REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Smarta Water Limited |
REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Smarta Water Limited |
Smarta Water Limited (Registered number: 09896052) |
Contents of the Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 5 |
Report of the Independent Auditors | 7 |
Income Statement | 11 |
Other Comprehensive Income | 12 |
Balance Sheet | 13 |
Statement of Changes in Equity | 14 |
Cash Flow Statement | 15 |
Notes to the Cash Flow Statement | 16 |
Notes to the Financial Statements | 17 |
Smarta Water Limited |
Company Information |
for the Year Ended 31 December 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
116 Duke Street |
Liverpool |
Merseyside |
L1 5JW |
Smarta Water Limited (Registered number: 09896052) |
Strategic Report |
for the Year Ended 31 December 2023 |
The Directors of Smarta Water Limited are pleased to present their Strategic Report on the progression of the business, along with their Directors' Report, the Independent Auditor's Report and the audited financial statements for the year ended 31st December 2023. |
The principal activities of the Company is the provision retail services relating to water, sewerage and trade effluent services to commercial businesses and governmental organisations, together with advice on water efficiency services (leak detection and repair, water audits and benchmarking). |
The Company has a large and diverse customer base across England and Scotland serving a variety of business sectors, large industrial customers, household brands, small and medium sized enterprises. |
BUSINESS REVIEW AND KEY PERFORMANCE INDICATORS |
The financial results for the year reflect one of transformation for the Company. The Company has continued its success of performing well in the public sector after being awarded its second framework contract which has led to the increase in business growth. Furthermore, Smarta has managed to retain a number of public sector customers even after the initial framework it had won in 2022 had ended which points towards the quality and agility of Customer Service provided by the Team and the willingness to 'go the extra mile' to resolve customer issues. Smarta prides itself on the number of lasting relationships it has been built since its incorporation. |
Smarta will strive to continue to provide 'amazing' customer Service which will require us to continue to engage with those accounts that we can build a lasting relationship. A further development in the business during 2023 was to push the 'go-live' button on the implementation of a new CRM -Billing platform strategy. These types of transformational changes are always a challenge for smaller company with limited resources. Smarta Water has worked with its partners to develop an interface between two independent systems to enable a very agile platform. The transition impacted the performance of the business and affected its customer base primarily because of the delay to issuing bills. The transformation has impacted the level of working capital requirements and came at a cost to the income statement. However, at the time of generating this report the Directors can report that the first phase of the implementation of the system is fully completed with customer Service and financial performance back to where it should be. The next phase will be to develop the CRM - Billing Platform to provide a 360 degree view of the business and improve its customer Service |
The Company revenue grew by 35% to £35.4m for the year ended 31st December 2023 (2022: £26.3m). Gross margin during the same period fell to £0.94m (2.6%) from £1.17m (4.4%) reflecting the increased cost of delivery. |
Operating costs increased to £1.06m from £0.76m in the previous year reflecting the added transformational costs and increase in headcount. |
During 2023 Smarta Water secured funding of £3.2m in the form of secured loans (£1.4m) and a revolving credit facility secured on the debtor book (£1.8m). |
The Company generated a loss after tax of £90k which reflects the transformational cost to the business in the year however, the actions will place the Company in a good place for the future. |
Smarta Water Limited (Registered number: 09896052) |
Strategic Report |
for the Year Ended 31 December 2023 |
SECTION 172 (1) STATEMENT AND OUR STAKEHOLDERS |
We report here on how our Directors have performed their duty under Section 172 (s172) of the Companies Act2006. S172 sets out a series of matters to which Directors must have regard in performing their duty to promote the success of the Company for the benefit of its shareholders, which includes having regard to other stakeholders. |
Our Board considers it crucial that the Company maintains a reputation for high standards of business conduct. The Board is responsible for setting, monitoring and upholding the culture, values, standards, ethics, brand and reputation of the Company to ensure that our obligations to our shareholders, employees, customers and others are met, The Board monitors adherence to our policies and is committed to acting where our business fails to act in the manner we expect them. |
For each matter which comes to the Board, the board considers the likely consequence of any decision in the long term and identifies stakeholders who may be affected and carefully considers their interests and any potential impact as part of the decision-making process |
Our Team |
The Company engages with its employees on a frequent basis ensuring they given the best tools and training to perform their role and the opportunity to enhance their own personal development. The Company is very mindful of employees' wellbeing and support employees on an individual basis wherever and whenever possible. The Company will always recruit from within. |
Throughout the year, the Company continued to adopt a flexible approach to working from home or from the office. Smarta recruited additional staff to service the customer and to improve the Company's resilience |
PRINCIPAL RISKS AND UNCERTAINTIES |
