Fowles Holdings Limited - Limited company accounts 20.1

REGISTERED NUMBER: 09404366 (England and Wales)

GROUP STRATEGIC REPORT, DIRECTOR'S REPORT AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2021

FOR

FOWLES HOLDINGS LIMITED

Page

Company Information

1

Group Strategic Report

2

Director's Report

4

Independent Auditors' Report

6

Consolidated Statement of Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Financial Statements

14

DIRECTOR:

Mr W T Fowles

REGISTERED OFFICE:

Hythe End Farm

Hythe End Road

Wraysbury

Middlesex

TW19 5AW

REGISTERED NUMBER:

09404366 (England and Wales)

SENIOR STATUTORY AUDITOR:

Mr Jeremy Laurence Hyde FCCA

AUDITORS:

CG LEE Limited

Chartered Certified Accountants

Statutory Auditors

Ingram House

Meridian Way

Norwich

Norfolk

NR7 0TA

BANKERS:

NatWest Bank plc

135 Bishopsgate

London

EC2M 3UR

SOLICITORS:

Geoffrey Bryant & Company LLP

54 High Street

Eton

Windsor

SL4 6BL

The director presents the Strategic Report on the group for the year ended 30 September 2021.

REVIEW OF THE BUSINESS

The principal activities of the group were that of the provision of skip hire, waste processing, recycling and haulage. The group processes waste material from sites throughout London and the Home Counties.

The director is satisfied with the activity levels and performance achieved during the year under review in the context of the waste recycling and haulage sectors, given the market conditions prevalent in that sector during the period.

FINANCIAL HIGHLIGHTS

The key performance indicators for the group are turnover, gross profit and operating profit. The relevant indicators are shown below and they are subject to regular review.

2021

2020

2019

Turnover £'000

23,670

15,104

13,643

Gross profit £'000

6,742

5,199

4,965

Gross margin %

28.5

34.4

36.4

Operating profit £'000

3,726

2,575

2,276

Operating profit margin %

15.7

17.0

16.7

FUTURE OUTLOOK

The waste processing, recycling and haulage sectors continues to be robust and the director is taking positive steps to increase market share in the current areas of operation.

FINANCIAL RISK MANAGEMENT

The group is exposed to a variety of financial risks resulting from its operational activities. The group's risk management is coordinated with key management personnel, focusing on actively securing the group's short to medium term cash flows.

Liquidity and credit risk

At 30 September 2021, the group had a cash balance which the director believes is sufficient to maintain robust liquidity should the company have a sudden downturn in sales. The group reviews its working capital requirement on a regular basis to ensure it meets the needs of the growing business.

The group sells to most of its customers on customary credit terms and is, as a result, exposed to the usual credit risk and cash flow risk associated with this form of trading.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks facing the group are:

Environmental issues and regulatory controls

The most significant risk facing the group has been defending its ability to trade fully from its recycling site.

PRINCIPAL RISKS AND UNCERTAINTIES - continued

Operational health and safety

Failure to maintain a trained workforce could adversely affect the group, and health and safety is reviewed on a regular basis.

Interest risk

Interest rate risk reflects the group's exposure to fluctuations in interest rates. The risk arises because the group's floating rate bank loan bears interest based on LIBOR.

ON BEHALF OF THE BOARD:

Mr W T Fowles - Director

16 June 2022

The director presents his report with the financial statements of the company and the group for the year ended 30 September 2021.

DIVIDENDS

No dividends will be distributed for the year ended 30 September 2021.

DIRECTOR

Mr W T Fowles held office during the whole of the period from 1 October 2020 to the date of this report.

GOING CONCERN

The director has a reasonable expectation that the group has adequate resources to continue in operational existence for the duration of the going concern period despite the ongoing uncertainties surrounding the Covid-19 pandemic and Brexit.

In considering whether the group's financial statements can be prepared on a going concern basis, the director has assessed the expected business activity level of the group together with factors likely to affect its performance, financial position and capacity to raise funds.

