from Sims Hire Services Ltd. At the year end an amount of £303,785 (2021: £423,797) was due to Sims Hire Services Ltd. This is included in other creditors.

 

During the year the company transferred funds of £60,700 (2021: £11,690) to and received funds of £10,000 (2021: £nil) from Sims Civil Engineering Ltd, a company in which Mr G A Sims is a director and shareholder. At the year end an amount of £50,700 (2021: £nil) was due from Sims Civil Engineering Ltd.

 

Previously the company received an interest free loan from Sims Group Ltd, a company in which Mr G A Sims is a director and shareholder. At the year end an amount of £763,062 (2021: £763,062) was due to Sims Group Ltd. This is included in other creditors.

 

During the year the company transferred funds of £1,770,000 (2021: £nil) to and received funds of £375,000 (2021: £nil) from Sims Property Holdings Ltd, a company in which Mr G A Sims is a director and shareholder. At the year end an amount of £492,229 (2021: £902,771 due to) was due from Sims Property Holdings Ltd. This is included in other debtors.

 

During the year the company paid expenses of £nil (2021: £39,235) to Sims Property (Maidstone) Limited, a company in which Mr G A Sims is a director and shareholder. The company also received funds of £nil (2021: £429,539) from Sims Property (Maidstone) Limited. At the year end an amount of £2,065,051 (2021: £2,065,051) was due from Sims Property (Maidstone) Limited. This is included in other debtors.

21
Events after the reporting date

In May 2023, an incident occurred which is being investigated by the Health and Safety Executive and the police. The investigation is ongoing and at the date of approving these financial statements, the director has not been given any indication of its conclusion. The company is unable to determine if fines would be imposed.

SIMS MILLING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
22
Directors' transactions

Loans have been granted to/(from) the director as outlined in the table below:

The loan was repaid post year end.

Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
G A Sims - Loan
-
4,844,140
649,277
(4,999,867)
493,550
4,844,140
649,277
(4,999,867)
493,550
23
Ultimate controlling party

The company is controlled by G A Sims.

24
Cash (absorbed by)/generated from operations
2022
2021
£
£
Profit for the year after tax
233,372
2,078,348
Adjustments for:
Taxation (credited)/charged
(74,305)
828,548
Finance costs
248,327
553,319
Investment income
(8)
(69)
Gain on disposal of tangible fixed assets
(223,641)
(820,126)
Depreciation and impairment of tangible fixed assets
3,230,910
4,011,795
Movements in working capital:
(Increase)/decrease in debtors
(2,533,435)
1,128,445
(Decrease)/increase in creditors
(1,281,845)
61,376
Cash (absorbed by)/generated from operations
(400,625)
7,841,636
25
Analysis of changes in net debt
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
969,807
(657,830)
311,977
Obligations under finance leases
(6,691,727)
3,334,165
(3,357,562)
(5,721,920)
2,676,335
(3,045,585)
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