The Company identifies and assess the impact of risk to the business using a standard risk register. Significant risks are identified and presented to the Board on a regular basis. |
ECONOMIC AND FINANCIAL PERFORMANCE RISK |
The Company faces uncertainties within the market as a result of macroeconomic factors (such as post COVID-19, cost of living crisis, higher inflation, higher interest rates etc). The UK economy remains a challenging market which has especially challenged some of our smaller customers and has impacted adversely on the Company's cost base following interest rate increases. Failure to deliver financial plans could impact on expected returns for shareholders and potentially the Company's trading license with OfWat. Rolling monthly forecast are maintained to monitor performance and reviewed regularly by the Board. The Company also maintains an open channel with OfWat so that issues are discussed at the earliest opportunity. Other key stakeholders such as banks are provided with all requested information. |
TECHNOLOGY AND DATA RISK |
The Company faces the loss of key business systems due to a malicious attack or failure of cyber-attack. Software and hardware access controls are in place, and we make use of additional web-based security. |
Timely access to accurate data is key to ensuring our customer are billed correctly and debt collection is efficient. Data strategy is a key business focus and is continuously reviewed to ensure best practice. |
REGULATION AND COMPLIANCE RISK |
The Company operates in a highly regulated environment. We continue to engage with OfWat on its strategic objectives |
Smarta Water Limited (Registered number: 09896052) |
Strategic Report |
for the Year Ended 31 December 2023 |
FINANCIAL RISK MANAGEMENT OBJECTIVIES |
The Directors have considered the Company's exposures to financial risk. As the company operates wholly within the United Kingdom the Directors do not believe its materially exposed to foreign currency risk. The principal risks are:- |
Interest rate risk - the Company has in place bank loans which are subject to movements in the Bank of England base rate. The Company was exposed to an increase in interest payments which adversely impacted the Company's results. At the time of the compiling this report the Bank of England base rate has fallen and economic indicators expect the rate to fall further over the next 12 months. |
Credit risk - there are no significant concentrations of credit risk within the Company. Customer specific risk is assessed by management |
The Company has increased its doubtful debt provision for the period of the accounts due to the ongoing impact of Covid-19 has had on businesses. |
Credit Support Notices - it is deemed that due to the relative size of the Company financially that a "bond" be provided to certain Wholesalers as a guarantee in case the Company defaults. The balance of the Credit support Notices increased from £2.57m to £3.08m at the end of 2023 hampering the growth potential. |
FUTURE DEVELOPMENTS |
Going forward, the Company will continue to focus on supporting its customer by developing lasting relationships and offering value added services to enable their own business can operate effectively. We expect the market to remain challenging. The Directors will continue to find an alternative funding source to fully release the requirement to provide Credit support Notices, which would improve liquidity and allow the business to grow to its full potential. |
Directors' assessment of going concern |
As at 31st December 2023 the Company had net current assets of £3.05m (2022: £0.58m). During that year the Company generated a loss after tax of £90k due to the costs of transformation. |
The Directors have reviewed the ongoing trading performance and forecasts and additionally the cash flow requirements in the light of the ongoing challenges in the macroeconomic environment. The Company is confident that that they will be able to meet future financing needs. |
Directors' assessment of going concern |
As at 31st December 2023 the Company had net current assets of £3.05m (2022: £0.58m). During that year the Company generated a loss after tax of £90k due to the costs of transformation. |
The Directors have reviewed the ongoing trading performance and forecasts and additionally the cash flow requirements in the light of the ongoing challenges in the macroeconomic environment. The Company is confident that that they will be able to meet future financing needs. |
ON BEHALF OF THE BOARD: |
Smarta Water Limited (Registered number: 09896052) |
Report of the Directors |
for the Year Ended 31 December 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
DIVIDENDS |
An interim dividend of £ |
The total distribution of dividends for the year ended 31 December 2023 will be £ |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
Other changes in directors holding office are as follows: |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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; |
- | 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
Smarta Water Limited (Registered number: 09896052) |
Report of the Directors |
for the Year Ended 31 December 2023 |
AUDITORS |
The auditors, Xeinadin Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Smarta Water Limited |
Opinion |
We have audited the financial statements of Smarta Water Limited (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
_ |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 |
The prior period financial statements have not been audited. Sufficient appropriate audit evidence regarding opening balances has been obtained. |
Report of the Independent Auditors to the Members of |
Smarta Water Limited |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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 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. |
Report of the Independent Auditors to the Members of |
Smarta Water Limited |
Auditors' 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 a Report of the Auditors 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. |
Identifying and Assessing Potential Risks Related to Irregularities |
