REGISTERED NUMBER: 09896052 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2024

for

Smarta Water Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

7

Report of the Independent Auditors

9

Income Statement

13

Other Comprehensive Income

14

Balance Sheet

15

Statement of Changes in Equity

16

Cash Flow Statement

17

Notes to the Cash Flow Statement

18

Notes to the Financial Statements

19

DIRECTORS:

Mrs E J Green

S Black

P Watson

L Jacques

K Dixon

REGISTERED OFFICE:

North House Elland Road

Morley

Leeds

LS27 7QZ

REGISTERED NUMBER:

09896052 (England and Wales)

AUDITORS:

Xeinadin Audit Limited

116 Duke Street

Liverpool

Merseyside

L1 5JW

The Directors of Smarta Water Limited are pleased to present their Strategic Report on the progression of the business, along with their Directors' Report, the Independent Auditor's Report and the audited financial statements for the year ended 31st December 2024.

The principal activities of the Company are the provision of retail services relating to water, sewerage and trade effluent services to commercial businesses and governmental organisations, together with advice on water efficiency services including leak detection and repair, water audits and benchmarking.

The company maintains a large and diverse customer base across England and Scotland, serving a variety of business sectors including large industrial customers, household brands, and small to medium-sized enterprises. This diversification provides resilience against sector-specific economic challenges while enabling the company to leverage its expertise across multiple market segments.

Executive Summary

Smarta Water Limited underwent a significant transformation in 2024, marking a strategic pivot towards sustainable profitability. The company successfully addressed loss-making contracts while maintaining its commitment to exceptional customer service. Key achievements include:

*Strategic revenue optimisation: Despite a managed 9% revenue reduction to £32.3m (restated), gross margins improved significantly from 2.7% to 3.2%

*Operational improvements: Reduced trade debtors by £3.27m to £7.65m and wholesaler bonds by £1.23m to £1.85m through enhanced working capital management

*Platform independence: Full acquisition of billing platform user licenses ensuring operational autonomy

*Path to profitability: Clear trajectory towards monthly profitability by end of 2025

While challenges remain with negative shareholders' funds of £487k, the company has established a solid foundation for future growth through disciplined contract management and operational excellence.

BUSINESS REVIEW AND KEY PERFORMANCE INDICATORS

The financial results for the year reflect a period of strategic transformation for the Company. Smarta Water continues to deliver exceptional customer service with quality and agility, with our Customer Service Teams consistently demonstrating their willingness to 'go the extra mile' to resolve customer issues. The company takes pride in the numerous lasting relationships built since its incorporation.

Financial Performance Analysis

The Company's reported revenue reduced to £32.3m from £35.4m for the year ended 31st December 2024, representing a 9% reduction. Gross margin during the same period actually increased to £1.03m (3.1%) from £0.94m (2.7%).

The decline in revenues is a consequence from a managed process of switching away non-profitable contracts that inherently carried a high cost to serve. Despite the revenue reduction, gross margins increased substantially to £1.03m (3.2%) from £0.44m (1.3%), demonstrating the effectiveness of our strategic approach.

Profitability Analysis

The stated loss before tax position for 2024 increased to £1.30m from £0.17m loss in the previous year. The position of these losses once adjusted for the "exceptional item" is as follows:

2024 £m

2023 £m

Variance £m

Loss before tax(stated)

-1.30

-.17

-1.13

Exceptional item adjustment

.5

-.50

Underlying loss before tax

-.80

-.67

-.13

The restated loss before tax has reduced to £0.80m from a loss of £0.67m in 2023. While Smarta Water continued to operate at a loss during 2024, the business has successfully addressed loss-making contracts, begun winning account-managed profitable contracts, and addressed control issues by recruiting and retaining highly skilled staff. These actions have ensured the business remains robust going forward, with expectations of achieving monthly profitability by the end of 2025 and sustained profitability into 2026.

