Company Registration No. 02884404 (England and Wales)
SMITH CONSTRUCTION GROUP LIMITED
GROUP ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
SMITH CONSTRUCTION GROUP LIMITED
COMPANY INFORMATION
Directors
I C Smith
J Banks
G Scotney
Secretary
J Banks
Company number
02884404
Registered office
Smith House
Maidstone Road
Kingston
Milton Keynes
Buckinghamshire
MK10 0BD
Auditor
Mercer & Hole LLP
Silbury Court
420 Silbury Boulevard
Central Milton Keynes
MK9 2AF
Bankers
Lloyds TSB Bank plc
The Business Centre
Lloyds Court
28 Secklow Gate West
Milton Keynes
Buckinghamshire
MK9 3EH
SMITH CONSTRUCTION GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 32
SMITH CONSTRUCTION GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

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

Fair review of the business

The directors are pleased to report that the group continued to trade strongly, achieving sales of £19.3 million and profit before tax of £2,891,342. Turnover has increased approximately 18% from 2022 whilst gross margin percentage was 23.8 compared to 29.6% in the prior year.

 

We are proud of the Strong reputation the group has developed as an expert service provider in the industry. We have continued to innovate on the services we offer to increase our efficiency, embracing the concept of the ‘circular economy’ to recycle and reuse waste aggregate material. This has helped to boost the cost and efficiency savings to both the group and our customers whilst also reducing the carbon footprint. This approach, together with the hard work of our team has enabled us to continue optimising our business operations and been a major factor in helping us to achieve a pre-tax profit of £2,891,342 for the year.

 

The directors monitor recoverability on contracts, utilisation of plant and vehicles and cash flow as key performance indicators and are satisfied that these have been managed effectively through the year.

 

The group continues to focus on cash generation and remains strongly placed to fund the working capital and continued investment required to maintain and develop its operations. The group has access to bank facilities if required and continues to have funds available to invest in suitable opportunities that may arise where they are complimentary to our existing operations.

Principal risks and uncertainties

The principal risks facing the company can broadly be grouped as competitive and financial.

 

Competitive

The economic climate has continued to deteriorate nationally and has affected the Construction industry particularly acutely. The directors are confident that the financial strength of the group together with the strong relationships enjoyed with key customers and the range of high quality services it provides are sufficient to enable the group to weather such pressures. The directors monitor recoverability on contracts, utilisation of plant and vehicles and cash flow as key performance indicators and are satisfied that these have been managed effectively through the year. The directors monitor recoverability on contracts, utilisation of plant and vehicles and cash flow as key performance indicators and are satisfied that these have been managed effectively through the year.

 

Financial

The directors are satisfied that the group's financial risks are being correctly managed. The group finances its investment in plant and machinery using bank facilities which are available to provide working capital as required.

The group's main financial instruments comprise cash and items such as debtors and creditors. The main purpose of these instruments is to provide finance for the group's operations. There are limited risks arising to the group as a result of these instruments and the directors agree policies for the management of these instruments, which are detailed below:

 

a) Credit risk - The group seeks to minimise any credit risk by dealing with established and financially sound customers. It establishes clear contractual relationships and identifies credit issues in a timely manner. The directors consider the financial situation of the key customers of the group to ensure that this risk is adequately managed to protect the group.

 

b) Liquidity risk - The group seeks to manage and minimise financial risk by ensuring that sufficient liquidity is available at all times to meet working capital requirements and by investing cash assets safely and profitably. Due to the increasing difficulty of obtaining finance using conventional credit facilities, the ability of the company to fund its own operations is a key strength in the current market.

SMITH CONSTRUCTION GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -

c) Going concern risk - It is the duty of the directors to consider the ability of the group to continue to trade for the foreseeable future and in doing this the directors have considered any uncertainties in the market, available funding and any other economic factors which may impact the ability of the group to trade in the future. The directors are confident that the level of business expected for the group over the next financial year, combined with the current level of net cash resources means that the group does not expect to require further funding in order to continue its activities for the foreseeable future. There are no areas of material uncertainty that may have any impact on the group's business and the directors are therefore confident that it is appropriate to prepare the financial statements of the group on a going concern basis.