MATTERS INCLUDED IN THE GROUP STRATEGIC REPORT

Details regarding a review of the business, including future developments, principal risk and uncertainties are provided in the Group Strategic Report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has prepared the group and company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the group and company for that period. In preparing the financial statements, the director is required to:

-

select suitable accounting policies and then apply them consistently;

-

state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed,
subject to any material departures disclosed and explained in the financial statements;

-

make judgements and accounting estimates that are reasonable and prudent; and

-

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group
and parent company will continue in business.

The director is also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group and company's transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006.

The director is responsible for the maintenance and integrity of the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other

jurisdictions.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

CG LEE Limited, having expressed their willingness to continue in office, will be deemed reappointed for the next financial year in accordance with Section 487(2) of the Companies Act 2006 unless the company receives notice under Section 488(1) of the Act.

ON BEHALF OF THE BOARD:

Mr W T Fowles - Director

16 June 2022

Opinion

We have audited the financial statements of Fowles Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2021 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement 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 group's and of the parent company affairs as at 30 September 2021 and of the group's 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 group 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 director's 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 group's and the parent 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Director's Report, but does not include the financial statements and our Auditors' Report 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 Group Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Director's Report 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Director's Report.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is 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 director determines 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 director is responsible for assessing the group's and the parent 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 director either intends to liquidate the group or the parent company or to cease operations, or has 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 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.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to employment laws and tax legislation, and we considered the extent to which non compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:

-

discussions with management including consideration of known or suspected instances of non-compliance with
laws and regulation;

-

evaluating management's controls designed to prevent and detect irregularities;

-

identifying and testing of journal entries for appropriateness and evaluating the business rationale of significant
transactions outside the normal course of business; and

-

reviewing significant accounting estimates for management bias.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

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 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.

Mr Jeremy Laurence Hyde FCCA (Senior Statutory Auditor)

for and on behalf of CG LEE Limited

Chartered Certified Accountants

Statutory Auditors

Ingram House

Meridian Way

Norwich

Norfolk

NR7 0TA

16 June 2022

TURNOVER

5

23,669,574

15,104,386

Cost of sales

16,927,247

9,905,852

GROSS PROFIT

6,742,327

5,198,534

Administrative expenses

3,056,270

2,754,591

3,686,057

2,443,943

Other operating income

6

40,300

130,840

OPERATING PROFIT

9

3,726,357

2,574,783

Interest receivable and similar income

9,018

17

3,735,375

2,574,800

Interest payable and similar expenses

10

184,111

262,232

PROFIT BEFORE TAXATION

3,551,264

2,312,568

Tax on profit

11

778,814

493,442

PROFIT FOR THE FINANCIAL YEAR

2,772,450

1,819,126

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

2,772,450

1,819,126

Profit attributable to:

Owners of the parent

2,772,450

1,819,126

Total comprehensive income attributable to:

Owners of the parent

2,772,450

1,819,126

FIXED ASSETS

Intangible assets

14

1,552,500

1,782,500

Tangible assets

15

20,402,030

22,182,828

Investments

16

-

Investment property

17

2,491,239

-

24,445,769

23,965,328

CURRENT ASSETS

Debtors

18

2,937,997

2,127,610

Cash at bank and in hand

3,437,220

999,486

6,375,217

3,127,096

CREDITORS

Amounts falling due within one year

19

4,338,882

2,735,525

NET CURRENT ASSETS

2,036,335

391,571

TOTAL ASSETS LESS CURRENT
LIABILITIES

26,482,104

24,356,899

CREDITORS

Amounts falling due after more than one year

20

(5,450,780

)

(6,286,956

)

PROVISIONS FOR LIABILITIES

23

(1,183,286

)

(765,356

)

NET ASSETS

19,848,038

17,304,587

CAPITAL AND RESERVES

Called up share capital

24

1,636,002

1,865,002

Revaluation reserve

25

2,924,676

Capital redemption reserve

25

229,000

-

Merger reserve

25

4,013,518

Retained earnings

25

11,044,842

8,501,391

SHAREHOLDERS' FUNDS

19,848,038

17,304,587

The financial statements were approved by the director and authorised for issue on 16 June 2022 and were signed by:

Mr W T Fowles - Director

FIXED ASSETS

Intangible assets

14

-

Tangible assets

15

-

Investments

16

202

Investment property

17

-

202

CURRENT ASSETS

Debtors

18

1,872,125

1,865,160

CREDITORS

Amounts falling due within one year

19

2,899

27,219

NET CURRENT ASSETS

1,869,226

1,837,941

TOTAL ASSETS LESS CURRENT
LIABILITIES

1,869,428

1,838,143

CAPITAL AND RESERVES

Called up share capital

24

1,636,002

1,865,002

Capital redemption reserve

25

229,000

-

Retained earnings

25

4,426

(26,859

)

SHAREHOLDERS' FUNDS

1,869,428

1,838,143

Company's profit/(loss) for the financial year

260,285

(9,330

)

The financial statements were approved by the director and authorised for issue on 16 June 2022 and were signed by:

Mr W T Fowles - Director

Called up

share

Retained

Revaluation

capital

earnings

reserve

£

Balance at 1 October 2019

2

6,684,265

2,924,676

Changes in equity

Issue of share capital

1,865,000

-

Total comprehensive income

-

1,819,126

-

Dividends

-

(2,000

)

-

Balance at 30 September 2020

1,865,002

8,501,391

2,924,676

Changes in equity

Redemption of preference shares

(229,000

)

(229,000

)

-

Total comprehensive income

-

2,772,450

-

Balance at 30 September 2021

1,636,002

11,044,841

2,924,676

Capital

redemption

Merger

Total

reserve

equity

£

Balance at 1 October 2019

-

4,013,518

13,622,461

Changes in equity

Issue of share capital

-

1,865,000

Total comprehensive income

-

1,819,126

Dividends

-

(2,000

)

Balance at 30 September 2020

-

4,013,518

17,304,587

Changes in equity

Redemption of preference shares

229,000

-

(229,000

)

Total comprehensive income

-

2,772,450

Balance at 30 September 2021

229,000

4,013,518

19,848,037

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

Balance at 1 October 2019

2

(15,529

)

-

(15,527

)

Changes in equity

Issue of share capital

1,865,000

-

1,865,000

Total comprehensive income

-

(9,330

)

-

(9,330

)

Dividends

-

(2,000

)

-

(2,000

)

Balance at 30 September 2020

1,865,002

(26,859

)

-

1,838,143

Changes in equity

Redemption of preference shares

(229,000

)

(229,000

)

229,000

(229,000

)

Total comprehensive income

-

260,285

-

260,285

Balance at 30 September 2021

1,636,002

4,426

229,000

1,869,428

Cash flows from operating activities

Cash generated from operations

29

4,091,876

976,345

Interest paid

(112,956

)

(174,928

)

Interest element of hire purchase payments
paid

(71,155

)

(87,304

)

Tax paid

(517,709

)

(539,722

)

Net cash from operating activities

3,390,056

174,391

Cash flows from investing activities

Purchase of tangible assets

(1,200,716

)

(1,487,902

)

Purchase of investment property

(439,193

)

-

Sale of tangible assets

159,465

281,952

Interest received

9,018

17

Net cash from investing activities

(1,471,426

)

(1,205,933

)

Cash flows from financing activities

Bank loan repayments in year

(601,374

)

(103,563

)

HP capital repayments in year

(274,315

)

251,317

Net amount withdrawn by directors

(73,702

)

3,528

Share issue

-

1,865,000

Redemption of preference shares

(229,000

)

-

Equity dividends paid

-

(2,000

)

Net cash from financing activities

(1,178,391

)

2,014,282

Increase in cash and cash equivalents

740,239

982,740

Cash and cash equivalents at beginning
of year

30

999,486

16,746

Cash and cash equivalents at end of year

30

1,739,725

999,486

1.	STATUTORY INFORMATION

Fowles Holdings 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 principal activities of the group are set out in the Group Strategic Report on page 2.

2.	STATEMENT OF COMPLIANCE

The group and individual financial statements of Fowles Holdings Limited have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, "The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland" ("FRS 102") and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Basis of preparation

These consolidated and separate financial statements are prepared on a going concern basis, under the historic cost convention, as modified by the recognition of certain financial assets and liabilities measured at fair value. The functional and presentation currency of these financial statements is pound sterling.

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group and company accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.