Strategic Initiatives

Operational Independence and Control

Smarta Water has significantly enhanced its resilience and operational independence by fully acquiring the user licenses for its billing platform. This strategic acquisition ensures that the destiny of this key billing platform asset is firmly in the company's own hands, reducing operational risk and providing greater control over future developments.

Working Capital Optimization

The company has proactively managed its working capital to offset operational losses through several key initiatives:

*Wholesaler Bonds Reduction: By strategically switching away loss-making customers, we reduced the requirement for wholesaler bonds from £3.08m at the end of 2023 to £1.85m at the end of 2024, representing a £1.23m improvement in working capital.

*Enhanced Credit Management: Smarta Water has engaged a professional credit management company to pursue long outstanding debt. This initiative resulted in trade debtors reducing from £10.91m to £7.65m at the end of 2024, a significant improvement of £3.26m.

Debt Management and Provisions

While recognising the inherent challenges of credit management in the water sector, Smarta Water acknowledges that further improvements are necessary to reach an optimal position. Aged debtors over 90 days old represented 10% of the overall billed debt balance. In response, the Directors have prudently increased the bad debt provision by £0.3m to £0.4m to reflect medium risk collection expectations.

Financing Structure

Smarta Water maintains the following loan agreements to support operations is currently examining it funding arrangements in light of the growth opportunities the business foresees in the future.

Current shareholders' funds stand at negative £487k, reflecting the transformation costs and historical losses.

SECTION 172 (1) STATEMENT AND OUR STAKEHOLDERS

We report here on how our Directors have performed their duty under Section 172 of the Companies Act 2006. Section 172 sets out a series of matters to which Directors must have regard in performing their duty to promote the success of the Company for the benefit of its shareholders, which includes having regard to other stakeholders.

Our Board considers it crucial that the Company maintains a reputation for high standards of business conduct. The Board is responsible for setting, monitoring and upholding the culture, values, standards, ethics, brand and reputation of the Company to ensure that our obligations to our shareholders, employees, customers and others are met. The Board monitors adherence to our policies and is committed to taking action when our business fails to act in the manner we expect.

For each matter that comes to the Board, the Directors consider the likely consequences of any decision in the long term and identify stakeholders who may be affected, carefully considering their interests and any potential impact as part of the decision-making process

Our Team

The Company engages with its employees on a frequent basis, ensuring they are provided with the best tools and training to perform their roles effectively and have opportunities to enhance their personal development. The Company is mindful of employees' wellbeing and supports employees on an individual basis wherever and whenever possible. Our policy is to recruit from within the organization whenever feasible.

Throughout the year, the Company continued to adopt a flexible approach to working arrangements, allowing employees to work from home or from the office as appropriate. Despite the business generating losses, Smarta Water retained its Customer Service team, recognizing that business fortunes were set to improve and wanting to be prepared from the outset. The company has also recruited executive talent to address customer service and control issues identified during the year.

PRINCIPAL RISKS AND UNCERTAINTIES

The Company identifies and assesses the impact of risk to the business using a comprehensive risk register. Significant risks are identified and presented to the Board on a regular basis for review and mitigation planning.

ECONOMIC AND FINANCIAL PERFORMANCE RISK

The Company faces uncertainties within the market as a result of macroeconomic factors, including cost-of- living pressures, relatively high inflation, and elevated interest rates. The UK economy remains challenging, particularly affecting some of our smaller customers. Failure to deliver financial plans could impact expected returns for shareholders and potentially affect the Company's trading license with Ofwat.

Mitigation measures include maintaining rolling monthly forecasts to monitor performance, which are reviewed regularly by the Board. The Company maintains open communication channels with Ofwat to discuss issues at the earliest opportunity, in addition to submitting the mandatory 6-monthly "Financial Resilience Reporting" as a condition of Smarta Water's retailer license. Key stakeholders such as banks are provided with all requested information to maintain transparency and trust.

.

TECHNOLOGY AND DATA RISK

The Company faces potential risks from the loss of key business systems due to malicious attacks or cyber- security failures. To mitigate these risks, software and hardware access controls are in place, and we utilize additional web-based security measures.

