Company registration number 01263542 (England and Wales)
SIMNAT PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
SIMNAT PLC
COMPANY INFORMATION
Directors
A. Fraser
C.S.J. Fraser
P. Fraser
N.A. Fraser
Secretary
C.S.J. Fraser
Company number
01263542
Registered office
39 Hatton Garden
London
United Kingdom
EC1N 8EH
Auditor
Goodman Jones LLP
1st Floor Arthur Stanley House
40-50 Tottenham Street
London
United Kingdom
W1T 4RN
Business address
39 Hatton Garden
London
EC1N 8EL
Bankers
HSBC Bank Plc
165 Fleet Street
London
EC4A 2DY
SIMNAT PLC
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 20
SIMNAT PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -
The directors present the strategic report for the year ended 31 May 2024.
Review of the business
The company once again achieved a satisfactory return on its trading activity during the year. Gross rental income increased compared to the prior year due to increased occupancy and rental increases. The directors look to further growth in the current year.
Principal risks and uncertainties
The company's main operations are dependent on the residential property market. The company will continue to have some exposure to uncertainties regarding interest rate fluctuations, but these risks are limited due to the company's very low gearing. It is more exposed, in the current market, to the general economic environment and its possible impact on the ability of tenants, to continue meeting lease obligations and ongoing registry costs.
Key performance indicators
Our performance indicators are:
Net loss of £374,839 (2023: £890,428 profit).
Rental income as a percentage of the property value is 4.43% (2023: 4.18%),
SIMNAT PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
Section 172 of The Companies Act
The Directors must act in accordance with a set of general duties outlined in Section 172 of the Companies Act 2006. The Directors must demonstrate that they act in good faith and promote the success of the Company for the benefit of its stakeholders. Examples of how the Directors respond to these requirements are:
Section 172: The likely consequences of any decision in the long term
The Company's strategic plan is closely monitored by the directors. Consideration of risks and opportunities are also reviewed throughout the year, The Company's strategic programmes focus on optimising delivery of strategic objectives in the longer term.
Section 172: The interests of the Company’s employees
The company has limited employees which allows the directors to ensure all employees needs are met.
Section 172: The need to foster the Company’s business relationships with suppliers, customers and others
The Company maintains regular contact with frequent suppliers and tenants. The Company seeks the promotion and application of certain general principles in such relationships.
Section 172: The impact of the Company’s operations on the community and the environment
The Company recognises its responsibility to consider its impact on the environment through its direct operations and indirectly through its supply chain.
Section 172: The desirability of the Company maintaining a reputation for high standards of business conduct, and the need to act fairly between members of the Company
The Company has a clear Code of Conduct and framework of Policies and Procedures to support the highest standards of business conduct, integrity and adherence to regulatory requirements..
Section 172: the need to act fairly as between the members of the company
In approving the Company's annual financial statements, the Directors carefully review the financial statements and duly consider a number of factors, including (but not limited to) any recommendations or observations from the board and/or the Company's auditors. To the extent that any operational or control recommendations are raised to the Directors, they are duly considered and discussed with the board and a course of action agreed, thereby facilitating a long-term approach by ensuring future good practice and having regard for the interests of the Company's shareholders in respect of the Company's financial efficacy.
A. Fraser
Director
14 February 2025
SIMNAT PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 May 2024.
Principal activities
The principal activity of the company is that of property developers and investors in residential property.
Results and dividends
The results for the year are set out on page 9.
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:
A. Fraser
C.S.J. Fraser
P. Fraser
N.A. Fraser
Financial instruments
The company's financial instruments comprise borrowing, cash and liquid resources, and various net working capital items, such as trade debtors and trade creditors. The main purpose of these financial instruments is to fund that part of the company's operations not financed by way of equity.
- It is the company's policy not to trade in financial or derivative instruments. The main risk in providing funds for the company relate to interest rates and liquidity.
Auditor
In accordance with the company's articles, a resolution proposing that Goodman Jones LLP be reappointed as auditor of the company will be put at a General Meeting.
Energy and carbon report
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
SIMNAT PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
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;
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.
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.
SIMNAT PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 5 -
On behalf of the board
A. Fraser
Director
14 February 2025
SIMNAT PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SIMNAT PLC
- 6 -
Opinion
We have audited the financial statements of Simnat Plc (the 'company') for the year ended 31 May 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 May 2024 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.