The principal accounting policies of the group applied in the preparation of these consolidated and separate financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Going concern

The director has a reasonable expectation that the group has adequate resources to continue in operational existence for the duration of the going concern period despite the ongoing uncertainties surrounding the Covid-19 pandemic and Brexit.

In considering whether the group's financial statements can be prepared on a going concern basis, the director has assessed the expected business activity level of the group together with factors likely to affect its performance, financial position and capacity to raise funds.

Exemptions for qualifying entities under FRS 102

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102:

(i)

from preparing a statement of cash flows, on the basis that it is a qualifying entity and the consolidated
statement of cash flows, included in these financial statements, includes the company's cash flows;

(ii)

from disclosing the company key management personnel compensation, as required by FRS 102
paragraph 33.7.

(iii)

from disclosing the related party transactions between the company and its wholly owned subsidiaries
within the Fowles Holdings Limited group.

Consolidated financial statements

The group financial statements consolidate the financial statements of Fowles Holdings Limited and all of its subsidiary undertakings drawn up to 30 September each year. No profit and loss account is presented for Fowles Holdings Limited as permitted by Section 408 of the Companies Act 2006. The company's results for the financial year is disclosed on the balance sheet of Fowles Holdings Limited on page 11.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the group obtains control and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities.

Revenue recognition

Turnover is measured at fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of value added tax and trade discounts.

Rental income from operating leases, net of value added tax, and is recognised on a straight-line basis over the term of the relevant lease unless the lease payments are structured to increase with general inflation in which case the income is recognised as revenue in accordance with the expected payments.

Employee benefits

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

Defined contribution pension schemes

The group operates defined contribution pension schemes for its employees. Contributions are recognised as an expense when they are due. Amounts not paid are included in other creditors in the balance sheet.

Business combinations and goodwill

Purchased goodwill arising on the acquisition of businesses, represents any excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired. Goodwill is capitalised and stated at cost less accumulated amortisation and provisions for impairment.

For the goodwill relating to the acquisition of Fowles Haulage, amortisation is calculated on a straight line basis over a period of 10 years from the date of acquisition, such number being the period that the director estimates benefits may reasonably be expected to accrue from the acquisition.

Tangible assets

Revaluations of classes of fixed assets measured at fair value are carried out regularly so that the carrying amounts do not materially differ from using the fair value at the balance sheet date.

Tangible assets are recorded at cost less accumulated depreciation. Cost includes the original purchase price of the asset plus costs attributable to bringing the asset to its working condition for its intended use. Depreciation is charged from the time when tangible assets are brought into use and is calculated so as to write off the cost of fixed assets, less their estimated residual values, over the expected useful economic lives of the assets concerned The principal annual rates used for this purpose are as follows:

Freehold property

- 4% straight line

Plant and machinery

- 15% on reducing balance

Fixtures and fittings

- 25% on reducing balance

No depreciation is provided on freehold land.

Investments in subsidiary undertakings

Investments in subsidiary undertakings are recorded at cost less any provision for impairment. Impairment reviews are performed by the company when there has been an indication of potential impairment.

Impairment of non-financial assets

At each balance sheet date non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset (or asset's cash generating unit) may be impaired. If there is such an indication the recoverable amount of the asset (or asset's cash generating unit) is compared to the carrying amount of the asset (or asset's cash generating unit).

The recoverable amount of the asset (or asset's cash generating unit) is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset's (or asset's cash generating unit) continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market risk-free rate and the risks inherent in the asset.

If the recoverable amount of the asset (or asset's cash generating unit) is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in profit or loss, unless the asset has been revalued when the amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. Thereafter any excess is recognised in profit or loss.

If an impairment loss is subsequently reversed, the carrying amount of the asset (or asset's cash generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in profit or loss.

Goodwill is allocated on acquisition to the cash generating unit expected to benefit from the synergies of the combination. Goodwill is included in the carrying value of cash generating units for impairment testing.

Government grants

Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grant will be received. These grants are recognised within other operating income on a systematic basis over the periods in which the related costs towards which they are intended to compensate are recognised as expenses.

Coronavirus Job Retention Scheme (CJRS)

Grants received in relation to the Coronavirus Job Retention Scheme are accounted for on the accruals basis once the related payroll return has been submitted.

