REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JULY 2024 |
FOR |
S M S ENVIRONMENTAL LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JULY 2024 |
FOR |
S M S ENVIRONMENTAL LIMITED |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JULY 2024 |
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 |
Notes to the Financial Statements | 15 |
S M S ENVIRONMENTAL LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 JULY 2024 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditor |
First Floor, Davidson House |
Forbury Square |
Reading |
Berkshire |
RG1 3EU |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 JULY 2024 |
The directors present their strategic report for the year ended 31 July 2024. |
BUSINESS OVERVIEW |
SMS Environmental Ltd (SMS) provides water hygiene services to enable clients to meet their statutory obligations concerning Legionella control. |
In addition to this core service, SMS offers complementary products and services, including water treatment, water sampling, air sampling, air conditioning, ventilation hygiene, and plumbing remedial services. |
PERFORMANCE AND KEY DEVELOPMENTS |
The year was marked by strategic investments and operational improvements, setting SMS Environmental Ltd on a strong trajectory for future growth. Recruitment efforts expanded our capacity to meet increasing demand, and while this impacted profitability and cash flow earlier in the year, productivity gains in the latter months drove significant improvements in margins and revenues. |
Significant investments were also made in infrastructure, including new roles in Compliance, Recruitment, and HR, alongside upgrades to Finance and CRM systems. These enhancements were designed to improve operational efficiency and support the company's growth ambitions. |
In the latter part of the year, a renewed focus on regional operations led to the recruitment of a new Regional Management team. This team will play a pivotal role in delivering the company's key strategic objectives for the coming year, including maintaining quality, improving staff retention, driving efficiency, and expanding the delivery of complementary services. |
By year-end, the business had streamlined its workforce, increased productivity, and positioned itself to capitalise on new business opportunities, ensuring a robust foundation for the future. |
PRINCIPAL RISKS AND UNCERTAINTIES |
Several factors present risks and uncertainties that could impact SMS Environmental Ltd's operations and financial performance in the year ahead. A significant challenge is the upcoming increase in employer National Insurance contributions, effective from April 2025, which will substantially raise our cost base and place additional pressure on margins and profitability. |
With the shift in government, the new Labour administration is expected to introduce changes to employment laws and regulations. These changes may require adjustments to our operations and compliance processes, with potential cost implications, particularly in areas such as employee benefits, working conditions, and health and safety standards. |
The risks of ongoing inflation and potential recession also introduce uncertainty, particularly with regard to increasing input costs and the broader economic slowdown. While our services are considered a compliance purchase and thus somewhat insulated from economic instability in terms of demand, the rising costs associated with inflation and regulatory changes will impact our operational costs. |
To mitigate rising costs, SMS Environmental Ltd will focus on driving operational efficiencies through technology and automation and optimising resource use. We will explore flexible workforce models, renegotiate supplier contracts, and review our pricing strategy to ensure we are offering value while protecting margins. Additionally, investing in employee training, fostering a culture of continuous improvement, and forming strategic partnerships will help manage costs effectively. These initiatives will be key to maintaining profitability and sustaining growth despite external economic pressures. |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 JULY 2024 |
ECONOMIC AND MARKET ENVIRONMENTS |
The economic environment continues to present challenges across all sectors in which we operate, with widespread budgetary constraints influencing decision-making. This is particularly evident in the public sector, where tight budgets are leading organisations to reassess their spending priorities. |
As a compliance-driven service, water hygiene and Legionella control may not always be prioritised, especially when weighed against other pressing needs. This shift in focus can lead to a growing emphasis on cost over quality in procurement decisions, potentially affecting demand for premium services like ours, which prioritise excellence, reliability, and comprehensive compliance. |
While this presents a challenge, it also underscores the importance of reinforcing the critical nature of our services. By continuing to educate clients on the risks associated with inadequate water hygiene measures and demonstrating the long-term value of our high-quality services, we aim to maintain our market position despite these headwinds. |