Enquiring of management, including obtaining and reviewing supporting documentation concerning the company's policies and procedures relating to: |
Identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance |
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud |
the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations |
discussing among the engagement team including relevant internal specialists, including tax, valuations, pensions and IT regarding how and where fraud might occur in the financial statements and any potential indicators of fraud |
obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. The key laws and regulations we considered in this context included the Companies Act 2006, Pension legislation, Tax legislation, and Health and Safety requirements. |
Audit Response to Risks Identified |
In addition to the above, our procedures to respond to risks identified included the following: |
reviewing the Financial Statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations discussed above; |
enquiring of management concerning actual and potential litigation and claims; |
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and |
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Smarta Water Limited |
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 a Report of the Auditors 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. |
for and on behalf of |
116 Duke Street |
Liverpool |
Merseyside |
L1 5JW |
Smarta Water Limited (Registered number: 09896052) |
Income Statement |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
TURNOVER |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
OPERATING (LOSS)/PROFIT | 4 | ( |
) |
Interest receivable and similar income |
13,328 | 470,804 |
Interest payable and similar expenses | 5 |
(LOSS)/PROFIT BEFORE TAXATION | ( |
) |
Tax on (loss)/profit | 6 | ( |
) |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR |
( |
) |
Smarta Water Limited (Registered number: 09896052) |
Other Comprehensive Income |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
(LOSS)/PROFIT FOR THE YEAR | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
Smarta Water Limited (Registered number: 09896052) |
Balance Sheet |
31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 8 |
Tangible assets | 9 |
CURRENT ASSETS |
Debtors: amounts falling due within one year |
10 |
Debtors: amounts falling due after more than one year |
10 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 11 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
12 |
( |
) |
PROVISIONS FOR LIABILITIES | 15 | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 16 |
Retained earnings | 17 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
Smarta Water Limited (Registered number: 09896052) |
Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2023 |
Smarta Water Limited (Registered number: 09896052) |
Cash Flow Statement |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | ( |
) |
Interest paid | ( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities | ( |
) |
Cash flows from investing activities |
Purchase of intangible fixed assets | ( |
) | ( |
) |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
New loans in year |
Associates | - | 36,983 |
Equity dividends paid | ( |
) |
Net cash from financing activities |
Increase/(decrease) in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
16,205 |
Cash and cash equivalents at end of year |
2 |
387,719 |
13,630 |
Smarta Water Limited (Registered number: 09896052) |
Notes to the Cash Flow Statement |
for the Year Ended 31 December 2023 |
1. | RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31.12.23 | 31.12.22 |
£ | £ |
(Loss)/profit before taxation | ( |
) |
Depreciation charges |
Finance costs | 184,209 | - |
Finance income | (132,534 | ) | (63,276 | ) |
58,504 | 522,645 |
Increase in trade and other debtors | ( |
) | ( |
) |
Increase in trade and other creditors |
Cash generated from operations | ( |
) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£ | £ |
Cash and cash equivalents | 387,719 | 13,630 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 13,630 | 16,205 |
3. | ANALYSIS OF CHANGES IN NET FUNDS/(DEBT) |
At 1.1.23 | Cash flow | At 31.12.23 |
£ | £ | £ |
Net cash |
Cash at bank | 13,630 | 374,089 | 387,719 |
13,630 | 387,719 |
Debt |
Debts falling due within 1 year | - | (268,135 | ) | (268,135 | ) |
Debts falling due after 1 year | - | (2,810,717 | ) | (2,810,717 | ) |
- | (3,078,852 | ) | (3,078,852 | ) |
Total | 13,630 | (2,704,763 | ) | (2,691,133 | ) |
Smarta Water Limited (Registered number: 09896052) |
Notes to the Financial Statements |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Smarta Water Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Significant judgements and estimates |
There are no judgements (apart from those involving estimates) that have had a significant effect on amounts recognised in the financial statements. |
Turnover |
Turnover is derived from principal ordinary activities and is measured at the fair value of the consideration received or receivable from the collection, treatment and supply of water, excluding discounts, rebates, value added tax and other sales taxes. The company recognises revenue when the water is used. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Expenditure on development of billing system Chaarm is capitalised as website costs in the year in which it is incurred. Research costs to ensure the system was working correctly and was rebust were capitalised . The company has commenced amortisation of the deferred costs as the system has come into use. |
Amortisation is recognised so as to write the cost of the asset less their residual values over their useful lives on the following basis: |
Website costs | 20% straight line |
Licences | 20% straight line |
Tangible fixed assets |
Fixtures and fittings | - |
Smarta Water Limited (Registered number: 09896052) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The company has elected to apply the provisions of section 11 'Basic financial instrument's' and section 12' Other financial instrument's issues' of FRS 102 to all of its financial instrument's. |