Investment property

Investment properties are initially recorded at cost which includes purchase cost and any directly attributable expenditure.

Investment properties whose fair value can be measured reliably are measured at fair value. The gain or loss on revaluation is recognised in profit or loss in the period in which it arises. Such gains or losses are transferred from retained earnings to a non-distributable reserve.

Taxation

The tax charge represents the aggregate amount of current tax and deferred tax recognised in the reporting period.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.

A deferred tax asset or liability is recognised for tax recoverable or payable in future periods in respect of transactions and events recognised in the financial statements of current and previous periods.

Deferred tax arises from timing differences that are differences between taxable profits and the company's results as stated in the financial statements. Timing differences result from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax is recognised on all timing differences at the reporting date apart from certain exceptions. Unrelieved tax losses and other deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing differences. Deferred tax relating to land and investment properties that is measured at fair value is measured using the tax rates and allowances that apply to the sale of the asset.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Operating leases

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

Trade and other debtors

Trade and other debtors that are receivable within one year and do not constitute a financing transaction are recorded at the undiscounted amount expected to be received, net of impairment. Those that are receivable after more than one year or that constitute a financing transaction are recorded initially at fair value less transaction costs and subsequently at amortised cost, net of impairment.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts, where applicable, are shown within borrowings in current liabilities.

Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Financial instruments

The group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities such as trade and other debtors / creditors, loans from banks and other third parties and loans to related parties.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the best estimate, which is an approximation, of the amount that the company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is an 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.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Redeemable preference shares are classified as equity. There is no fixed redemption date and shares are redeemable at the sole discretion of the company at the nominal value of each Redeemable Preference Share. No dividends shall be paid unless expressly determined by the director of the company.

4.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

a) Critical judgements in applying the accounting policies of the group

There are no critical judgements in applying the accounting policies of the group.

b) Key accounting estimates and assumptions

The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

Intangible assets

Purchased goodwill arising on the acquisition of a business represents the excess of the fair value of consideration and the net assets acquired has created an intangible asset. This is capitalised in the balance sheet and amortised on a straight line basis over its useful life. The director, based on a variety of factors, estimates the useful economic life of goodwill to be 10 years. See note 14 for the carrying value of goodwill.

Valuation of freehold property

As detailed in note 15, freehold property is stated at fair value based on a valuation performed by an independent professional valuer GVA Grimley Limited (RICS) on 31 October 2017. The director considers the valuation remains appropriate at 30 September 2021.

Depreciation of tangible assets

An allowance for depreciation is made against tangible assets and charged to profit or loss over the useful economic lives of the assets. The useful economic life assessment of an asset is based on the time in which benefits of the asset are realised to the group. See note 15 for the net carrying value of the tangible assets, and note 3 for the useful economic lives for each class of assets.

Impairment of debtors

The director makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, the director considers factors including the credit worthiness and financial conditions of customers. See note 18 for the net carrying amount of the debtors and associated impairment provision.

Going concern

The director makes an estimate of the future performance of the group in order to prepare the financial statements under the going concern methodology. When assessing the future performance, the director considers financial projections which reflect the current and expected market conditions, operational cash flow requirements and financing opportunities.

5.

TURNOVER

The director is of the opinion that there is only one category of business which all arose within the United Kingdom and consequently no segmental analysis by activity has been provided.

6.	OTHER OPERATING INCOME

2021

2020

£

Government grants

40,300

130,840

7.	EMPLOYEES AND DIRECTORS

2021

2020

£

Wages and salaries

1,864,789

1,566,987

Social security costs

177,694

143,913

Other pension costs

41,504

35,088

2,083,987

1,745,988

The average number of employees during the year was as follows:

2021

2020

Production staff

58

52

Administrative staff

9

8

67

60

8.	DIRECTORS' EMOLUMENTS

2021

2020

£

Directors' remuneration

33,768

41,268

Directors' pension contributions to money purchase schemes

826

898

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

9.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2021

2020

£

Depreciation - owned assets

418,556

284,376

Depreciation - assets on hire purchase contracts

424,810

484,537

Profit on disposal of fixed assets

(73,363

)

(77,759

)