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 strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
SIMNAT PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SIMNAT PLC (CONTINUED)
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to industry sector regulations and unethical and prohibited business practices, and we considered the extent to which non compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and UK Tax Legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Appropriate audit procedures in response to these risks were carried out. These procedures included:
Discussions with management, including consideration of known or suspected instances of non compliance with laws and regulation and fraud;
Reading minutes of meetings of those charged with governance;
Obtaining and reading correspondence from legal and regulatory bodies including HMRC;
Identifying and testing journal entries;
Challenging assumptions and judgements made by management in their significant accounting estimates.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members; and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
SIMNAT PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SIMNAT PLC (CONTINUED)
- 8 -
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.
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.
Julian Flitter (Senior Statutory Auditor)
For and on behalf of Goodman Jones LLP, Statutory Auditor
Chartered Accountants
1st Floor Arthur Stanley House
40-50 Tottenham Street
London
W1T 4RN
United Kingdom
14 February 2025
SIMNAT PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
2024
2023
Notes
£
£
Revenue
-
-
Cost of sales
(60,456)
Gross profit/(loss)
-
(60,456)
Administrative expenses
(66,004)
(79,634)
Other operating income
700,027
881,616
Operating profit
634,023
741,526
Investment income
4
1,985
Finance costs
5
(183,990)
(142,156)
Other gains and losses
6
(826,857)
291,058
(Loss)/profit before taxation
(374,839)
890,428
Tax on (loss)/profit
7
80,998
(192,763)
(Loss)/profit for the financial year
(293,841)
697,665
The income statement has been prepared on the basis that all operations are continuing operations.
SIMNAT PLC
STATEMENT OF FINANCIAL POSITION
- 10 -
2024
2023
Notes
£
£
£
£
Non-current assets
Investment property
9
25,185,781
25,212,915
Current assets
Trade and other receivables
10
8,986
13,650
Cash and cash equivalents
69,188
15,657
78,174
29,307
Current liabilities
11
(3,902,196)
(3,392,605)
Net current liabilities
(3,824,022)
(3,363,298)
Total assets less current liabilities
21,361,759
21,849,617
Provisions for liabilities
Provisions
12
27,418
27,418
Deferred tax liability
13
2,113,023
2,307,040
(2,140,441)
(2,334,458)
Net assets
19,221,318
19,515,159
Equity
Called up share capital
15
50,000
50,000
Non-distributable profits reserve
9,536,921
10,169,762
Distributable retained earnings
9,634,397
9,295,397
Total equity
19,221,318
19,515,159
The financial statements were approved by the board of directors and authorised for issue on 14 February 2025 and are signed on its behalf by:
A. Fraser
N.A. Fraser
Director
Director
Company registration number 01263542 (England and Wales)
SIMNAT PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 11 -
Share capital
Non-distri-butable profits
Retained earnings
Total
£
£
£
£
Balance at 1 June 2022
50,000
9,951,469
8,816,025
18,817,494
Year ended 31 May 2023:
Profit and total comprehensive income
-
218,293
479,372
697,665
Balance at 31 May 2023
50,000
10,169,762
9,295,397
19,515,159
Year ended 31 May 2024:
Loss and total comprehensive income
-
(632,841)
339,000
(293,841)
Balance at 31 May 2024
50,000
9,536,921
9,634,397
19,221,318
SIMNAT PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
18
1,144,857
2,549,457
Interest paid
(183,990)
(142,156)
Income taxes paid
(119,998)
(121,828)
Net cash inflow from operating activities
840,869
2,285,473
Investing activities
Purchase of investment property
(799,723)
(2,326,449)
Repayment of loans
10,400
(10,400)
Interest received
1,985
Net cash used in investing activities
(787,338)
(2,336,849)
Net increase/(decrease) in cash and cash equivalents
53,531
(51,376)
Cash and cash equivalents at beginning of year
15,657
67,033
Cash and cash equivalents at end of year
69,188
15,657
SIMNAT PLC
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 13 -
1
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. The following judgement has had the most significant effect on the amounts recognised in the financial statements.
The investment property portfolio was valued at the balance sheet date. Of the total portfolio value, £18,530,780 was valued by one of the directors who is a qualified Charted Surveyor, and £6,655,000 was valued by Clark Trewick Charted Surveyors, based on open market value using knowledge and experience.
2
Accounting policies
Company information
Simnat Plc is a private company limited by shares incorporated in England and Wales. The registered office is , 39 Hatton Garden, London, United Kingdom, EC1N 8EH.
2.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
2.2
Going concern
The company is in a net current liability position. trueThe company meets its day to day working capital requirements through net rents received. The directors are satisfied that the company will have no cash flow restrictions in the next 12 months. Therefore the directors have prepared the accounts on a going concern basis.
2.3
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as property, plant and equipment.
