Company registration number 00190120 (England and Wales)
N.SMITH & COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
N.SMITH & COMPANY LIMITED
COMPANY INFORMATION
Directors
Mr N Reynolds
Mr G Hogg
Mrs L J Kavanagh
Mrs K A Tyers
Mr S Wilkinson
Secretary
Mr N Reynolds
Company number
00190120
Registered office
Hainge Road
Oldbury
West Midlands
B69 2NZ
Auditor
Jerroms GCN Limited
West Point, Second Floor
Mucklow Office Park
Mucklow Hill
Halesowen
B62 8DY
N.SMITH & COMPANY LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Independent auditor's report
3 - 5
Profit and loss account
6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 23
N.SMITH & COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The directors present the strategic report for the year ended 31 March 2023.

Principal activities

The principal activity of the company continued to be that of manufacture of cardboard boxes, cartons and containers.

Review of the business

The company remains focused on turnover and profit before tax, and the company is now seeing the benefit of the investment in plant and property in the previous year. The company has strengthened it's position within a competitive market and with further investment planned in plant is well poised for growth over the coming years. The turnover and profit before tax both showed an improvement to the previous year and the directors are committed to further improving the company's performance in the current year.

Principal risks and uncertainties

The company does not actively use financial instruments as part of its financial risk management and during the year the company has been exposed to risks of supplier price increases, credit risk, liquidity risk and cash flow risk. The directors do not consider any other risks attaching to the use of financial instruments to be material to an assessment of its financial position.

On behalf of the board

Mr N Reynolds
Director
25 August 2023
N.SMITH & COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 March 2023.

Results and dividends

The results for the year are set out on page 6.

Ordinary dividends were paid amounting to £494,587. The directors do not recommend payment of a final dividend.

Directors

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

Mr N Reynolds
Mr G Hogg
Mrs L J Kavanagh
Mrs K A Tyers
Mr S Wilkinson
Statement of directors' responsibilities

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

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

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

On behalf of the board
Mr N Reynolds
Director
25 August 2023
N.SMITH & COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF N.SMITH & COMPANY LIMITED
- 3 -
Opinion

We have audited the financial statements of N.Smith & Company Limited (the 'company') for the year ended 31 March 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

N.SMITH & COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF N.SMITH & COMPANY LIMITED
- 4 -
Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and the industry in which it operates, we identified that principal risks of non-compliance with laws and regulations related to breaches of waste management regulations and employment laws, and we considered the extent to which non-compliance might have a material effect on the financial statements. Additionally, we considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.

 

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks related to posting journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates and significant one-off or unusual transactions. Audit procedures performed by the engagement team included:

 

- Discussions with management and those charged with governance including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;

- Evaluation and testing of the operating effectiveness of management's entity level controls designed to prevent and detect irregularities;

- Performing testing on month-end adjustments;

- Incorporating unpredictability into the nature, timing and/or extent of our testing;

- Challenging assumptions and judgements made by management in their significant accounting estimates;

- Identifying and testing journal entries, in particular any journal entries posted by infrequent users or senior management or posted with descriptions indicating a higher level of risk.

 

Whilst our audit did not identify any significant matters relating to the detection of irregularities including fraud, and despite the audit being planned and conducted in accordance with ISAs (UK), there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity would likely involve collusion, forgery, intentional misrepresentations, or the override of internal controls.

N.SMITH & COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF N.SMITH & COMPANY LIMITED
- 5 -

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's 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.

Mr Alan Edward Jones FCCA
Senior Statutory Auditor
For and on behalf of Jerroms GCN Limited
25 August 2023
Chartered Certified Accountants
Statutory Auditor
West Point, Second Floor
Mucklow Office Park
Mucklow Hill
Halesowen
B62 8DY
N.SMITH & COMPANY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 6 -
2023
2022
Notes
£
£
Turnover
3
11,214,976
9,715,705
Cost of sales
(7,054,541)
(6,394,956)
Gross profit
4,160,435
3,320,749
Distribution costs
(517,947)
(590,252)
Administrative expenses
(2,400,149)
(2,103,659)
Other operating income
1,161
1,161
Operating profit
4
1,243,500
627,999
Interest payable and similar expenses
7
(68,558)
(60,454)
Profit before taxation
1,174,942
567,545
Tax on profit
8
(187,893)
(57,553)
Profit for the financial year
987,049
509,992

