Registered number:
FOR THE YEAR ENDED 31 MAY 2021
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FREDERIC SMART & SON LIMITED
COMPANY INFORMATION
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FREDERIC SMART & SON LIMITED
CONTENTS
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FREDERIC SMART & SON LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2021
The directors present their strategic report and business review, which includes the principal risks and uncertainties of the business, and key performance indicators
Sales during the year have decreased from the previous year, reflecting a reduction in UK cereal production following adverse growing conditions in the 2020 harvest year. However, improved trading margins and increased warehousing activity have led to an improved gross profit. With overhead costs remaining broadly in line with the previous year, net profits have increased. This continued profitability has led to a further strengthening of the balance sheet at the year end, and the directors are confident that the company’s ongoing performance, together with existing cash resources, will meet envisaged working capital requirements as well as ongoing investment.
The board plan to continue to invest and further develop the business across all areas.
The principal risk factors affecting the business are kept under constant review, and appropriate steps are taken to mitigate those risks.
The directors consider the key performance indicators of the success of the company to be turnover and profit, both of which are disclosed on the face of the accounts.
This report was approved by the board
and signed on its behalf by:
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FREDERIC SMART & SON LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2021
The directors present their report and the financial statements for the year ended 31 May 2021.
The profit for the year, after taxation, amounted to £
1,197,714
(2020 -
£
853,361
)
.
Dividends of £98,137 were paid during the period (2020 - £98,137). No further dividends have been recommended for the period.
The directors who served during the year were:
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements 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 to 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.
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FREDERIC SMART & SON LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2021
The directors intend to continue to grow all areas of the business.
There have been no significant events affecting the Company since the year end.
Under section 487(2) of the Companies Act 2006, Peters Elworthy & Moore will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf by:
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FREDERIC SMART & SON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FREDERIC SMART & SON LIMITED
We have audited the financial statements of Frederic Smart & Son Limited (the 'Company') for the year ended 31 May 2021, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity
and the related notes, 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 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.
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FREDERIC SMART & SON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FREDERIC SMART & SON LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
In our opinion, based on the work undertaken in the course of the 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.
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.
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FREDERIC SMART & SON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FREDERIC SMART & SON LIMITED (CONTINUED)
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 Auditors' 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector;
∙
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment and health and safety legislation;
∙
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting correspondence available; and
∙
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur by:
∙
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙
performed analytical procedures to identify any unusual or unexpected relationships; and
∙
performed audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
In response to the risk of irregularities, including fraud and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙
agreeing financial statement disclosures to underlying supporting documentation;
∙
reviewing minutes of meetings of those charged with governance; and
∙
reviewing correspondence with relevant regulators and the company’s legal advisors (where applicable).
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FREDERIC SMART & SON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FREDERIC SMART & SON LIMITED (CONTINUED)
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
Salisbury House
Station Road
CB1 2LA
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FREDERIC SMART & SON LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2021
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FREDERIC SMART & SON LIMITED
REGISTERED NUMBER:
00879929
BALANCE SHEET
AS AT
31 MAY 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 12 to 27 form part of these financial statements.
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FREDERIC SMART & SON LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 MAY 2021
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FREDERIC SMART & SON LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2021
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
1.
ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 2).
The following principal accounting policies have been applied:
Turnover from the sale of goods is recognised (exclusive of Value added Tax and trade discounts), when all of the following conditions are satisfied: Rendering of Services Turnover from rendering of services is recognised (exclusive of Value added Tax and trade discounts) in the period in which the services are provided, when all of the following conditions are satisfied: Rental income from investment property is recognised (exclusive of Value added Tax and trade discounts) as revenue on a straight-line basis over the term of the lease.
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
1.
ACCOUNTING POLICIES (CONTINUED)
Land is not depreciated. Depreciation on other assets 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:
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.
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
1.
ACCOUNTING POLICIES (CONTINUED)
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
1.
ACCOUNTING POLICIES (CONTINUED)
Forward contracts are entered into by the Company to purchase and/or sell grain commodities, and management judge that these forward commodity contracts are entered into for the Company's "own use" rather than trading instruments. They continue to be held in accordance with the Company's expected purchase, sale and/or usage requirements.
Functional and presentation currency
Transactions and balances
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
1.
ACCOUNTING POLICIES (CONTINUED)
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.
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
Depreciation Depreciation is charged annually based on the management's estimate of economic useful life of the asset per the accounting policies above. Freehold buildings are not depreciated as the directors believe the residual value of the property is in line with fair value. Stock Stock provisions are recognised for slow-moving and obsolete stock and are reviewed on an annual basis. The directors review all old and slow-moving items and consider whether a provision is required. Debtors An allowance for doubtful accounts is maintained for potential credit losses based upon management's assessment of expected collectability of all accounts receivable. The allowance for doubtful accounts is reviewed periodically to assess the adequacy of the allowance. In making this assessment, management takes into consideration any circumstances of which they are aware regarding a customer's inability to meet its financial obligations.
An analysis of turnover by activity and geographical region has not been disclosed as, in the opinion of the directors, such disclosure would be detrimental to the interests of the company.
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
Page 18
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
Page 19
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
The closing deferred tax position has been calculated at 19% (2020 - 19%) in accordance with the rates enacted at the statement of financial position date. In the UK Budget Statement on 3 March 2021, the Chancellor announced the intention for corporation tax to rise to a headline rate of 25% from 1 April 2023, which was subsequently enacted into law when the Finance Act 2021 was given Royal Assent on 10 June 2021. This change will not have a material impact on the Company's net deferred tax liability.
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
Page 21
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
Page 22
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
The 2021 valuations were made by the directors, on an open market value for existing use basis.
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
Page 24
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
Page 25
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
23.
DEFERRED TAXATION (CONTINUED)
Capital redemption reserve
Profit and loss account
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FREDERIC SMART & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2021
The company is controlled by the directors by virtue of their ownership of the entire issued share capital.
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