Timely access to accurate data is essential to ensure customers are billed correctly and debt collection operates efficiently. Data strategy remains a key business focus and is continuously reviewed to ensure best practice implementation

REGULATION AND COMPLIANCE RISK

The company operates in a highly regulated environment, requiring ongoing compliance with Ofwat requirements and industry standards. We continue to engage proactively with Ofwat on its strategic objectives to ensure alignment and compliance

FINANCIAL RISK MANAGEMENT OBJECTIVIES

The Directors have carefully considered the Company's exposures to financial risk. As the company operates wholly within the United Kingdom, the Directors do not believe it is materially exposed to foreign currency risk. The principal financial risks are:

Interest Rate Risk

The Company has bank loans in place that are subject to movements in the Bank of England base rate. The company experienced exposure to increased interest payments, which adversely impacted results during the year. At the time of compiling this report, the Bank of England base rate has fallen, and economic indicators suggest the rate may fall further over the next 12 months, potentially providing relief on interest costs.

Credit Risk

There are no significant concentrations of credit risk within the Company. Customer-specific risk is assessed by management, which has led the Company to engage with a partner company to perform credit control duties on behalf of the Company. The Company is actively addressing its processes relating to 'change of tenancy' issues and the historically high bad debt position.

Credit Support Notices

Due to the relative financial size of the Company, bonds must be provided to certain wholesalers as guarantees in case the Company defaults. The balance of Credit Support Notices reduced to £1.85m from £3.08m, reflecting our improved risk profile. Future growth will require additional funding, which is expected from a related company, Smarta Energy Limited.

FUTURE DEVELOPMENTS

Going forward, the company will continue to focus on supporting its customers by developing lasting relationships and offering value-added services that enable their businesses to operate effectively. We anticipate the market will remain challenging, requiring continued strategic focus and operational excellence.

Our strategic priorities include:

* Achieving monthly profitability by the end of 2025

* Expanding our portfolio of profitable, account-managed contracts

* Continuing to enhance our water efficiency service offerings

*Strengthening our operational controls and systems

* Maintaining our market-leading customer service standards

Directors' assessment of going concern

As at 31st December 2024, the Company had net current assets of negative £0.5m (including bad debt provision) compared to £0.6m in 2023 (restated £0.1m). During the year, the Company generated a loss after tax due to the costs of transformation and strategic repositioning.

The Directors have reviewed the ongoing trading performance and forecasts, as well as cash flow requirements in light of the ongoing challenges in the macroeconomic environment. The Company is confident that it will be able to meet future financing needs.

The Directors consider Smarta Water to be a going concern based on several key factors:

*Successful addressing of loss-making business through customer switching or fee increases

*New contracts and future opportunities will be account-managed and will only be serviced at optimal fees that yield good returns covering cost to serve, cost of working capital, and a fair return

*Future growth to be funded by a related party, Smarta Energy

*Improved credit management processes resulting in a lower trade debtor position

*Acquisition of user licenses for the billing platform, ensuring operational independence

*Careful consideration of financial forecasts demonstrating the ability to meet liquidity requirements

These factors provide the Directors with confidence that the Company can continue to operate as a going concern for the foreseeable future, with a clear path to profitability and sustainable operations.

ON BEHALF OF THE BOARD:

K Dixon - Director

30 September 2025

The directors present their report with the financial statements of the company for the year ended 31 December 2024.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2024.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

Mrs E J Green

S Black

P Watson

Other changes in directors holding office are as follows:

J M Dando - resigned 6 September 2024

G R Smith - resigned 9 August 2024

L Jacques - appointed 2 December 2024

K Dixon - appointed 2 December 2024

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.

AUDITORS

The auditors, Xeinadin Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

K Dixon - Director

30 September 2025

Opinion

We have audited the financial statements of Smarta Water Limited (the 'company') for the year ended 31 December 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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 seven, 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.

