Fowles Holdings Limited - Limited company accounts 20.1

FOWLES HOLDINGS LIMITED - Company Information

IRIS Accounts Productionv21.2.0.37609404366director30.9.201.10.1930.9.2030.9.20the provision of skip hire, waste processing, recycling and haulage. The group processes waste material from sites throughout London and the Home Counties.truetruefalsetruetruefalsefalsetruefalseOrdinary0Redeemable Preference00 iso4217:GBPiso4217:USDiso4217:EURxbrli:sharesxbrli:pure094043662019-09-30094043662020-09-30094043662019-10-012020-09-30094043662018-09-30094043662018-10-012019-09-30094043662019-09-3009404366ns16:EnglandWales2019-10-012020-09-3009404366ns15:PoundSterling2019-10-012020-09-3009404366ns11:Director12019-10-012020-09-3009404366ns11:Consolidated2020-09-3009404366ns11:ConsolidatedGroupCompanyAccounts2019-10-012020-09-3009404366ns11:PrivateLimitedCompanyLtd2019-10-012020-09-3009404366ns11:FRS102ns11:Consolidated2019-10-012020-09-3009404366ns11:Consolidatedns11:Audited2019-10-012020-09-3009404366ns11:Consolidatedns11:LargeMedium-sizedCompaniesRegimeForDirectorsReport2019-10-012020-09-3009404366ns11:LargeMedium-sizedCompaniesRegimeForAccountsns11:Consolidated2019-10-012020-09-3009404366ns11:FullAccounts2019-10-012020-09-3009404366ns11:OrdinaryShareClass12019-10-012020-09-3009404366ns11:OrdinaryShareClass22019-10-012020-09-3009404366ns11:OrdinaryShareClass222019-10-012020-09-3009404366ns11:Consolidated2019-10-012020-09-3009404366ns11:RegisteredOffice2019-10-012020-09-3009404366ns11:Consolidated2018-10-012019-09-3009404366ns6:CurrentFinancialInstruments2020-09-3009404366ns6:CurrentFinancialInstruments2019-09-3009404366ns6:ShareCapital2020-09-3009404366ns6:ShareCapital2019-09-3009404366ns6:RetainedEarningsAccumulatedLosses2020-09-3009404366ns6:RetainedEarningsAccumulatedLosses2019-09-3009404366ns6:ShareCapital2018-09-3009404366ns6:RetainedEarningsAccumulatedLosses2018-09-3009404366ns6:RetainedEarningsAccumulatedLosses2018-10-012019-09-3009404366ns6:ShareCapital2019-10-012020-09-3009404366ns6:RetainedEarningsAccumulatedLosses2019-10-012020-09-3009404366ns6:CostValuation2019-09-3009404366ns6:CurrentFinancialInstrumentsns6:WithinOneYear2020-09-3009404366ns6:CurrentFinancialInstrumentsns6:WithinOneYear2019-09-3009404366ns11:OrdinaryShareClass12020-09-3009404366ns11:OrdinaryShareClass22020-09-30

REGISTERED NUMBER: 09404366 (England and Wales)

GROUP STRATEGIC REPORT, DIRECTOR'S REPORT AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2020

FOR

FOWLES HOLDINGS LIMITED

Page

Company Information

Group Strategic Report

Director's Report

Independent Auditors' Report

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

Notes to the Consolidated Financial Statements

DIRECTOR:

Mr W T Fowles

REGISTERED OFFICE:

Puerorum House

26 Great Queen Street

London

WC2B 5BL

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 2020.

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 directors are 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.

2020

2019

2018

Turnover £'000

15,104

13,643

10,656

Gross profit £'000

5,199

4,965

3,594

Gross margin %

34.4

36.4

33.7

Operating profit £'000

2,575

2,276

1,925

Operating profit margin %

17.0

16.7

18.1

FUTURE OUTLOOK

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

COVID-19 PANDEMIC

The outbreak of the coronavirus disease Covid-19 in March 2020 has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of self-imposed quarantine periods, social distancing and travel bans, have caused material disruption to business globally resulting in an economic slowdown.

The duration and impact of the Covid-19 outbreak is unknown at this time, as is the efficacy of the UK government and fiscal interventions designed to stabilise economic conditions. As a result it is not possible to reliably estimate the length and severity of these developments nor the impact on the financial position and results of the group in future periods.