Goodwill amortisation

230,000

Fees payable for the audit of the company's financial statements

1,150

1,380

Fees payable for the audit of other group companies

17,850

17,900

Fees payable to the group's auditor for other non-audit services

33,654

44,299

Other operating leases

132,000

10.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

Bank loan interest

112,744

172,367

Other interest

212

2,561

Hire purchase

71,155

87,304

184,111

262,232

11.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2021

2020

£

Current tax:

UK corporation tax

593,588

333,537

Adjustments in respect of prior years

(232,704

)

(6,543

)

Total current tax

360,884

326,994

Deferred tax:

Accelerated capital allowances

417,930

166,448

Tax on profit

778,814

493,442

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2021

2020

£

Profit before tax

3,551,264

2,312,568

Profit multiplied by the standard rate of corporation tax in the UK of 19 %
(2020 - 19 %)

674,740

439,388

Effects of:

Expenses not deductible for tax purposes

2,765

10,223

Adjustments to tax charge in respect of previous periods

(232,704

)

(6,543

)

Impact of deferred tax rate change

277,729

-

Amortisation of goodwill not deductible for tax purposes

43,700

Other tax adjustments

12,584

6,674

Total tax charge

778,814

493,442

Factors that may affect future, current and total tax charges

An increase in the UK corporation tax rate from 19% to 25% (effective from 1 April 2023) was substantively enacted on 24 May 2021. This change has been taken into account in measuring deferred tax assets and liabilities at the balance sheet date. These changes are not anticipated to have a material impact on the company's financial statements in future years.

12.	INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME

As permitted by Section 408 of the Companies Act 2006, the statement of comprehensive income of the parent company is not presented as part of these financial statements.

The company's profit for the financial year is disclosed as a note to the company's balance sheet on page 11.

13.

DIVIDENDS

2021

2020

£

Ordinary shares of £1 each

Interim

-

2,000

14.	INTANGIBLE ASSETS

Group

Goodwill

£

COST

At 1 October 2020

and 30 September 2021

2,300,000

AMORTISATION

At 1 October 2020

517,500

Amortisation for year

230,000

At 30 September 2021

747,500

NET BOOK VALUE

At 30 September 2021

1,552,500

At 30 September 2020

1,782,500

Company

The company had no intangible assets at 30 September 2021 and 30 September 2020.

15.	TANGIBLE ASSETS

Group

Fixtures

Freehold

Plant and

and

property

machinery

fittings

Totals

£

COST OR VALUATION

At 1 October 2020

18,097,808

5,695,639

3,750

23,797,197

Additions

-

1,139,364

61,352

1,200,716

Disposals

-

(145,665

)

-

(145,665

)

Reclassification/transfer

(2,052,046

)

-

(2,052,046

)

At 30 September 2021

16,045,762

6,689,338

65,102

22,800,202

DEPRECIATION

At 1 October 2020

15,072

1,598,359

938

1,614,369

Charge for year

41,831

785,494

16,041

843,366

Eliminated on disposal

-

(59,563

)

-

(59,563

)

At 30 September 2021

56,903

2,324,290

16,979

2,398,172

NET BOOK VALUE

At 30 September 2021

15,988,859

4,365,048

48,123

20,402,030

At 30 September 2020

18,082,736

4,097,280

2,812

22,182,828

Included in cost or valuation of land and buildings is freehold land of £15,000,000 (2020 - £15,000,000) which is not depreciated.

Cost or valuation at 30 September 2021 is represented by:

Fixtures

Freehold

Plant and

and

property

machinery

fittings

Totals

£

Valuation in 2021

12,508,760

-

12,508,760

Cost

3,537,002

6,689,338

65,102

10,291,442

16,045,762

6,689,338

65,102

22,800,202

If land and buildings had not been revalued it would have been included at the following historical cost:

2021

2020

£

Cost

12,454,155

14,487,431

Value of land in freehold land and buildings

11,611,765

Freehold property was valued on a fair value basis on 31 October 2017 by GVA Grimley Limited (RICS) .

The director intends to undertake an updated professional valuation at 30 September 2022 and considers this to be of sufficient regularity to ensure the carrying value does not differ materially from the fair value at the reporting date.