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

N.SMITH & COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 7 -
2023
2022
£
£
Profit for the year
987,049
509,992
Other comprehensive income
Tax relating to other comprehensive income
(65,053)
-
0
Total comprehensive income for the year
921,996
509,992
N.SMITH & COMPANY LIMITED
BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
3,162,954
3,479,701
Current assets
Stocks
11
532,089
573,999
Debtors
12
3,355,059
3,515,247
Cash at bank and in hand
1,234,699
260,871
5,121,847
4,350,117
Creditors: amounts falling due within one year
13
(2,357,508)
(2,107,339)
Net current assets
2,764,339
2,242,778
Total assets less current liabilities
5,927,293
5,722,479
Creditors: amounts falling due after more than one year
14
(1,331,840)
(1,636,893)
Provisions for liabilities
Deferred tax liability
18
592,170
509,712
(592,170)
(509,712)
Net assets
4,003,283
3,575,874
Capital and reserves
Called up share capital
20
52,000
52,000
Revaluation reserve
813,169
878,222
Profit and loss reserves
3,138,114
2,645,652
Total equity
4,003,283
3,575,874
The financial statements were approved by the board of directors and authorised for issue on 25 August 2023 and are signed on its behalf by:
Mr N Reynolds
Mr G Hogg
Director
Director
Company Registration No. 00190120
N.SMITH & COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2021
52,000
878,222
2,566,760
3,496,982
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
509,992
509,992
Dividends
9
-
-
(431,100)
(431,100)
Balance at 31 March 2022
52,000
878,222
2,645,652
3,575,874
Year ended 31 March 2023:
Profit for the year
-
-
987,049
987,049
Other comprehensive income:
Tax relating to other comprehensive income
-
(65,053)
-
0
(65,053)
Total comprehensive income for the year
-
(65,053)
987,049
921,996
Dividends
9
-
-
(494,587)
(494,587)
Balance at 31 March 2023
52,000
813,169
3,138,114
4,003,283
N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
1
Accounting policies
Company information

N.Smith & Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hainge Road, Oldbury, West Midlands, B69 2NZ.

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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

1.2
Going concern

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

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 11 -

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

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:

Freehold land and buildings
0%
Plant and equipment
10-15% on cost
Fixtures and fittings
10-33% on cost

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.

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

 

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

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

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 12 -

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

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

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.

N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

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

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

1.9
Equity instruments

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

1.10
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
Deferred tax

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

 

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

1.11
Employee benefits

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

 

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

 

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.

1.12
Retirement benefits

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

1.13
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 balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.14
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.

N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 15 -
2
Judgements and key sources of estimation uncertainty

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

 

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

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
11,214,976
9,715,705
2023
2022
£
£
Other revenue
Grants received
1,161
1,161
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(25,484)
25,484
Government grants
(1,161)
(1,161)
Fees payable to the company's auditor for the audit of the company's financial statements
7,750
7,350
Depreciation of owned tangible fixed assets
341,363
307,521
5
Employees

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

2023
2022
Number
Number
Production and transport
56
55
Sales and administration
12
12
Total
68
67
N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
5
Employees
(Continued)
- 16 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,300,807
1,268,223
Social security costs
104,481
92,288
Pension costs
218,696
45,418
1,623,984
1,405,929
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
55,972
56,069
Company pension contributions to defined contribution schemes
169,601
3,712
225,573
59,781
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
16,929
13,199
Interest on finance leases and hire purchase contracts
51,629
47,255
68,558
60,454
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
170,488
(104,491)
Deferred tax
Origination and reversal of timing differences
17,405
162,044
Total tax charge
187,893
57,553
N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
8
Taxation
(Continued)
- 17 -

The actual 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:

2023
2022
£
£
Profit before taxation
1,174,942
567,545
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
223,239
107,834
Tax effect of expenses that are not deductible in determining taxable profit
(211)
(211)
Permanent capital allowances in excess of depreciation
42,048
(149,853)
Research and development tax credit
(94,588)
(62,261)
Deferred tax movement
17,405
162,044
Taxation charge for the year
187,893
57,553

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Revaluation of property
65,053
-
9
Dividends
2023
2022
£
£
Interim paid
494,587
431,100
N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
10
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost or valuation
At 1 April 2022
1,470,000
3,325,091
193,969
4,989,060
Additions
-
0
19,117
5,499
24,616
At 31 March 2023
1,470,000
3,344,208
199,468
5,013,676
Depreciation and impairment
At 1 April 2022
-
0
1,332,002
177,357
1,509,359
Depreciation charged in the year
-
0
335,693
5,670
341,363
At 31 March 2023
-
0
1,667,695
183,027
1,850,722
Carrying amount
At 31 March 2023
1,470,000
1,676,513
16,441
3,162,954
At 31 March 2022
1,470,000
1,993,089
16,612
3,479,701