Financial instrument's are recognised when the company becomes party to the contractual provisions of the instrument. |
Financial assets and liabilities are offset,with the net amounts presented in the financial statements, when there is 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 trade and other debtors, amounts due from group undertakings 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 constitute a financing transaction, where the financial asset is measured at the present value of the future receipts discounted at a market rate of interest. |
Impairment of financial assets |
Financial assets 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 estimates cash flows discounted at the asset's original effective interest rate. |
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 carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss. |
Derecognition of financial assets |
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and subsequently 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 party. |
Classification of financial liabilities |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
Basic financial liabilities |
Basic financial liabilities, including trade and other creditors, bank and other loans and amounts due to group undertakings, 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. |
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
Derecognition of financial liabilities |
Smarta Water Limited (Registered number: 09896052) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial liabilities are recognised when the company's contractual obligations are discharged, cancelled or they expire. |
Equity Instruments |
Equity instruments issued by the company are recorded at the fair value of proceeds received, net of direct issue costs. Dividend payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Goodwill |
Goodwill, being the amount paid in connection with the acquisition of a client list in 2019, is being amortised evenly over its estimated useful life of five years. |
3. | EMPLOYEES AND DIRECTORS |
31.12.23 | 31.12.22 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
Smarta Water Limited (Registered number: 09896052) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
3. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees during the year was as follows: |
31.12.23 | 31.12.22 |
Directors | 4 | 4 |
Administration | 4 | 3 |
31.12.23 | 31.12.22 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
4. | OPERATING (LOSS)/PROFIT |
The operating loss (2022 - operating profit) is stated after charging: |
31.12.23 | 31.12.22 |
£ | £ |
Hire of plant and machinery |
Other operating leases |
Depreciation - owned assets |
Goodwill amortisation |
Patents and licences amortisation |
Website development amortisation |
5. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.12.23 | 31.12.22 |
£ | £ |
Loan |
6. | TAXATION |
Analysis of the tax (credit)/charge |
The tax (credit)/charge on the loss for the year was as follows: |
31.12.23 | 31.12.22 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax | ( |
) |
Tax on (loss)/profit | ( |
) |
7. | DIVIDENDS |
31.12.23 | 31.12.22 |
£ | £ |
Ordinary shares of 1 each |
Interim |
Smarta Water Limited (Registered number: 09896052) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
8. | INTANGIBLE FIXED ASSETS |
Patents |
and | Website |
Goodwill | licences | development | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
At 31 December 2023 |
AMORTISATION |
At 1 January 2023 |
Amortisation for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
9. | TANGIBLE FIXED ASSETS |
Fixtures |
and | Computer |
fittings | equipment | Totals |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Depreciation charges are included in the Administrative Expenses in the Statement of Comprehensive Income. |
Smarta Water Limited (Registered number: 09896052) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
10. | DEBTORS |
31.12.23 | 31.12.22 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Amounts owed by associates |
Other debtors |
Supplier bonds | - | 2,572,076 |
VAT |
Deferred tax asset |
Prepayments and accrued income |
Amounts falling due after more than one year: |
Supplier Bonds | 3,075,910 | - |
Aggregate amounts |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Bank loans and overdrafts (see note 13) |
Trade creditors |
Tax |
Social security and other taxes |
Other creditors |
Accruals and deferred income |
Accrued expenses |
12. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Bank loans (see note 13) |
13. | LOANS |
Smarta Water Ltd has loans with two lenders at the balance sheet date include the following. |
Loan Amount | Interest rate | Maturity |
£2,609,981 | 4.15% | 2028 |
£500,000 | 1% | 2028 |
Smarta Water Limited (Registered number: 09896052) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
14. | SECURED DEBTS |
The following secured debts are included within creditors: |
31.12.23 | 31.12.22 |
£ | £ |
Bank loans |
Allica Bank ltd and TVC ltd provide finance in terms of a finance facility and a recovery loan scheme which is secured against Smarta Water Ltd trade receivables balance. |
15. | PROVISIONS FOR LIABILITIES |
The net deferred tax asset represents timing differences in respect of assets that are being depreciated at a rate lower than the tax writing down allowances, partially offset by a deferred tax asset arising on short term timing differences. |
The major deferred tax liabilities and assets recognised are: |
Company | Assets/(liabil ities | ) |
2023 |
Balance |
Short term timing differences | 317947 |
16. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.23 | 31.12.22 |
value: | £ | £ |
Ordinary | 1 | 100 | 100 |
17. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2023 |
Deficit for the year | ( |
) |
Dividends | ( |
) |
At 31 December 2023 |
18. | RELATED PARTY DISCLOSURES |
Included in debtors is £13 (2022: £13) due from companies associated with Smarta Water Limited. The loans are interest free and repayable on demand. |
During the year, a total of key management personnel compensation of £ |