Management have remodelled forecasts and performed sensitivity analysis to review the potential impact of Covid-19 on the business and as a result the director is as confident as he can be at this time that the group is well placed to meet its liabilities as they fall due and that the group will continue to operate as a going concern.

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 2020, 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.

Coronavirus risk

The coronavirus pandemic presents risks which may impact upon various aspects of the group's operations. This may include a reduction in customer demand, interruption to supply chains and exposure to the impact of any government restrictions or policies. The situation is being closely monitored on a day to day basis by the director and various contingency plans are in place to address and limit the impact to the business of these risks. The director has also considered the cash position of the group and the capacity to raise funds to mitigate the impact of any issues arising, as required.

Brexit impact

The group continues to monitor the national political environment and in particular the exit from the European Union. The company continues to plan and take the necessary steps, as far as it is able, to ensure that disruption to trade is minimised from 1 January 2021.

ON BEHALF OF THE BOARD:

Mr W T Fowles - Director

18 August 2021

The director presents his report with the financial statements of the company and the group for the year ended 30 September 2020.

DIVIDENDS

An interim dividend of £1,000 per share on the Ordinary £1 shares was paid on 3 April 2020. The director recommends that no final dividend be paid on these shares.

No interim dividend was paid on the Redeemable Preference £1 shares. The director recommends that no final dividend be paid on these shares.

The total distribution of dividends for the year ended 30 September 2020 will be £ 2,000 .

DIRECTORS

Mr W T Fowles has held office during the whole of the period from 1 October 2019 to the date of this report.

Other changes in directors holding office are as follows:

Mr T Fowles - deceased 17 July 2020

GOING CONCERN

At the date of approval of the accounts, the UK is experiencing high levels of economic, social and political uncertainty surrounding Covid-19. As such, in assessing the group's ability to adopt the going concern basis in preparation of the financial statements, the director has considered the financial impact that Covid-19 may have on the business.

As part of this assessment, the director has taken into account the expected business activity levels in light of Covid-19. The director will continue to monitor the situation closely, but at the date of signing the accounts, given the current cash position of the group and the capacity to raise funds to mitigate the impact of any issues arising, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The director has therefore prepared the financial statements on a going concern basis.

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

18 August 2021

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 2020 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 2020 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

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

18 August 2021

TURNOVER

15,104,386

13,642,920

Cost of sales

9,905,852

8,677,820

GROSS PROFIT

5,198,534

4,965,100

Administrative expenses

2,754,590

2,688,928

2,443,944

2,276,172

Other operating income

130,840

OPERATING PROFIT

2,574,784

2,276,172

Interest receivable and similar income

2,574,801

2,276,192

Interest payable and similar expenses

262,232

337,605

PROFIT BEFORE TAXATION

2,312,569

1,938,587

Tax on profit

493,442

414,115

PROFIT FOR THE FINANCIAL YEAR

1,819,127

1,524,472

OTHER COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE INCOME FOR

THE YEAR

1,819,127

1,524,472

Profit attributable to:

Owners of the parent

1,819,127

1,524,472

Total comprehensive income attributable to:

Owners of the parent

1,819,127

1,524,472

FIXED ASSETS

Intangible assets

1,782,500

2,012,500

Tangible assets

22,182,828

21,668,032

Investments

23,965,328

23,680,532

CURRENT ASSETS

Debtors

2,127,610

1,345,499

Cash at bank and in hand

999,486

237,929

3,127,096

1,583,428

CREDITORS

Amounts falling due within one year

2,735,524

4,754,858

NET CURRENT ASSETS/(LIABILITIES)

391,572

(3,171,430

)

TOTAL ASSETS LESS CURRENT

LIABILITIES

24,356,900

20,509,102

CREDITORS

Amounts falling due after more than one

year

(6,286,956

)

(6,287,733

)

PROVISIONS FOR LIABILITIES

(765,356

)

(598,908

)

NET ASSETS

17,304,588

13,622,461

CAPITAL AND RESERVES

Called up share capital

1,865,002

Revaluation reserve

2,924,676

Merger reserve

4,013,518

Retained earnings

8,501,392

6,684,265

SHAREHOLDERS' FUNDS

17,304,588

13,622,461

The financial statements were approved by the director and authorised for issue on 18 August 2021 and were signed by:

Mr W T Fowles - Director

FIXED ASSETS

Intangible assets

Tangible assets

Investments

202

CURRENT ASSETS

Debtors

1,865,160

CREDITORS

Amounts falling due within one year

27,219

15,729

NET CURRENT ASSETS/(LIABILITIES)

1,837,941

(15,729

)

TOTAL ASSETS LESS CURRENT

LIABILITIES

1,838,143

(15,527

)

CAPITAL AND RESERVES

Called up share capital

1,865,002

Retained earnings

(26,859

)

(15,529

)

SHAREHOLDERS' FUNDS

1,838,143

(15,527

)

Company's loss for the financial year

(9,330

)

(3,300

)

The financial statements were approved by the director and authorised for issue on 18 August 2021 and were signed by:

Mr W T Fowles - Director

Called up

Retained

Revaluation

Merger

Total

capital

earnings

reserve

equity

Balance at 1 October 2018

5,159,793

2,924,676

4,013,518

12,097,989

Changes in equity

Total comprehensive income

1,524,472

Balance at 30 September 2019

6,684,265

2,924,676

4,013,518

13,622,461

Changes in equity

Issue of share capital

1,865,000

Total comprehensive income

1,819,127

Dividends

(2,000

)

(2,000

)

Balance at 30 September 2020

1,865,002

8,501,392

2,924,676

4,013,518

17,304,588

Called up

Retained

Total

capital

earnings

equity

Balance at 1 October 2018

(12,229

)

(12,227

)

Changes in equity

Total comprehensive income

(3,300

)

(3,300

)

Balance at 30 September 2019

(15,529

)

(15,527

)

Changes in equity

Issue of share capital

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

Cash flows from operating activities

Cash generated from operations

976,345

3,085,790

Interest paid

(174,928

)

(232,870

)

Interest element of hire purchase payments

paid

(87,304

)

(104,735

)

Tax paid

(539,722

)

(138,840

)

Net cash from operating activities

174,391

2,609,345

Cash flows from investing activities

Purchase of tangible assets

(1,487,902

)

(3,801,321

)

Sale of tangible assets

281,952

96,950

Interest received

Net cash from investing activities

(1,205,933

)

(3,704,351

)

Cash flows from financing activities

Bank loan repayments in year

(103,563

)

(600,000

)

New HP agreements in year

260,000

HP capital repayments in year

251,317

(674,949

)

Net amount withdrawn by directors

3,528

(542,765

)

Share issue

1,865,000

Equity dividends paid

(2,000

)

Net cash from financing activities

2,014,282

(1,557,714

)

Increase/(decrease) in cash and cash equivalents

982,740

(2,652,720

)

Cash and cash equivalents at beginning

of year

16,746

2,669,466

Cash and cash equivalents at end of year

999,486

16,746

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

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 10.

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.

Turnover

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.

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 in the income statement 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 government's Coronavirus Job Retention Scheme are recognised within other operating income. The grant is accounted for on the accruals basis once the related payroll return has been submitted.

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.

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.

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 13 for the carrying value of goodwill.

Valuation of freehold property

As detailed in note 14, 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 2020.

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 14 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 16 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.

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.	EMPLOYEES AND DIRECTORS

2020

2019

Wages and salaries

1,566,987

1,614,126

Social security costs

143,913

147,133

Other pension costs

35,088

30,457

1,745,988

1,791,716

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

2020

2019

Production staff

Administrative staff

7.	DIRECTORS' EMOLUMENTS

2020

2019

Directors' remuneration

41,268

53,768

Directors' pension contributions to money purchase schemes

898

984

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

Money purchase schemes

8.	OPERATING PROFIT

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

2020

2019

Depreciation - owned assets

284,376

239,326

Depreciation - assets on hire purchase contracts

484,537

383,064

Profit on disposal of fixed assets

(77,759

)

(57,140

)

Goodwill amortisation

230,000

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

1,380

Fees payable for the audit of other group companies

17,900

17,200

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

44,298

37,219

Other operating leases

132,000

INTEREST PAYABLE AND SIMILAR EXPENSES

2020

2019

Bank loan interest

172,367

232,710

Other interest

2,561

160

Hire purchase

87,304

104,735

262,232

337,605

10.