Development and performance

The directors are pleased with the results for the year. The group operates from a sound financial position and the directors look forward to maximising the opportunities that are available during the 2024 financial year.

 

The directors do not anticipate that there will be any fundamental change in the development of the group's

business during the coming year and intend to continue investing in its people and equipment to ensure that any risks and uncertainties are managed effectively.

 

 

On behalf of the board

I C Smith
Director
22 December 2023
SMITH CONSTRUCTION GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

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

Principal activities

The principal activity of the company and group during the year under review was that of contractors to the building and civil engineering industries.

Directors

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

I C Smith
J Banks
G Scotney
Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £1,000,000. The directors do not recommend payment of a final dividend.

Auditor

In accordance with the company's articles, a resolution proposing that be reappointed as auditor of the group will be put at a General Meeting.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
I C Smith
Director
22 December 2023
SMITH CONSTRUCTION GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -

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 group and company, and of the profit or loss of the group 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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

SMITH CONSTRUCTION GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMITH CONSTRUCTION GROUP LIMITED
- 5 -
Opinion

We have audited the financial statements of Smith Construction Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 group and parent 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 group's and parent 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:

SMITH CONSTRUCTION GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMITH CONSTRUCTION GROUP LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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 parent 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 parent 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.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to, the Companies Act 2006 and tax legislation.

 

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure and management bias in accounting estimates.

 

Audit procedures performed by the engagement team included:

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. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non- compliance and cannot be expected to detect non-compliance with all laws and regulations.

SMITH CONSTRUCTION GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMITH CONSTRUCTION GROUP LIMITED
- 7 -

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.

