Company registration number 07445403 (England and Wales)
SMA SOLAR UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SMA SOLAR UK LIMITED
COMPANY INFORMATION
Directors
SMA Benelux
J Eillebrecht
Company number
07445403
Registered office
Countrywide House
23 West Bar
Banbury
Oxfordshire
OX16 9SA
Accountants
Ellacotts Audit Services Limited
Countrywide House
23 West Bar
Banbury
Oxfordshire
OX16 9SA
SMA SOLAR UK LIMITED
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 5
Income statement
6
Statement of financial position
7
Statement of changes in equity
8
Notes to the financial statements
9 - 20
SMA SOLAR UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present their report and audited financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company during the year was to act as a sales agent in the renewable energy sector for its parent company SMA Solar Technology AG who design and manufacture photovoltaic inverters (PV) and monitoring equipment.
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. 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:
SMA Benelux
J Eillebrecht
Auditor
Ellacotts audit services limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
SMA SOLAR UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
J Eillebrecht
Director
20 September 2024
SMA SOLAR UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMA SOLAR UK LIMITED
- 3 -
Opinion
We have audited the financial statements of SMA Solar UK Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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:
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
SMA SOLAR UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMA SOLAR UK LIMITED (CONTINUED)
- 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 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, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
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.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK),we exercise professional judgment and maintain professional scepticism throughout the audit. We also performed the following procedures:
Enquiry of management and those charged with governance around actual and potential litigation and claims.
Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
Reviewing minutes of meetings of those charged with governance.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Auditing the risk of management override of controls, including testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
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.
SMA SOLAR UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMA SOLAR UK LIMITED (CONTINUED)
- 5 -
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.
Charlotte Toemaes BSc FCA (Senior Statutory Auditor)
For and on behalf of Ellacotts Audit Services Limited
Chartered Accountants
Statutory Auditor
Countrywide House
23 West Bar
Banbury
Oxfordshire
OX16 9SA
20 September 2024
SMA SOLAR UK LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
2023
2022
Notes
£
£
Revenue
3,264,160
2,231,435
Cost of sales
(99,643)
(244,867)
Gross profit
3,164,517
1,986,568
Distribution costs
(172,215)
(140,067)
Administrative expenses
(2,528,354)
(1,663,389)
Operating profit
3
463,948
183,112
Investment income
5
32,827
5,301
Finance costs
6
(3,554)
(1,789)
Profit before taxation
493,221
186,624
Tax on profit
7
(110,641)
(35,114)
Profit and total comprehensive income for the financial year
382,580
151,510
The income statement has been prepared on the basis that all operations are continuing operations.
SMA SOLAR UK LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 7 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
8
218,927
202,243
Current assets
Trade and other receivables
9
516,531
222,484
Cash and cash equivalents
1,269,675
870,949
1,786,206
1,093,433
Current liabilities
10
(539,263)
(205,679)
Net current assets
1,246,943
887,754
Total assets less current liabilities
1,465,870
1,089,997
Non-current liabilities
10
(78,172)
(90,300)
Provisions for liabilities
Deferred tax liabilities
13
(10,000)
(4,579)
Net assets
1,377,698
995,118
Equity
Called up share capital
15
85,000
85,000
Retained earnings
1,292,698
910,118
Total equity
1,377,698
995,118
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 20 September 2024 and are signed on its behalf by:
J Eillebrecht
Director
Company registration number 07445403 (England and Wales)
SMA SOLAR UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 January 2022
85,000
758,608
843,608
Year ended 31 December 2022:
Profit and total comprehensive income
-
151,510
151,510
Balance at 31 December 2022
85,000
910,118
995,118
Year ended 31 December 2023:
Profit and total comprehensive income
-
382,580
382,580
Balance at 31 December 2023
85,000
1,292,698
1,377,698
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
1
Accounting policies
Company information
SMA Solar UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Countrywide House, 23 West Bar, Banbury, Oxfordshire, OX16 9SA. The company's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.
The company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;
the requirement in paragraph 38 of IAS 1 ‘Presentation of Financial Statements’ to present comparative information in respect of: (i) paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant and Equipment (iii) paragraph 118 (e) of IAS 38 Intangibles Assets, (iv) paragraphs 76 and 79(d) of IAS 40 Investment Property and (v) paragraph 50 of IAS 41 Agriculture;
the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 39 to 40 ,111 and 134-136 of IAS 1 Presentation of Financial Statements;
the requirements of IAS 7 Statement of Cash Flows;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
the requirements of paragraph 17 of IAS 24 Related Party Disclosures; and
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to share based payments, financial instruments, capital management, presentation of a cash flow statement, presentation of comparative information in respect of certain assets, standards not yet effective, impairment of assets, business combinations, discontinued operations and related party transactions.
Where required, equivalent disclosures are given in the group accounts of SMA Solar Technology AG. The group accounts of SMA Solar Technology AG may be obtained from the Company Secretary at Sonnenallee 1,34266 Niestetal; Germany.
1.2
Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
The turnover shown in the profit and loss account represents the value of work completed and services provided during the year excluding VAT.
The company's turnover is derived from sales commission and service work receivable from its parent company SMA Solar Technology AG, in relation to UK related sales.
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 10 -
1.4
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
Over life of lease
Fixtures, fittings & equipment
20% straight line basis
Plant and machinery
20% straight line basis
Leasehold motor vehicles
Over life of lease
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
1.5
Impairment of tangible and intangible assets
At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.6
Cash and cash equivalents
Cash at bank and cash in hand are basic financial assets and include cash 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.