TAXATION

Analysis of the tax charge

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

2020

2019

Current tax:

UK corporation tax

333,537

301,841

Adjustments in respect of prior years

(6,543

)

Total current tax

326,994

301,841

Deferred tax:

Accelerated capital allowances

166,448

112,274

Tax on profit

493,442

414,115

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:

2020

2019

Profit before tax

2,312,569

1,938,587

Profit multiplied by the standard rate of corporation tax in the UK of 19 %

(2019 - 19 %)

439,388

368,332

Effects of:

Expenses not deductible for tax purposes

10,223

239

Adjustments to tax charge in respect of previous periods

(6,543

)

Amortisation of goodwill not deductible for tax purposes

43,700

Other tax adjustments

6,674

1,844

Total tax charge

493,442

414,115

Factors that may affect future, current and total tax charges

The prevailing UK corporation tax rate of 19% was substantively enacted as part of the Finance Act 2019 on 12 March 2019. This rate was due to reduce to 17% from 1 April 2020, however, in the Budget on 11 March 2020 it was announced that the main rate of UK corporation tax will remain 19%. In the Spring Budget 2021, it was announced that from 1 April 2023 the corporation tax rate will increase to 25%. As this change had not been substantively enacted at the balance sheet date, its effects are not reflected in these financial statements and deferred tax is provided at 19%.

11.	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 loss for the financial year is disclosed as a note to the company's balance sheet on page 10.

12.

DIVIDENDS

2020

2019

Ordinary shares of £1 each

Interim

2,000

13.	INTANGIBLE ASSETS

Group

Goodwill

COST

At 1 October 2019

and 30 September 2020

2,300,000

AMORTISATION

At 1 October 2019

287,500

Amortisation for year

230,000

At 30 September 2020

517,500

NET BOOK VALUE

At 30 September 2020

1,782,500

At 30 September 2019

2,012,500

Company

The company had no intangible assets at 30 September 2020 and 30 September 2019.

14.	TANGIBLE ASSETS

Group

Fixtures

Freehold

Plant and

and

property

machinery

fittings

Totals

COST OR VALUATION

At 1 October 2019

18,074,404

4,579,909

22,654,313

Additions

23,404

1,460,748

3,750

1,487,902

Disposals

(345,018

)

(345,018

)

At 30 September 2020

18,097,808

5,695,639

3,750

23,797,197

DEPRECIATION

At 1 October 2019

6,186

980,095

986,281

Charge for year

8,886

759,089

938

768,913

Eliminated on disposal

(140,825

)

(140,825

)

At 30 September 2020

15,072

1,598,359

938

1,614,369

NET BOOK VALUE

At 30 September 2020

18,082,736

4,097,280

2,812

22,182,828

At 30 September 2019

18,068,218

3,599,814

21,668,032

Included in cost or valuation of land and buildings is freehold land of £15,000,000 (2019 - £15,000,000) which is not depreciated.

Cost or valuation at 30 September 2020 is represented by:

Fixtures

Freehold

Plant and

and

property

machinery

fittings

Totals

Valuation in 2017

15,000,000

Cost

3,097,808

5,695,639

3,750

8,797,197

18,097,808

5,695,639

3,750

23,797,197

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

2020

2019

Cost

14,709,573

14,686,169

Value of land in freehold land and buildings

14,709,573

14,686,169

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

The director considers the valuation remains appropriate at 30 September 2020.

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 2019

2,498,005

Additions

1,196,580

Transfer to ownership

(682,388

)

At 30 September 2020

3,012,197

DEPRECIATION

At 1 October 2019

464,338

Charge for year

484,537

Transfer to ownership

(207,851

)

At 30 September 2020

741,024

NET BOOK VALUE

At 30 September 2020

2,271,173

At 30 September 2019

2,033,667

Company

The company had no tangible assets at 30 September 2020 and 30 September 2019.

15.	INVESTMENTS

Company

Shares in

group

undertakings

COST

At 1 October 2019

and 30 September 2020

202

NET BOOK VALUE

At 30 September 2020

202

At 30 September 2019

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 2020, 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 Puerorum House, 26 Great Queen Street, London, WC2B 5BL. All the companies listed above are incorporated and registered in the United Kingdom.

16.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2020

2019

2020

2019

Trade debtors

1,658,784

1,153,419

Amounts owed by group undertakings

1,860,536

Other debtors

277,694

30,639

4,624

Prepayments and accrued income

191,132

161,441

2,127,610

1,345,499

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.