Philip Fenn ACA FCCA (Senior Statutory Auditor)
for and on behalf of Mercer & Hole LLP
24 December 2023
Chartered Accountants
Silbury Court
Statutory Auditor
420 Silbury Boulevard
Central Milton Keynes
Buckinghamshire
MK9 2AF
SMITH CONSTRUCTION GROUP LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
19,275,576
16,279,478
Cost of sales
(14,688,202)
(11,460,596)
Gross profit
4,587,374
4,818,882
Administrative expenses
(1,692,402)
(1,883,876)
Other operating income
14,500
14,500
Operating profit
4
2,909,472
2,949,506
Interest receivable and similar income
8
8,530
355
Interest payable and similar expenses
9
(26,660)
(30,195)
Profit before taxation
2,891,342
2,919,666
Tax on profit
10
(577,639)
(660,152)
Profit for the financial year
24
2,313,703
2,259,514
Profit for the financial year is all attributable to the owners of the parent company.
SMITH CONSTRUCTION GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
£
£
Profit for the year
2,313,703
2,259,514
Other comprehensive income
-
-
Total comprehensive income for the year
2,313,703
2,259,514
Total comprehensive income for the year is all attributable to the parent company.
SMITH CONSTRUCTION GROUP LIMITED
GROUP BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
7,102,441
5,168,376
Current assets
Stocks
16
715,866
767,473
Debtors
17
4,124,389
5,403,060
Cash at bank and in hand
10,112,536
8,574,758
14,952,791
14,745,291
Creditors: amounts falling due within one year
18
(4,803,358)
(4,136,908)
Net current assets
10,149,433
10,608,383
Total assets less current liabilities
17,251,874
15,776,759
Creditors: amounts falling due after more than one year
19
(482,865)
(545,661)
Provisions for liabilities
Deferred tax liability
21
683,275
459,067
(683,275)
(459,067)
Net assets
16,085,734
14,772,031
Capital and reserves
Called up share capital
23
101
101
Profit and loss reserves
24
16,085,633
14,771,930
Total equity
16,085,734
14,772,031
The financial statements were approved by the board of directors and authorised for issue on 22 December 2023 and are signed on its behalf by:
I C Smith
Director
Company registration number 02884404 (England and Wales)
SMITH CONSTRUCTION GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 31 MARCH 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
6,802,441
4,868,376
Investments
14
535,091
535,091
7,337,532
5,403,467
Current assets
Stocks
16
715,866
767,473
Debtors
17
4,127,142
5,397,257
Cash at bank and in hand
9,830,427
8,553,781
14,673,435
14,718,511
Creditors: amounts falling due within one year
18
(4,741,312)
(4,411,810)
Net current assets
9,932,123
10,306,701
Total assets less current liabilities
17,269,655
15,710,168
Creditors: amounts falling due after more than one year
19
(482,865)
(545,661)
Provisions for liabilities
21
(683,275)
(459,067)
Net assets
16,103,515
14,705,440
Capital and reserves
Called up share capital
23
101
101
Profit and loss reserves
24
16,103,414
14,705,339
Total equity
16,103,515
14,705,440
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company's profit for the year was £2,318,425  (2022: £2,192,923)
The financial statements were approved by the board of directors and authorised for issue on 22 December 2023 and are signed on its behalf by:
I C Smith
Director
Company Registration No. 02884404
SMITH CONSTRUCTION GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2021
101
12,512,416
12,512,517
Year ended 31 March 2022:
Profit and total comprehensive income
-
2,259,514
2,259,514
Balance at 31 March 2022
101
14,771,930
14,772,031
Year ended 31 March 2023:
Profit and total comprehensive income
-
2,313,703
2,313,703
Dividends
11
-
(1,000,000)
(1,000,000)
Balance at 31 March 2023
101
16,085,633
16,085,734
SMITH CONSTRUCTION GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2021
101
12,512,416
12,512,517
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
2,192,923
2,192,923
Balance at 31 March 2022
101
14,705,339
14,705,440
Year ended 31 March 2023:
Profit and total comprehensive income
-
2,398,075
2,398,075
Dividends
11
-
(1,000,000)
(1,000,000)
Balance at 31 March 2023
101
16,103,414
16,103,515
SMITH CONSTRUCTION GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
29
4,900,343
3,366,022
Interest paid
(26,660)
(30,195)
Income taxes paid
(468,267)
(226,248)
Net cash inflow from operating activities
4,405,416
3,109,579
Investing activities
Purchase of tangible fixed assets
(2,991,348)
(893,683)
Proceeds on disposal of tangible fixed assets
654,149
118,000
Interest received
8,530
355
Net cash used in investing activities
(2,328,669)
(775,328)
Financing activities
Issue of loans to directors
-
(526,455)
Repayment of loans by directors
526,455
-
Repayment of bank loans
(65,424)
(62,999)
Payment of finance leases obligations
-
(17,713)
Dividends paid to equity shareholders
(1,000,000)
-
Net cash used in financing activities
(538,969)
(607,167)
Net increase in cash and cash equivalents
1,537,778
1,727,084
Cash and cash equivalents at beginning of year
8,574,758
6,847,674
Cash and cash equivalents at end of year
10,112,536
8,574,758
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 15 -
1
Accounting policies
Company information

Smith Construction Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Smith House, Maidstone Road, Kingston, Milton Keynes, Buckinghamshire, MK10 0BD.

 

The group consists of Smith Construction Group Limited and all of its subsidiaries.

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.

The 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 for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -

The consolidated group financial statements consist of the financial statements of the parent company Smith Construction Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 March 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

1.3
Going concern

The financial statements have been prepared on a going concern basis.  In making this assessment, the directors have prepared detailed trading and cash flow forecasts to 31 December 2024.  The directors have a reasonable expectation that the group has adequate resources to continue in operational existence over this period and have therefore adopted the going concern basis of accounting in preparing the financial statements.

1.4
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 contracts for the provision of 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 / equipment 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 are recoverable.