2.4
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.
SIMNAT PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2
Accounting policies
(Continued)
- 14 -
2.5
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables 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.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
SIMNAT PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
2
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
2.6
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
2.7
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.
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.
2.8
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.
2.9
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
2.10
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
SIMNAT PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 16 -
3
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
9,500
9,000
4
Investment income
2024
2023
£
£
Interest income
Other interest income
1,985
5
Finance costs
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
183,990
142,156
6
Other gains and losses
2024
2023
£
£
Changes in the fair value of investment properties
(826,857)
291,058
7
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
113,019
119,998
Deferred tax
Origination and reversal of timing differences
(194,017)
72,765
Total tax (credit)/charge
(80,998)
192,763
SIMNAT PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
7
Taxation
(Continued)
- 17 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(374,839)
890,428
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
(93,710)
222,607
Tax effect of expenses that are not deductible in determining taxable profit
206,729
(58,112)
Effect of change in corporation tax rate
(44,496)
Indexation on Fair Value adjustments
(194,017)
72,764
Taxation (credit)/charge for the year
(80,998)
192,763
8
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Professional Staff
5
5
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
36,153
38,000
Social security costs
(4,833)
4,139
Pension costs
1,298
1,045
32,618
43,184
9
Investment property
2024
£
Fair value
At 1 June 2023
25,212,915
Additions through external acquisition
799,723
Net gains or losses through fair value adjustments
(826,857)
At 31 May 2024
25,185,781
SIMNAT PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
9
Investment property
(Continued)
- 18 -
The investment properties were valued on the basis of Individual Market Assessment (fair value) at the balance sheet date by directors of the company with reference to observable market transactions and 26% of the portfolio was independently valued by Clark Trewick Chartered Surveyors.
10
Trade and other receivables
2024
2023
Amounts falling due within one year:
£
£
Trade receivables
61
3,250
Other receivables
8,925
10,400
8,986
13,650
11
Current liabilities
2024
2023
£
£
Trade payables
2,298
4,748
Corporation tax
113,019
119,998
Other taxation and social security
37,016
36,455
Other payables
3,530,961
3,074,398
Accruals and deferred income
218,902
157,006
3,902,196
3,392,605
12
Provisions for liabilities
2024
2023
£
£
27,418
27,418
Movements on provisions:
£
At 1 June 2023 and 31 May 2024
27,418
SIMNAT PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
13
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Investment property revaluations
2,113,023
2,307,040
2024
Movements in the year:
£
Liability at 1 June 2023
2,307,040
Credit to profit or loss
(194,017)
Liability at 31 May 2024
2,113,023
The deferred tax liability set out above relates to the expected gains on the revaluation of investment properties. This liability is expected to reverse when the investment properties are sold.
14
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,298
1,045
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. There was no liability due (2023 - £Nil) at the year end date.
15
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000
SIMNAT PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 20 -
16
Related party transactions
An amount owed to a director was fully settled in the year £Nil (2023: £77,919). Interest of £5,025 (2023: £4,627) has been charged for the year in respect of this amount.
At the year end a partnership under the control of the directors was owed an amount of £998,713 (2023: £1,783,713). Interest of £70,250 (2023: £106,427) has been charged for the year. There is a fixed legal charge over one of the company's investment properties in relation to this creditor.
The partnership is owed an additional amount of £529,000 (2023: £491,000) by the company. Interest of £39,508 (2023: £26,693) has been charged for the year at base rate. The loan is repayable on demand.
Interest on all of the above loans is charged at 2.5% above base rate.
The partnership is owed an additional amount of £1,857,919 (2023: £600,000) by the company, which is secured upon the property held in investment properties by a fixed charge. Interest of £69,208 (2023: £16,979) has been charged for the year at base rate. The loan is repayable on demand.
17
Ultimate controlling party
The company is under the control of the directors.
18
Cash generated from operations
2024
2023
£
£
(Loss)/profit after taxation
(293,841)
697,665
Adjustments for:
Taxation (credited)/charged
(80,998)
192,763
Finance costs
183,990
142,156
Investment income
(1,985)
Fair value loss/(gain) on investment properties
826,857
(291,058)
Movements in working capital:
Decrease in inventories
2,060,456
(Increase)/decrease in trade and other receivables
(5,736)
2,715
Increase/(decrease) in trade and other payables
516,570
(255,240)
Cash generated from operations
1,144,857
2,549,457
19
Analysis of changes in net funds
1 June 2023
Cash flows
31 May 2024
£
£
£
Cash at bank and in hand
15,657
53,531
69,188
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