At the same time, advancements in technology, particularly remote monitoring solutions, are reshaping the water hygiene industry. Remote monitoring enables real-time tracking of water quality and system performance, providing clients with greater visibility and assurance of compliance, while reducing the need for frequent site visits. Recognising this trend, we are strategically exploring and investing in these technologies to enhance our service offerings. |
By integrating remote monitoring into our solutions, we aim to provide cost-effective, efficient, and innovative services that address budgetary constraints, while maintaining the high standards of quality and compliance for which we are known. This approach not only strengthens our value proposition but also positions us as forward-thinking leaders in the industry. |
STRATEGY AND OBJECTIVES |
SMS's key strategic priorities are centred on delivering a quality service that distinguishes us from the competition, attracting and retaining top talent, and expanding the delivery of complementary services. All of this is underpinned by the goal of improving operational efficiency across all areas of the business, ensuring we have the solid foundations needed to grow sustainably and make a meaningful impact on the water treatment industry. |
FUTURE OUTLOOK |
Looking ahead, SMS Environmental Ltd is focused on building on the progress made in the past year while navigating economic challenges such as rising costs and regulatory changes. We will continue to prioritise operational efficiency, leveraging technology, improving workforce productivity, and optimising our cost base to protect margins. Strategic investments in our Regional Management team will be crucial to driving key objectives such as quality, staff retention, and the expansion of complementary services. With a solid foundation in place, we are well-positioned to capitalise on emerging opportunities and ensure sustainable success in the years to come. |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 JULY 2024 |
KEY PERFORMANCE INDICATORS (KPI'S) |
SMS tracks the following KPIs to measure performance and progress against strategic goals: |
Financial KPIs |
Revenue Growth: £13.45m (2024), up 23.1% from £10.93m (2023). |
Gross Profit Margin: 47.4% (2024), up from 45.7% (2023). |
Operating Profit: £551,472 (2024), down from £690,253 (2023) |
Non-Financial KPIs |
Customer Satisfaction: Target 90%+ NPS |
Employee Retention: Target 85% |
Compliance: 100% adherence to Legionella control regulations |
Health and Safety: Target zero reportable incidents |
Environmental Impact: Reduce carbon footprint by 5% annually |
ON BEHALF OF THE BOARD: |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 JULY 2024 |
The directors present their report with the financial statements of the company for the year ended 31 July 2024. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of water collection, treatment and supply. |
DIVIDENDS |
The total distribution of dividends for the year ended 31 July 2024 was £274,000. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 August 2023 to the date of this report. |
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. |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 JULY 2024 |
AUDITORS |
The auditors, Cooper Parry Group Limited, were appointed as auditor to the Company in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
S M S ENVIRONMENTAL LIMITED |
Opinion |
We have audited the financial statements of S M S Environmental Limited (the 'company') for the year ended 31 July 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and 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 July 2024 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
S M S ENVIRONMENTAL LIMITED |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
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 |
S M S ENVIRONMENTAL 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
We obtained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates. We determined that the following laws and regulations were most significant: FRS102 - the Financial Reporting Standard applicable in the UK & The Republic of Ireland, the Companies Act 2006 and relevant tax compliance regulations in the UK. |
We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making enquiries of management. |
We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, by meeting with management to understand where management considered there was susceptibility to fraud. Audit procedures performed by the audit team included: |
- | Challenging assumptions and judgements made by management in its significant accounting estimates; |
- | Identifying and testing journal entries, with a focus on entries made with unusual accounting combinations; |
- | Confirming with management whether they have knowledge of any actual, suspected or illegal fraud; |
- | Evaluating whether there was evidence of bias by management that represents a risk of material misstatement due to fraud. |
These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. |
Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance with all laws and regulations. |
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 |
S M S ENVIRONMENTAL 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 |
Statutory Auditor |
First Floor, Davidson House |
Forbury Square |