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is currently 3 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -
1.6
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
No depreciation is provided in respect of freehold land and buildings
Plant and equipment
25% on a reducing balance basis
Fixtures and fittings
25% on a reducing balance basis
Motor vehicles
25% on a reducing balance basis

In accordance with the requirements of FRS 102, the directors perform annual impairment reviews of the land and buildings to ensure that the carrying value is not lower than the recoverable amount. No depreciation has been provided in respect of the freehold land and buildings. Whilst this is a departure from the general requirement of the Companies Act 2006 for depreciation to be charged on buildings, the effect is not material due to the high residual value and in the directors opinion it is appropriate to ensure that the financial statements present a true and fair view.

 

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 the profit and loss account.

1.7
Fixed asset investments

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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 the profit and loss account, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 18 -

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 the profit and loss account, 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.

1.9
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.

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 the profit and loss account. Reversals of impairment losses are also recognised in the profit and loss account.

1.10
Cash at bank and in hand

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.

1.11
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 19 -
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 the profit and loss account.

 

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 the profit and loss account.

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 group 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 group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, hire purchase liabilities, finance lease obligations and loans from fellow group companies 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.12
Equity instruments

Equity instruments issued by the group 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 group.

1.13
Taxation

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

SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 20 -
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 group’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.

 

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 if, and only if, there is 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.

1.14
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.

1.15
Retirement benefits

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

1.16
Leases

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 leased asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 21 -
Key sources of estimation uncertainty

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

Amounts recoverable on long term contracts

FRS 102 requires that when the outcome of a transaction can be estimated reliably, an entity shall recognise revenue associated with the transaction by reference to the stage of completion of the transaction. The entity calculates the sales value associated with work in progress with reference to the stage of completion of its works at agreed rates. The gross amount relating to amounts recoverable on long term contracts is recognised in debtors and the estimated gross margin is recognised in revenue. Details of the amounts recoverable on long term contracts is set out in note 18.

Site restoration and monitoring cost provisions

The costs of restoring and monitoring operational locations in accordance with planning and licensing conditions after activity completes are expensed as incurred during the working life of each site. The associated costs are based on independent professional valuations or detailed estimates prepared by management and are included in creditors and accruals. Actual costs may differ dependent on the exact circumstances under which the rectification work is completed.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Turnover attributable to the main activities of the group
19,275,576
16,279,478
2023
2022
£
£
Other significant revenue
Interest income
8,530
355
2023
2022
£
£
Turnover analysed by geographical market
Turnover arising in the United Kingdom
19,275,576
16,279,478
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Depreciation of owned tangible fixed assets
752,286
822,183
Depreciation of tangible fixed assets held under finance leases
-
10,214
Profit on disposal of tangible fixed assets
(349,152)
(69,213)
Operating lease charges
32,807
38,531
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
30,500
28,075
Audit of the financial statements of the company's subsidiaries
2,500
-
33,000
28,075
For other services
Taxation compliance services
3,975
3,615
Other taxation services
1,500
1,150
All other non-audit services
8,865
21,860
14,340
26,625
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Office including Directors
15
15
13
13
Other
60
60
60
60
Total
75
75
73
73

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
2,862,479
2,853,400
2,862,480
2,853,400
Social security costs
323,702
307,121
323,702
307,121
Pension costs
183,483
154,989
183,483
154,989
3,369,664
3,315,510
3,369,665
3,315,510
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
241,033
180,814
Company pension contributions to defined contribution schemes
121,347
99,465
362,380
280,279
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
164,823
67,419
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
8,530
355
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
8,530
355
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
26,660
29,561
Other finance costs:
Interest on finance leases and hire purchase contracts
-
634
Total finance costs
26,660
30,195
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
353,517
468,267
Adjustments in respect of prior periods
(86)
(174)
Total current tax
353,431
468,093
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
10
Taxation
2023
2022
£
£
(Continued)
- 24 -
Deferred tax
Origination and reversal of timing differences
224,208
192,059
Total tax charge
577,639
660,152