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:

Plant and

machinery

£

COST OR VALUATION

At 1 October 2020

3,012,197

Additions

560,897

Transfer to ownership

(436,711

)

At 30 September 2021

3,136,383

DEPRECIATION

At 1 October 2020

741,024

Charge for year

424,810

Transfer to ownership

(178,573

)

At 30 September 2021

987,261

NET BOOK VALUE

At 30 September 2021

2,149,122

At 30 September 2020

2,271,173

Company

The company had no tangible assets at 30 September 2021 and 30 September 2020.

16.	INVESTMENTS

Company

Shares in

group

undertakings

£

COST

At 1 October 2020

and 30 September 2021

202

NET BOOK VALUE

At 30 September 2021

202

At 30 September 2020

202

The director believes that the carrying value of the investments is supported by their underlying value.

The list of subsidiaries of the group and the parent company at 30 September 2021, which are included in the consolidation are as follows:

% held

Subsidiary undertaking

by group

Ownership

Principal activity

Fowles Crushed Concrete Limited

100%

Direct

Waste processing and recycling

Fowles Property Limited

100%

Direct

Property investment

Fowles Haulage Limited

100%

Direct

Skip hire and haulage

The registered office address of all companies listed above is Hythe End Farm, Hythe End Road, Wraysbury, Middlesex,TW19 5AW. All the companies listed above are incorporated and registered in the United Kingdom.

17.	INVESTMENT PROPERTY

Group

Total

£

FAIR VALUE

Additions

439,193

Reclassification/transfer

2,052,046

At 30 September 2021

2,491,239

NET BOOK VALUE

At 30 September 2021

2,491,239

Company

The company had no investment property at 30 September 2021 and 30 September 2020.

18.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2021

2020

2021

2020

£

Trade debtors

2,317,358

1,658,784

-

Amounts owed by group undertakings

-

1,872,125

1,860,536

Other debtors

335,219

277,694

-

4,624

Corporation tax

108,730

-

Prepayments and accrued income

176,690

191,132

-

2,937,997

2,127,610

1,872,125

1,865,160

No provisions for impairment are included against trade debtors in the current or prior year.

Amounts owed by group undertakings are unsecured, interest free and have no fixed date of repayment.

19.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2021

2020

2021

2020

£

Bank loans and overdrafts (see note 21)

2,298,866

650,000

-

Hire purchase contracts (see note 22)

503,166

494,048

-

Trade creditors

774,680

821,705

-

3,300

Amounts owed to group undertakings

-

113

16,359

Corporation tax

121,476

169,571

-

Other taxation and social security

300,490

282,084

-

Other creditors

27,800

21,756

-

Directors' current accounts

-

4,624

-

Accrued expenses

312,404

291,737

2,786

7,560

4,338,882

2,735,525

2,899

27,219

Amounts owed to group undertakings are unsecured, interest free and have no fixed date of repayment.

20.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group

2021

2020

£

Bank loans (see note 21)

4,993,694

5,546,437

Hire purchase contracts (see note 22)

457,086

740,519

5,450,780

6,286,956

Company

The company had no creditors falling due after more than one year at 30 September 2021 and 30 September 2020.

21.

LOANS

An analysis of the maturity of loans is given below:

Group

2021

2020

£

Amounts falling due within one year or on

demand:

Bank overdrafts

1,697,495

-

Bank loans

601,371

650,000

2,298,866

650,000

Amounts falling due between one and two

years:

Bank loans - 1-2 years

601,371

650,000

Amounts falling due between two and five

years:

Bank loans - 2-5 years

1,804,113

1,950,000

Amounts falling due in more than five years:

Repayable by instalments

Bank loans more 5 yr by instal

2,588,210

2,946,437

The bank loan is secured against certain freehold property of the group with a carrying value of £15,000,000 (2020 - £15,000,000). There is a Fowles Holdings Limited group-wide corporate cross guarantee in place in respect of the bank loan.

The loan bears interest at 1.8% per annum over base rate and is repayable by regular monthly instalments over 10 years.

22.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group

Hire purchase contracts

2021

2020

£

Net obligations repayable:

Within one year

503,166

494,048

Between one and five years

457,086

740,519

960,252

1,234,567

The hire purchase contracts are secured on the assets concerned.