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 detected below:

Identifying and Assessing Potential Risks Related to Irregularities

Enquiring of management, including obtaining and reviewing supporting documentation concerning the company's policies and procedures relating to:

Identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance

detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud

the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations

discussing among the engagement team including relevant internal specialists, including tax, valuations, pensions and IT regarding how and where fraud might occur in the financial statements and any potential indicators of fraud

obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. The key laws and regulations we considered in this context included the Companies Act 2006, Pension legislation, Tax legislation, and Health and Safety requirements.

Audit Response to Risks Identified

In addition to the above, our procedures to respond to risks identified included the following:

reviewing the Financial Statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations discussed above;

enquiring of management concerning actual and potential litigation and claims;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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.

Philip Harrison BSc ACA (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited

116 Duke Street

Liverpool

Merseyside

L1 5JW

30 September 2030

TURNOVER

32,306,600

35,387,250

Cost of sales

31,259,016

34,443,497

GROSS PROFIT

1,047,584

943,753

Administrative expenses

1,223,339

1,062,959

(175,755

)

(119,206

)

Other operating income

(501,462

)

-

OPERATING LOSS

4

(677,217

)

(119,206

)

Interest receivable and similar income

134,738

132,534

(542,479

)

13,328

Interest payable and similar expenses

6

303,804

184,209

LOSS BEFORE TAXATION

(846,283

)

(170,881

)

Tax on loss

7

(174,304

)

(81,116

)

LOSS FOR THE FINANCIAL YEAR

(671,979

)

(89,765

)

LOSS FOR THE YEAR

(671,979

)

(89,765

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(671,979

)

(89,765

)

FIXED ASSETS

Intangible assets

9

520,772

385,820

Tangible assets

10

6,511

7,711

527,283

393,531

CURRENT ASSETS

Stocks

11

9,590

-

Debtors: amounts falling due within one year

12

8,595,351

11,649,112

Debtors: amounts falling due after more than one year

12

1,848,054

3,075,910

Cash at bank

292,426

387,719

10,745,421

15,112,741

CREDITORS

Amounts falling due within one year

13

8,663,468

12,059,569

NET CURRENT ASSETS

2,081,953

3,053,172

TOTAL ASSETS LESS CURRENT LIABILITIES

2,609,236

3,446,703

CREDITORS

Amounts falling due after more than one year

14

2,645,229

2,810,717

NET (LIABILITIES)/ASSETS

(35,993

)

635,986

CAPITAL AND RESERVES

Called up share capital

18

100

100

Retained earnings

19

(36,093

)

635,886

SHAREHOLDERS' FUNDS

(35,993

)

635,986

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

K Dixon - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

825,651

825,751

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

(89,765

)

(89,765

)

Balance at 31 December 2023

100

635,886

635,986

Changes in equity

Total comprehensive income

-

(671,979

)

(671,979

)

Balance at 31 December 2024

100

(36,093

)

(35,993

)

Cash flows from operating activities

Cash generated from operations

1

823,083

(2,133,329

)

Interest paid

(303,804

)

(184,209

)

Tax paid

-

(95,324

)

Net cash from operating activities

519,279

(2,412,862

)

Cash flows from investing activities

Purchase of intangible fixed assets

(323,733

)

(319,832

)

Purchase of tangible fixed assets

(4,023

)

(4,605

)

Interest received

134,738

132,534

Net cash from investing activities

(193,018

)

(191,903

)

Cash flows from financing activities

New loans in year

-

3,078,853

Loan repayments in year

(158,067

)

-

Associates

(263,487

)

-

Equity dividends paid

-

(100,000

)

Net cash from financing activities

(421,554

)

2,978,853

(Decrease)/increase in cash and cash equivalents

(95,293

)

374,088

Cash and cash equivalents at beginning of year

2

387,719

13,631

Cash and cash equivalents at end of year

2

292,426

387,719

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.12.24

31.12.23

£

£

Loss before taxation

(846,283

)