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
2,891,342
2,919,666
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
549,355
554,737
Tax effect of expenses that are not deductible in determining taxable profit
(25,440)
(4,587)
Adjustments in respect of prior years
(86)
(174)
Effect of change in corporation tax rate
53,810
110,176
Taxation charge
577,639
660,152
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
1,000,000
-
12
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 April 2022 and 31 March 2023
25,000
Amortisation and impairment
At 1 April 2022 and 31 March 2023
25,000
Carrying amount
At 31 March 2023
-
0
At 31 March 2022
-
0
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
12
Intangible fixed assets
(Continued)
- 25 -

On 31 August 2018 the company purchased the trade and certain assets of Smith Construction (Milton Keynes) Limited, a specialist road haulage business servicing the construction sector. The total consideration was £94,500 and the fair value of the assets acquired £69,500, giving a goodwill balance of £25,000 which has now been fully amortised.

Company
Goodwill
£
Cost
At 1 April 2022 and 31 March 2023
25,000
Amortisation and impairment
At 1 April 2022 and 31 March 2023
25,000
Carrying amount
At 31 March 2023
-
0
At 31 March 2022
-
0
13
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2022
2,291,597
6,557,776
14,023
2,239,104
11,102,500
Additions
1,669,500
1,279,233
1,615
41,000
2,991,348
Disposals
-
0
(908,900)
-
0
(350,600)
(1,259,500)
At 31 March 2023
3,961,097
6,928,109
15,638
1,929,504
12,834,348
Depreciation and impairment
At 1 April 2022
-
0
4,349,668
6,310
1,578,146
5,934,124
Depreciation charged in the year
-
0
601,297
2,231
148,758
752,286
Eliminated in respect of disposals
-
0
(689,345)
-
0
(265,158)
(954,503)
At 31 March 2023
-
0
4,261,620
8,541
1,461,746
5,731,907
Carrying amount
At 31 March 2023
3,961,097
2,666,489
7,097
467,758
7,102,441
At 31 March 2022
2,291,597
2,208,108
7,713
660,958
5,168,376
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
13
Tangible fixed assets
(Continued)
- 26 -
Company
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2022
1,991,597
6,557,776
14,023
2,239,104
10,802,500
Additions
1,669,500
1,279,233
1,615
41,000
2,991,348
Disposals
-
0
(908,900)
-
0
(350,600)
(1,259,500)
At 31 March 2023
3,661,097
6,928,109
15,638
1,929,504
12,534,348
Depreciation and impairment
At 1 April 2022
-
0
4,349,668
6,310
1,578,146
5,934,124
Depreciation charged in the year
-
0
601,297
2,231
148,758
752,286
Eliminated in respect of disposals
-
0
(689,345)
-
0
(265,158)
(954,503)
At 31 March 2023
-
0
4,261,620
8,541
1,461,746
5,731,907
Carrying amount
At 31 March 2023
3,661,097
2,666,489
7,097
467,758
6,802,441
At 31 March 2022
1,991,597
2,208,108
7,713
660,958
4,868,376
14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
535,091
535,091
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 April 2022 and 31 March 2023
535,091
Carrying amount
At 31 March 2023
535,091
At 31 March 2022
535,091
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 27 -
15
Subsidiaries

Details of the company's subsidiaries at 31 March 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
GFXH Properties Limited
United Kingdom
Ordinary
100.00
Smith Aggregates & Builders Merchants Ltd
United Kingdom
Ordinary
100.00

The investments in subsidiaries are all stated at cost.

16
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
65,725
86,964
65,725
86,964
Work in progress
639,725
639,725
639,725
639,725
Fuel
10,416
40,784
10,416
40,784
715,866
767,473
715,866
767,473
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,813,845
3,324,033
2,803,050
3,318,330
Gross amounts owed by contract customers
39,687
223,642
39,687
223,642
Other debtors
1,071,711
1,587,494
1,085,259
1,587,394
Prepayments and accrued income
199,146
267,891
199,146
267,891
4,124,389
5,403,060
4,127,142
5,397,257
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
20
67,964
70,592
67,964
70,592
Trade creditors
1,888,455
1,899,778
1,704,096
1,819,966
Corporation tax payable
351,110
465,946
347,444
450,326
Other taxation and social security
610,839
680,850
604,174
659,062
Other creditors
490,865
(2,267)
626,009
414,872
Accruals and deferred income
832,725
298,709
830,225
273,692
Site restoration and monitoring costs
561,400
723,300
561,400
723,300
4,803,358
4,136,908
4,741,312
4,411,810
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 28 -
19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
482,865
545,661
482,865
545,661
20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
550,829
616,253
550,829
616,253
Payable within one year
67,964
70,592
67,964
70,592
Payable after one year
482,865
545,661
482,865
545,661