Group

Non-cancellable operating

leases

2021

2020

£

Within one year

39,781

152,960

Between one and five years

17,958

178,738

57,739

331,698

Company

The company had no obligations under leasing agreements at 30 September 2021 and 30 September 2020.

23.	PROVISIONS FOR LIABILITIES

Group

2021

2020

£

Deferred tax

Accelerated capital allowances

686,835

301,797

Revaluation of tangible assets

496,451

463,559

1,183,286

765,356

Group

Deferred

tax

£

Balance at 1 October 2020

765,356

Charge to Statement of Comprehensive Income during year

417,930

Balance at 30 September 2021

1,183,286

Deferred tax has been provided at 19% or 25% in accordance with the expected timing of the reversal. The deferred tax liability expected to reverse in 2022 is £196,561. This primarily relates to the reversal of timing differences on capital allowances.

There are no unused tax losses or unused tax credits.

24.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2021

2020

value:

£

2

Ordinary

£1

2

1,636,000

Redeemable Preference

£1

1,636,000

1,865,000

1,636,002

1,865,002

There is a single class of ordinary share.

There are no restrictions on the distribution of dividends and the repayment of capital.

On 25 June 2021 229,000 £1 redeemable preference shares were redeemed at their nominal price of £1 per share. The redemption of the shares is at the option of the group.

25.

RESERVES

Retained earnings

The retained earnings balance represents cumulative retained profits and losses.

Merger reserve

The merger reserve balance represents subsidiary reserves acquired on acquisition in 2015.

Revaluation reserve

The revaluation reserve represents the cumulative effect of revaluations of tangible assets.

Capital Redemption reserve

The capital redemption reserve represents the effect of the redemption of preference shares in 2021.

26.	PENSION COMMITMENTS

Group

The group's pension cost charge for the year represents contributions payable and amounted to £41,504 (2020 - £35,088). Contributions totalling £Nil (2020 - £Nil) were payable by the group to defined contribution schemes at the year end.

Company

The company does not operate a defined contribution scheme.

27.	DIRECTOR'S ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to a director subsisted during the years ended 30 September 2021 and 30 September 2020:

2021

2020

£

W T Fowles

Balance outstanding at start of year

217,000

-

Amounts advanced

343,326

217,000

Amounts repaid

(265,000

)

-

Amounts written off

-

Amounts waived

-

Balance outstanding at end of year

295,326

217,000

Interest of £5,928 (2020 - £Nil) was charged on the above director loan balance at agreed H M Revenue & Customs rates.

28.	ULTIMATE CONTROLLING PARTY

The ultimate controlling party is Mr W T Fowles.

29.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2021

2020

£

Profit before taxation

3,551,264

2,312,568

Depreciation charges

1,073,366

998,912

Profit on disposal of fixed assets

(73,363

)

(77,759

)

Finance costs

184,111

262,232

Finance income

(9,018

)

(17

)

4,726,360

3,495,936

Increase in trade and other debtors

(632,576

)

(781,014

)

Decrease in trade and other creditors

(1,908

)

(1,738,577

)

Cash generated from operations

4,091,876

976,345

30.	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 30 September 2021

30.9.21

1.10.20

£

Cash and cash equivalents

3,437,220

999,486

Bank overdrafts

(1,697,495

)

-

1,739,725

999,486

Year ended 30 September 2020

30.9.20

1.10.19

£

Cash and cash equivalents

999,486

237,929

Bank overdrafts

-

(221,183

)

999,486

16,746

31.	ANALYSIS OF CHANGES IN NET DEBT

At 1.10.20

Cash flow

At 30.9.21

£

Net cash

Cash at bank and in hand

999,486

2,437,734

3,437,220

Bank overdrafts

-

(1,697,495

)

(1,697,495

)

999,486

740,239

1,739,725

Debt

Finance leases

(1,234,567

)

274,315

(960,252

)

Debts falling due within 1 year

(650,000

)

48,629

(601,371

)

Debts falling due after 1 year

(5,546,437

)

552,743

(4,993,694

)

(7,431,004

)

875,687

(6,555,317

)

Total

(6,431,518

)

1,615,926

(4,815,592

)