Cost or valuation at 31 March 2023 is represented by:                    

                        

                Freehold                Fixtures            

                and and        Plant and     and             

                 buildings     machinery    fittings        Totals        

                  £         £         £         £        

 

Valuation in 1998            251,100             -        -     251,100         

Valuation in 2007             89,174             -        -     89,174

 

Valuation in 2015            (91,919)             -        -     (91,919)        

Valuation in 2017            160,000             -        -     160,000         

Valuation in 2021            675,869             -        -     675,869         

Cost                385,776         3,344,208      199,468     3,929,452        

                ────────    ───────     ───────     ───────         

                1,470,000    3,344,208     199,468    5,013,676         

                ────────    ───────     ───────     ───────

 

 

 

If freehold land and buildings had not been revalued they would have been included at the following historical cost. Freehold land and building were valued on an open market basis on 17th June 2021 by K A Evans Bsc (Hons) MRICS.

N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
10
Tangible fixed assets
(Continued)
- 19 -
Freehold land and buildings
Freehold land and building
2023
2022
2023
2022
£
£
£
£
Cost
385,776
385,776
385,776
385,776
11
Stocks
2023
2022
£
£
Raw materials and consumables
159,529
300,047
Work in progress
46,281
41,490
Finished goods and goods for resale
326,279
232,462
532,089
573,999
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,782,988
1,934,557
Corporation tax recoverable
-
0
104,491
Amounts owed by group undertakings
1,310,418
1,310,614
Prepayments and accrued income
261,653
165,585
3,355,059
3,515,247

Amounts owed to group undertakings do not bear interest and are repayable on demand.

13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
15
14,610
14,221
Obligations under finance leases
16
285,913
260,478
Trade creditors
1,544,254
1,561,836
Corporation tax
169,021
-
0
Other taxation and social security
237,123
188,317
Other creditors
27,097
8,021
Accruals and deferred income
79,490
74,466
2,357,508
2,107,339
N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
312,383
331,691
Obligations under finance leases
16
1,019,457
1,305,202
1,331,840
1,636,893
15
Loans and overdrafts
2023
2022
£
£
Bank loans
326,993
345,912
Payable within one year
14,610
14,221
Payable after one year
312,383
331,691

National Westminster Bank plc holds a debenture incorporating a fixed and floating charge over all current and future assets of the company. A guarantee dated 6 April 2000 has been given by Goldencress Associates Limited. An additional charge dated 29 September 2004 was issued to include the freehold additions at Hainge Road and a charge lodged on 9 May 2018 to cover property at 40 Hainge Road.

 

Royal Bank of Scotland holds a floating charge dated 15 May 2015 over all the property or undertakings of the company.

16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
285,913
260,478
In two to five years
1,019,457
893,197
In over five years
-
0
412,005
1,305,370
1,565,680
N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
17
Financial Instruments

 

                                    2023        2022    

                                        £        £    

 

Financial assets that are debt instruments measured at amortised cost:

 

Trade debtors                12                1,782,988    1,934,558

Amounts owed by group companies        12                1,310,418    1,310,614    

                                 ──────── ───────

                                    3,093,406    3,245,172    

                                 ──────── ───────

 

Financial liabilities measured at amortised cost:

 

Bank loans and overdraft            13 & 14                 326,993     345,912    

Trade creditors                13                1,544,254    1,561,838    

Other creditors                13                 27,097     8,021

                                 ─────── ───────

                                    1,898,344    1,915,771    

                                  ─────── ───────     

18
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
321,114
303,709
Revaluations
271,056
206,003
592,170
509,712
2023
Movements in the year:
£
Liability at 1 April 2022
509,712
Charge to profit or loss
17,405
Charge to equity
65,053
Liability at 31 March 2023
592,170
N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
18
Deferred taxation
(Continued)
- 22 -

 

19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
218,696
45,418

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.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
20,000
20,000
20,000
20,000
Ordinary B shares of £1 each
29,000
29,000
29,000
29,000
Ordinary M shares of £1 each
2,000
2,000
2,000
2,000
Ordinary N shares of £1 each
1,000
1,000
1,000
1,000
52,000
52,000
52,000
52,000
21
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
150,000
178,047
Between two and five years
506,163
146,745
In over five years
2,584
33,596
658,747
358,388
22
Ultimate controlling party

The immediate parent undertaking of the company is Goldencress Associates Limited. The ultimate parent undertaking of the company is Goldencress Holdings Ltd. Both companies are registered in England and Wales.