1.7
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
Impairment of financial assets
Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.8
Financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Deferred tax
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only to the extent that, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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 inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
The company operates defined contribution schemes for its employees. The assets of the schemes are held separately from those of the company. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the schemes.
1.13
Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Critical accounting estimates and judgements
(Continued)
- 14 -
Key sources of estimation uncertainty
Leasing
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the company:
Where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received;
Uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the company, which does not have recent third party financing; and
Makes adjustments specific to the lease, e.g. term, currency and security.
The company used incremental borrowing rates specific to each lease with an average rate of 4.5%. A 100-basis point increase/(decrease) in the rate would cause the lease liabilities to (reduce)/increase by £100,000 and a corresponding (decrease)/increase in the right-of-use assets by substantially the same amount.
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
78
(246)
Depreciation of property, plant and equipment
123,761
120,384
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
21
17
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Employees
(Continued)
- 15 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,194,192
766,687
Social security costs
135,693
95,951
Pension costs
57,686
49,464
1,387,571
912,102
5
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
32,827
5,301
6
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on lease liabilities
3,554
1,789
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
105,220
34,467
Deferred tax
Origination and reversal of temporary differences
5,421
647
Total tax charge
110,641
35,114
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
(Continued)
- 16 -
The charge for the year can be reconciled to the profit per the income statement as follows:
2023
2022
£
£
Profit before taxation
493,221
186,624
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
116,006
35,459
Effect of expenses not deductible in determining taxable profit
760
Permanent capital allowances in excess of depreciation
56
(90)
Deferred tax adjustment
(5,421)
647
Pension creditor
-
(1,662)
Taxation charge for the year
110,641
35,114
8
Property, plant and equipment
Leasehold land and buildings
Plant and machinery
Fixtures, fittings & equipment
Leasehold motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
166,808
102,416
1,520
124,507
395,251
Additions
30,916
109,529
140,445
Disposals
(27,567)
(27,567)
At 31 December 2023
166,808
133,332
1,520
206,469
508,129
Accumulated depreciation and impairment
At 1 January 2023
41,703
83,078
760
67,467
193,008
Charge for the year
55,603
9,997
507
57,654
123,761
Eliminated on disposal
(27,567)
(27,567)
At 31 December 2023
97,306
93,075
1,267
97,554
289,202
Carrying amount
At 31 December 2023
69,502
40,257
253
108,915
218,927
At 31 December 2022
125,105
19,338
760
57,040
202,243
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
9
Trade and other receivables
2023
2022
£
£
Trade receivables
55,996
27,278
VAT recoverable
25,174
29,725
Amount owed by parent undertaking
386,237
104,161
Other receivables
8,358
11,616
Prepayments and accrued income
40,766
49,704
516,531
222,484
10
Liabilities
Current
Non-current
2023
2022
2023
2022
Notes
£
£
£
£
Trade and other payables
11
302,085
84,010
Corporation tax
99,687
9,467
-
-
Other taxation and social security
35,021
19,184
-
-
Lease liabilities
12
102,470
93,018
78,172
90,300
539,263
205,679
78,172
90,300
11
Trade and other payables
2023
2022
£
£
Trade payables
35,706
42,053
Payments received on account
17,117
16,787
Amount owed to parent undertaking
20,584
5,200
Accruals and deferred income
228,678
19,970
302,085
84,010
12
Lease liabilities
2023
2022
Maturity analysis
£
£
Within one year
102,471
93,018
In two to five years
78,171
90,300
Total undiscounted liabilities
180,642
183,318
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Lease liabilities
(Continued)
- 18 -
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2023
2022
£
£
Current liabilities
102,470
93,018
Non-current liabilities
78,172
90,300
180,642
183,318
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
3,554
1,789
Other leasing information is included in note 16.
13
Deferred taxation
Liabilities
2023
2022
£
£
Deferred tax balances
10,000
4,579
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Accelerated capital allowances
£
Liability at 1 January 2022
3,931
Deferred tax movements in prior year
Charge/(credit) to profit or loss
648
Liability at 1 January 2023
4,579
Deferred tax movements in current year
Charge/(credit) to profit or loss
5,421
Liability at 31 December 2023
10,000
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Deferred taxation
(Continued)
- 19 -
Deferred tax assets and liabilities are offset in the financial statements only where the company has a legally enforceable right to do so.
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
57,686
49,464
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.
15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
85,001
85,001
85,000
85,000
16
Other leasing information
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:
2023
2022
Depreciation on capitalised leases
£
£
Within one year
113,257
141,407
2023
2022
Interest on leases
£
£
Within one year
3,554
1,789
Information relating to lease liabilities is included in note 12.
17
Related party transactions
Remuneration of key management personnel
In the opinion of the directors there are no other members of key management personnel other than the directors. There was no remuneration paid to directors during the year.
As permitted by FRS101, related party transactions with wholly owned members of the SMA Solar Technology AG Group have not been disclosed.
SMA SOLAR UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
18
Controlling party
The immediate parent company and ultimate holding company is SMA Solar Technology AG, a company incorporated in Germany. The results of SMA Solar UK Limited and its fellow subsidiaries have been consolidated within the financial statements of SMA Solar Technology AG. Copies of these financial statements may be obtained from the Company Secretary at Sonnenallee 1,45266 Niestetal; Germany.
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