Reading |
Berkshire |
RG1 3EU |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 JULY 2024 |
2024 | 2023 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
550,972 | 688,781 |
Other operating income |
OPERATING PROFIT | 5 |
Interest receivable and similar income |
567,493 | 703,018 |
Interest payable and similar expenses | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 JULY 2024 |
2024 | 2023 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
BALANCE SHEET |
31 JULY 2024 |
2024 | 2023 |
Notes | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 |
Tangible assets | 10 |
CURRENT ASSETS |
Debtors | 11 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
13 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 17 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Share premium | 19 |
Retained earnings | 19 |
SHAREHOLDERS' FUNDS |
The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 JULY 2024 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 August 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | - |
Balance at 31 July 2023 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | - |
Balance at 31 July 2024 |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JULY 2024 |
1. | STATUTORY INFORMATION |
S M S Environmental Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
The financial statements are rounded to the nearest £. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows. |
Revenue |
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised: |
Sale of goods |
Revenue from the sale of goods is recognised when all of the following conditions are satisfied: |
- | the Company has transferred the significant risks and rewards of ownership to the buyer; |
- | the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; |
- | the amount of revenue can be measured reliably; |
- | it is probable that the Company will receive the consideration due under the transaction; and |
- | the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Rendering of services |
Revenue from a contract to provide services is recognised in the period in which the services are |
provided in accordance with the stage of completion of the contract when all of the following |
conditions are satisfied: |
- | the amount of revenue can be measured reliably; |
- | it is probable that the Company will receive the consideration due under the contract; |
- | the stage of completion of the contract at the end of the reporting period can be measured reliably; and |
- | the costs incurred and the costs to complete the contract can be measured reliably. |
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. |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. |
Depreciation is provided on the following basis: |
Improvements to property | - | 15% Straight line |
Plant and machinery | - | 25% Straight line |
Computer equipment | - | 33% Straight line |
Other fixed assets | - | 33% Straight line |
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss. |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
2. | ACCOUNTING POLICIES - continued |
Debtors |
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. |
Cash and cash equivalents |
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
Financial instruments |
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares. |
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially, and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan. |
Creditors |
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. |
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. |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
2. | ACCOUNTING POLICIES - continued |
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. |
Operating leases |
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the |
lease term. |
Benefits received and receivable as an incentive to sign an operating lease are recognised on a |
straight-line basis over the lease term, unless another systematic basis is representative of the time |
pattern of the lessee's benefit from the use of the leased asset. |
Leased assets |
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period. |
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. |
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations. |
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds. |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
2. | ACCOUNTING POLICIES - continued |
Finance costs |
Finance costs are charged to profit or loss over the term of the debt using the effective interest |
method so that the amount charged is at a constant rate on the carrying amount. Issue costs are |
initially recognised as a reduction in the proceeds of the associated capital instrument. |
Dividends |
Equity dividends are recognised when they become legally payable. Interim equity dividends are |
recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. |
Interest income |
Interest income is recognised in profit or loss using the effective interest method. |
Borrowing costs |
All borrowing costs are recognised in profit or loss in the year in which they are incurred. |
Provisions for liabilities |
Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation. |
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. |
When payments are eventually made, they are charged to the provision carried in the Balance Sheet. |