 

The registered office of both the immediate parent undertaking and the ultimate parent undertaking is Leopold Works, Hainge Road, Tividale, Oldbury, West Midlands, B69 2NZ.

 

Copies of the financial statements of Goldencress Associates Limited and Goldencress Holdings Ltd may be obtained from the Registrar of Companies, Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.

N.SMITH & COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
23
Auditor liability limitation agreement

The company has, by resolution, waived the need for annual approval of the auditors' limited liability, which has been set at £2,000,000 within the letter of engagement dated 25 August 2023. This approval has been confirmed in the letter of representation dated 25 August 2023.

2023-03-312022-04-01falseCCH SoftwareCCH Accounts Production 2023.200Mr G HoggMrs L J KavanaghMrs K A TyersMr S WilkinsonMr S WilkinsonMr N Reynolds987049001901202022-04-012023-03-3100190120bus:CompanySecretaryDirector12022-04-012023-03-3100190120bus:Director12022-04-012023-03-3100190120bus:Director22022-04-012023-03-3100190120bus:Director32022-04-012023-03-3100190120bus:Director42022-04-012023-03-3100190120bus:CompanySecretary12022-04-012023-03-3100190120bus:Director52022-04-012023-03-3100190120bus:RegisteredOffice2022-04-012023-03-31001901202023-03-31001901202021-04-012022-03-3100190120core:RetainedEarningsAccumulatedLosses2021-04-012022-03-3100190120core:RetainedEarningsAccumulatedLosses2022-04-012023-03-3100190120core:RevaluationReserve2022-04-012023-03-31001901202022-03-3100190120core:LandBuildingscore:OwnedOrFreeholdAssets2023-03-3100190120core:PlantMachinery2023-03-3100190120core:FurnitureFittings2023-03-3100190120core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-3100190120core:PlantMachinery2022-03-3100190120core:FurnitureFittings2022-03-3100190120core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3100190120core:CurrentFinancialInstrumentscore:WithinOneYear2022-03-3100190120core:Non-currentFinancialInstrumentscore:AfterOneYear2023-03-3100190120core:Non-currentFinancialInstrumentscore:AfterOneYear2022-03-3100190120core:CurrentFinancialInstruments2023-03-3100190120core:CurrentFinancialInstruments2022-03-3100190120core:Non-currentFinancialInstruments2023-03-3100190120core:Non-currentFinancialInstruments2022-03-3100190120core:ShareCapital2023-03-3100190120core:ShareCapital2022-03-3100190120core:RevaluationReserve2023-03-3100190120core:RevaluationReserve2022-03-3100190120core:RetainedEarningsAccumulatedLosses2023-03-3100190120core:RetainedEarningsAccumulatedLosses2022-03-3100190120core:ShareCapital2021-03-3100190120core:RevaluationReserve2021-03-3100190120core:RetainedEarningsAccumulatedLosses2021-03-31001901202021-03-3100190120core:ShareCapitalOrdinaryShares2023-03-3100190120core:ShareCapitalOrdinaryShares2022-03-3100190120bus:Original2022-04-012023-03-3100190120core:LandBuildingscore:OwnedOrFreeholdAssets2022-04-012023-03-3100190120core:PlantMachinery2022-04-012023-03-3100190120core:FurnitureFittings2022-04-012023-03-3100190120core:UKTax2022-04-012023-03-3100190120core:UKTax2021-04-012022-03-310019012012022-04-012023-03-310019012012021-04-012022-03-3100190120core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-3100190120core:PlantMachinery2022-03-3100190120core:FurnitureFittings2022-03-31001901202022-03-3100190120core:WithinOneYear2023-03-3100190120core:WithinOneYear2022-03-3100190120core:BetweenTwoFiveYears2023-03-3100190120core:BetweenTwoFiveYears2022-03-3100190120core:MoreThanFiveYears2023-03-3100190120core:MoreThanFiveYears2022-03-3100190120bus:PrivateLimitedCompanyLtd2022-04-012023-03-3100190120bus:FRS1022022-04-012023-03-3100190120bus:Audited2022-04-012023-03-3100190120bus:FullAccounts2022-04-012023-03-31xbrli:purexbrli:sharesiso4217:GBP