Company registration number 03231247 (England and Wales)
PKF SMITH COOPER AUDIT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
PAGES FOR FILING WITH REGISTRAR
PKF SMITH COOPER AUDIT LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 9
PKF SMITH COOPER AUDIT LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 1 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
5
229,658
318,462
Tangible assets
6
1,241,776
986,871
1,471,434
1,305,333
Current assets
Debtors
7
9,270,151
8,708,859
Cash at bank and in hand
1,839
2,174
9,271,990
8,711,033
Creditors: amounts falling due within one year
8
(9,904,770)
(9,537,431)
Net current liabilities
(632,780)
(826,398)
Total assets less current liabilities
838,654
478,935
Creditors: amounts falling due after more than one year
9
(212,179)
(3,232)
Provisions for liabilities
10
(467,991)
(459,094)
Net assets
158,484
16,609
Capital and reserves
Called up share capital
11
100
100
Profit and loss reserves
158,384
16,509
Total equity
158,484
16,609
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered 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 22 November 2024 and are signed on its behalf by:
Mr J Bagley
Director
Company registration number 03231247 (England and Wales)
PKF SMITH COOPER AUDIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
1
Accounting policies
Company information
PKF Smith Cooper Audit Limited is a private company limited by shares incorporated in England and Wales. The registered office is Prospect House, 1 Prospect Place, Pride Park, Derby, United Kingdom, DE24 8HG.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 Directors remain confident that the company is well placed to mitigate any additional risks arising. The Directors believe strong cash reserves held and additional funding available to the company are sufficient to provide additional levels of risk mitigation such that the Directors are confident that current economy will not adversely affect the on-going viability of the company.
1.2
Going concern
The directors have prepared budgets and cashflow forecasts to March 2025 on an individual and group level and up to date management accounts and consider that the group will continue to operate within its overdraft facility for 12 months from the date of signing the Balance Sheet. The overdraft facility is due for renewal in July 2025 and there is no reason to believe that it will not be extended.true
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Turnover is recognised when the right to income for services provided arises.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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 10-15 years.
1.5
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.
PKF SMITH COOPER AUDIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 3 -
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:
Land and buildings
straight line over 10 years
Fixtures and fittings
straight line over 10 years
Computers
25% reducing balance, straight line over 4 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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.
PKF SMITH COOPER AUDIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 4 -
1.9
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense,
1.11
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The directors have reviewed the assets lives and associated residual values of all fixed asset classes and have concluded that assets lives and residual values are appropriate.
Gross amounts owed by contract customers
Revenue in relation to unbilled time is recognised in the financial statements based upon the judgement of management in respect of expected ultimate recoverability. In undertaking this assessment, historical recovery rates are considered and applied.
3
Change in accounting estimate
Management have re-assessed the amortisation period applied to goodwill and have determined that the remaining goodwill net book value as at 1 April 2023 will be amortised over 5 years. This will result in a reduced annual amortisation charge of £149,532 for the year ended 31 March 2024.