Holiday pay accrual |
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date. |
Critical accounting judgements and key sources of estimation uncertainty |
Preparation of the financial statements can require management to make judgements and estimates, although none are considered to be significant. The areas where these have been made include the provision for doubtful debt and the useful economic life of fixed assets. |
3. | TURNOVER |
All turnover is generated within the United Kingdom. |
4. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
4. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees during the year was as follows: |
2024 | 2023 |
Management | 13 | 13 |
Operations/services | 171 | 152 |
Accounts/finance | 27 | 22 |
2024 | 2023 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
Information regarding the highest paid director is as follows: |
2024 | 2023 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
5. | OPERATING PROFIT |
The operating profit is stated after charging: |
2024 | 2023 |
£ | £ |
Hire of plant and machinery |
Other operating leases |
Depreciation - owned assets |
Computer software amortisation |
Auditors' remuneration |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2024 | 2023 |
£ | £ |
Other loan interest |
Hire purchase interest payable | ( |
) |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2024 | 2023 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax |
Tax on profit |
UK corporation tax has been charged at 25% . |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2024 | 2023 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Utilisation of tax losses | ( |
) | ( |
) |
Deferred tax | 30,664 | 3,702 |
R&D enhanced deduction | - | (15,960 | ) |
Total tax charge | 85,261 | 46,449 |
8. | DIVIDENDS |
2024 | 2023 |
£ | £ |
Final |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
9. | INTANGIBLE FIXED ASSETS |
Computer |
software |
£ |
COST |
Additions |
At 31 July 2024 |
AMORTISATION |
Amortisation for year |
At 31 July 2024 |
NET BOOK VALUE |
At 31 July 2024 |
10. | TANGIBLE FIXED ASSETS |
Improvements | Plant and | Motor | Computer |
to property | machinery | vehicles | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 August 2023 |
Additions |
At 31 July 2024 |
DEPRECIATION |
At 1 August 2023 |
Charge for year |
At 31 July 2024 |
NET BOOK VALUE |
At 31 July 2024 |
At 31 July 2023 |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Directors' current accounts | 9,999 | 9,999 |
Tax |
Prepayments and accrued income |
Amounts owed by group undertakings are non-interest bearing and repayable on demand. |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Bank loans and overdrafts (see note 14) |
Hire purchase contracts (see note 15) |
Trade creditors |
Tax |
Social security and other taxes |
VAT | 465,688 | 367,530 |
Other creditors |
Directors' current accounts | 3,310 | 3,310 |
Accruals and deferred income |
13. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2024 | 2023 |
£ | £ |
Bank loans (see note 14) |
Hire purchase contracts (see note 15) |
14. | LOANS |
An analysis of the maturity of loans is given below: |
2024 | 2023 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
15. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase | contracts |
2024 | 2023 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable |
operating leases |
2024 | 2023 |
£ | £ |
Within one year |
Between one and five years |
16. | SECURED DEBTS |
The following secured debts are included within creditors: |
2024 | 2023 |
£ | £ |
Bank loans |
Hire purchase contracts | 36,187 | 2,192 |
17. | PROVISIONS FOR LIABILITIES |
2024 | 2023 |
£ | £ |
Deferred tax | 68,487 | 37,823 |
Other provisions | 49,982 | 49,982 |
Deferred | Other |
tax | provisions |
£ | £ |
Balance at 1 August 2023 |
Charge to Income Statement during year |
Balance at 31 July 2024 |
S M S ENVIRONMENTAL LIMITED (REGISTERED NUMBER: 04243379) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2024 |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
value: | £ | £ |
Ordinary | 1p | 210 | 210 |
19. | RESERVES |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 August 2023 | 2,465,349 |
Profit for the year |
Dividends | ( |
) | ( |
) |
At 31 July 2024 | 2,623,200 |
20. | RELATED PARTY DISCLOSURES |
The company has taken advantage of 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. |
During the year, the company made sales of £316,843 (2023: £1,396) to Opuz Ltd, a company with common control. At the year end an amount of £505,673 (2023: £1,396) was owed from Opuz Ltd. |
Related Party transactions during the year with wholly owned group companies do not require disclosure in accordance with FRS 102. |
21. | CONTROLLING PARTY |
The company is a wholly owned subsidiary of Sandford, Hearn, Harris & Associates Ltd, a company incorporated in the United Kingdom. |
There is no ultimate controlling party. |
The smallest and largest group in which the results of the company are consolidated is that headed by Sandford, Hearn, Harris & Associates Limited. Copies of the group financial statements are available on Companies House. |
The registered office of the parent is located at Quad One, Becquerel Avenue, Harwell Campus, Didcot, Oxfordshire, United Kingdom, OX11 0RA. |