The bank loan is secured by a mortgage containing a fixed charge over the freehold property including all buildings and fixtures and a debenture including a fixed charge over all present freehold and leasehold property, plant and machinery, book and other debts dated 2nd July 2007.

 

The bank loan is repayable over 15 years. Fixed rate interest is charged at 4.54%.

21
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
683,275
459,067
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
683,275
459,067
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
21
Deferred taxation
(Continued)
- 29 -
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 April 2022
459,067
459,067
Charge to profit or loss
224,208
224,208
Liability at 31 March 2023
683,275
683,275
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
183,483
154,989

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

23
Share capital
Group and company
2023
2022
Ordinary share capital
£
£
Issued and fully paid
101 Ordinary shares of £1 each
101
101
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 30 -
24
Reserves
Profit and loss reserves

The amount of profit after tax retained by the company after dividend payments.

25
Operating lease commitments
Lessee

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
70,501
81,788
70,501
81,788
Between two and five years
195,058
215,924
195,058
215,924
In over five years
289,635
337,908
289,635
337,908
555,194
635,620
555,194
635,620
26
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
916,507
734,299
Transactions with related parties

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

Income
Income
Payments
Payments
2023
2022
2023
2022
£
£
£
£
Group
Entities under common control
214,714
238,272
81,297
60,356
Company
Entities under common control
214,714
238,272
81,297
60,356
SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
26
Related party transactions
(Continued)
- 31 -
Rent
Rent
Dividends
Dividends
2023
2022
2023
2022
£
£
£
£
Group
Entities under common control
44,000
52,800
-
-
Other related parties
-
-
9,901
-
Company
Entities under common control
44,000
52,800
-
-
Other related parties
-
-
9,901
-

The following amounts were outstanding at the reporting end date:

Amounts owed to related parties
2023
2022
£
£
Group
Other related parties
9,901
-
Company
Other related parties
9,901
-

The following amounts were outstanding at the reporting end date:

Amounts owed by related parties
2023
2022
Balance
Balance
£
£
Group
Entities under common control
1,071,711
1,075,704
Company
Entities under common control
1,071,711
1,075,704
27
Directors' transactions

During this financial year, the director I Smith cleared the interest free loan balance of £526,555 by way of interim dividend in the amount of £990,099.

28
Controlling party

The ultimate controlling party is Mr I Smith by virtue of his shareholding.

SMITH CONSTRUCTION GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 32 -
29
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
2,313,703
2,259,514
Adjustments for:
Taxation charged
577,639
660,152
Finance costs
26,660
30,195
Investment income
(8,530)
(355)
Gain on disposal of tangible fixed assets
(349,152)
(69,213)
Depreciation and impairment of tangible fixed assets
752,286
832,397
Movements in working capital:
Decrease/(increase) in stocks
51,607
(52,422)
Decrease/(increase) in debtors
752,216
(389,615)
Increase in creditors
783,914
95,370
Cash generated from operations
4,900,343
3,366,023
30
Analysis of changes in net funds - group
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
8,574,758
1,537,778
10,112,536
Borrowings excluding overdrafts
(616,253)
65,424
(550,829)
7,958,505
1,603,202
9,561,707
31
Analysis of changes in net funds - company
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
8,553,781
1,276,646
9,830,427
Borrowings excluding overdrafts
(616,253)
65,424
(550,829)
7,937,528
1,342,070
9,279,598
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