(170,881

)

Depreciation charges

194,004

177,710

Finance costs

303,804

184,209

Finance income

(134,738

)

(132,534

)

(483,213

)

58,504

Increase in stocks

(9,590

)

-

Decrease/(increase) in trade and other debtors

4,719,408

(7,276,611

)

(Decrease)/increase in trade and other creditors

(3,403,522

)

5,084,778

Cash generated from operations

823,083

(2,133,329

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

292,426

387,719

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

387,719

13,631

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

387,719

(95,293

)

292,426

387,719

(95,293

)

292,426

Debt

Debts falling due within 1 year

(268,135

)

(7,421

)

(275,556

)

Debts falling due after 1 year

(2,810,717

)

165,488

(2,645,229

)

(3,078,852

)

158,067

(2,920,785

)

Total

(2,691,133

)

62,774

(2,628,359

)

1.	STATUTORY INFORMATION

Smarta Water Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going Concern

The financial statements have been prepared on a going concern basis despite the fact the company has made a loss in 2024.The directors have considered the Company's cash flow forecasts and financing arrangements and they are satisfied that adequate resources are available to enable the Company to continue trading for at least 12 months from the reporting date

Significant judgements and estimates

There are no judgements (apart from those involving estimates) that have had a significant effect on amounts recognised in the financial statements.

Turnover

Turnover is derived from principal ordinary activities and is measured at the fair value of the consideration received or receivable from the collection, treatment and supply of water, excluding discounts, rebates, value added tax and other sales taxes.

Revenue from metered customers is recognised when water and sewerage services are provided. Income is based on actual consumption as measured by meters, together with an estimate of the value of water and wastewater charges unbilled at the year end. Unbilled revenue is estimated by reference to historical consumption patterns, adjusted for known changes in usage or customer base.

The company applies judgement in estimating the level of income accrued at the year end and in assessing the level of receivables that may not be recovered. An appropriate provision for doubtful debts is recognised based on historic collection rates, customer segmentation and management’s assessment of current economic conditions.

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.

Patents and licences are being amortised evenly over their estimated useful life of five years.

Website development is being amortised evenly over its estimated useful life of five years.

Expenditure on development of billing system Chaarm is capitalised as website costs in the year in which it is incurred. Research costs to ensure the system was working correctly and was rebust were capitalised . The company has commenced amortisation of the deferred costs as the system has come into use.

Amortisation is recognised so as to write the cost of the asset less their residual values over their useful lives on the following basis:

Website costs

20% straight line

Licences

20% straight line

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

-

20% on cost

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Financial instruments

The company has elected to apply the provisions of section 11 'Basic financial instrument's' and section 12' Other financial instrument's issues' of FRS 102 to all of its financial instrument's.

Financial instrument's are recognised when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset,with the net amounts presented in the financial statements, when there is legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other debtors, amounts due from group undertakings and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitute a financing transaction, where the financial asset is measured at the present value of the future receipts discounted at a market rate of interest.

Bonds paid by customers are included in trade receivables as deposits as due after one year.

Bonds paid to suppliers are included in amounts due after more than one year. Where credit support notices are issued by suppliers the value is transferred from a long term debtors and off set against the trade creditors balance.

The bonds have not been discounted as could become due within one year if contracts were terminated.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that , as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimates cash flows discounted at the asset's original effective interest rate.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and subsequently all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including trade and other creditors, bank and other loans and amounts due to group undertakings, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Derecognition of financial liabilities

Financial liabilities are recognised when the company's contractual obligations are discharged, cancelled or they expire.

Equity Instruments

Equity instruments issued by the company are recorded at the fair value of proceeds received, net of direct issue costs. Dividend payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a client list in 2019, is being amortised evenly over its estimated useful life of five years.

3.	EMPLOYEES AND DIRECTORS

31.12.24

31.12.23

£

£

Wages and salaries

291,733

210,415

Social security costs

45,908

28,779

Other pension costs

7,784

5,358

345,425

244,552