PKF SMITH COOPER AUDIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Total
5
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2023 and 31 March 2024
3,087,068
Amortisation
At 1 April 2023
2,768,606
Amortisation charged for the year
88,804
At 31 March 2024
2,857,410
Carrying amount
At 31 March 2024
229,658
At 31 March 2023
318,462
6
Tangible fixed assets
Leasehold improvements
Office equipment
Total
£
£
£
Cost
At 1 April 2023
802,618
1,297,239
2,099,857
Additions
262,907
217,116
480,023
Disposals
(5,369)
(22,122)
(27,491)
At 31 March 2024
1,060,156
1,492,233
2,552,389
Depreciation and impairment
At 1 April 2023
395,438
717,548
1,112,986
Depreciation charged in the year
60,610
150,724
211,334
Eliminated in respect of disposals
(13,707)
(13,707)
At 31 March 2024
456,048
854,565
1,310,613
Carrying amount
At 31 March 2024
604,108
637,668
1,241,776
At 31 March 2023
407,180
579,691
986,871
PKF SMITH COOPER AUDIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 6 -
7
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,475,596
1,042,662
Gross amounts owed by contract customers
297,898
259,521
Corporation tax recoverable
291,186
Amounts owed by group undertakings
1,289,666
1,341,666
Other debtors
5,370,229
5,137,763
Prepayments and accrued income
836,762
636,061
9,270,151
8,708,859
8
Creditors: amounts falling due within one year
2024
2023
£
£
Bank loans and overdrafts
1,891,553
1,919,981
Trade creditors
674,695
512,498
Amounts owed to group undertakings
1,310,476
1,689,076
Corporation tax
160,854
Other taxation and social security
118,581
Other creditors
5,748,611
5,415,876
9,904,770
9,537,431
The bank facilities are secured by cross guarantees and debentures held by PKF Smith Cooper Holdings Ltd, SHH101 LLP, SHH102 LLP, Infuse Technology Ltd, PKF Smith Cooper Ltd, Smith Cooper Audit Services Holdings Ltd, SC Audit and Assurance Services Ltd, PKF SC Advisory Ltd and PKF Smith Cooper Systems Ltd, all of whom are related parties.
Included in other creditors are directors' current account balances of £337,388 (2023: £1,350,074), balances owed to current and former partners amounting to £743,874 (2023: £1,098,074), and hire purchase liability of £3,232 (2023: £19,393). The hire purchase contracts are secured on the assets to which they relate.
9
Creditors: amounts falling due after more than one year
2024
2023
£
£
Bank loans and overdrafts
212,179
Other creditors
3,232
212,179
3,232
The hire purchase contracts are secured on the assets to which they relate.
PKF SMITH COOPER AUDIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
10
Provisions for liabilities
2024
2023
£
£
Claims provisions
75,000
75,000
Dilapidation provisions
207,785
198,888
282,785
273,888
Deferred tax liabilities
185,206
185,206
467,991
459,094
Claims provisions
The company maintains professional indemnity insurance and premiums are expensed as they fall due. Reimbursements are recognised when it is virtually certain that reimbursement will be received. When a potential outflow of resources becomes probable and can be reliably estimated, it is included with the claims provision. The inherently subjective nature of the issues involved means that the timing of the utilisation of those provisions is inherently difficult to predict. No details of all known claims and regulatory matters for which a provision has been recognised have been given, as to do so would be potentially prejudicial to the interests of the company. For the same reason, the basis upon which the provisions have been measured, together with uncertainties relating to the range of possible outcomes, have also not been disclosed. Where a claim against the company identifies an opportunity to enhance internal processes, appropriate action is undertaken to ensure the control and governance framework remains robust, remedial actions are identified and resolved, and the risk of similar incidents occurring in the future is remote.
11
Called up share capital
2024
2023
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary share capital of £1 each
100
100
12
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Daniel Sowden
Statutory Auditor:
BHP LLP
Date of audit report:
26 November 2024
PKF SMITH COOPER AUDIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
13
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2024
2023
£
£
3,230,721
3,083,520
PKF SMITH COOPER AUDIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
14
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Management Charge Income
Management Charge Costs
2024
2023
2024
2023
£
£
£
£
Entities with control, joint control or significant influence over the company and other entities of which the parent has significant influence over
2,951,998
2,799,708
4,786,001
2,780,570
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company and other entities of which the parent has significant influence over
4,183,787
2,792,355
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company and other entities of which the parent has significant influence over
5,369,452
5,760,132
15
Parent company
The ultimate parent company of PKF Smith Cooper Audit Limited is SHH102 LLP, a limited liability partnership incorporated in England and Wales. SHH102 LLP's financial statements are available from the registered office of Prospect House, 1 Prospect Place, Derby, DE24 8HG.
16
Related party disclosures
The company has taken advantage of the exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
17
Prior period adjustment
Comparative figures for debtors and creditors in the financial statements have been reclassified to ensure comparability with the current period.
Reconciliation of changes in equity
The prior period adjustments do not give rise to any effect upon equity.
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