17.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2020

2019

2020

2019

Bank loans and overdrafts (see note 19)

650,000

647,787

Hire purchase contracts (see note 20)

494,048

568,913

Trade creditors

821,704

452,877

3,300

Amounts owed to group undertakings

16,359

9,129

Corporation tax

169,571

382,299

Other taxation and social security

282,084

272,057

Other creditors

21,756

2,134,803

Directors' current accounts

4,624

Accrued expenses

291,737

296,122

7,560

3,300

2,735,524

4,754,858

27,219

15,729

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

18.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group

2020

2019

Bank loans (see note 19)

5,546,437

5,873,396

Hire purchase contracts (see note 20)

740,519

414,337

6,286,956

6,287,733

Company

The company had no creditors falling due after more than one year at 30 September 2020 and 30 September 2019.

19.

LOANS

An analysis of the maturity of loans is given below:

Group

2020

2019

Amounts falling due within one year or on

demand:

Bank overdrafts

221,183

Bank loans

650,000

426,604

650,000

647,787

Amounts falling due between one and two

years:

Bank loans - 1-2 years

650,000

562,965

Amounts falling due between two and five

years:

Bank loans - 2-5 years

1,950,000

1,766,947

Amounts falling due in more than five years:

Repayable by instalments

Bank loans more 5 yr by instal

2,946,437

3,543,484

The bank loan is secured against certain freehold property of the group with a carrying value of £15,000,000 (2019 - £15,000,000). There is a Fowles Holdings Limited group-wide corporate cross guarantee in place in respect of the bank loan.

On 16 March 2020 the existing bank loan was refinanced. The new loan bears interest at 1.8% per annum over base rate and is repayable by regular monthly instalments over 10 years.

20.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group

Hire purchase contracts

2020

2019

Net obligations repayable:

Within one year

494,048

568,913

Between one and five years

740,519

414,337

1,234,567

983,250

The hire purchase contracts are secured on the assets concerned.

Group

Non-cancellable operating

leases

2020

2019

Within one year

152,960

150,213

Between one and five years

178,738

300,179

331,698

450,392

Company

The company had no obligations under leasing agreements at 30 September 2020 and 30 September 2019.

21.	PROVISIONS FOR LIABILITIES

Group

2020

2019

Deferred tax

Accelerated capital allowances

301,797

135,349

Revaluation of tangible assets

463,559

765,356

598,908

Group

Deferred

tax

Balance at 1 October 2019

598,908

Charge to Statement of Comprehensive Income during year

166,448

Balance at 30 September 2020

765,356

An uplift in deferred tax of £14,052 is expected in the next year as accelerated capital allowances increase.

There are no unused tax losses or unused tax credits.

22.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2020

2019

value:

Ordinary

£1

1,865,000

Redeemable Preference

£1

1,865,000

1,865,002

1,865,000 Redeemable Preference shares of £1 each were allotted and fully paid for cash at par during the year.

There is a single class of ordinary share.

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

On 16 July 2020 the company invited its shareholder to subscribe to a rights issue of 932,500 Redeemable Preference Shares of £1 each in the capital of the Company for each ordinary share held, at a price of £1 per Redeemable Preference Share. A total 1,865,000 Redeemable Preference Shares were subscribed for, allotted and fully paid. The redemption of the shares is at the option of the group.

23.

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.

24.	PENSION COMMITMENTS

Group

The group's pension cost charge for the year represents contributions payable and amounted to £35,088 (2019 - £30,457). Contributions totalling £Nil (2019 - £Nil) were payable by the group to defined contribution schemes at the year end.

Company

The company does not operate a defined contribution scheme.

25.	ULTIMATE CONTROLLING PARTY

The ultimate controlling party is Mr W T Fowles.

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

2020

2019

Profit before taxation

2,312,569

1,938,587

Depreciation charges

998,912

852,390

Profit on disposal of fixed assets

(77,759

)

(57,140

)

Finance costs

262,232

337,605

Finance income

(17

)

(20

)

3,495,937

3,071,422

(Increase)/decrease in trade and other debtors

(781,014

)

120,482

Decrease in trade and other creditors

(1,738,578

)

(106,114

)

Cash generated from operations

976,345

3,085,790

27.	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 2020

30.9.20

1.10.19

Cash and cash equivalents

999,486

237,929

Bank overdrafts

(221,183

)

999,486

16,746

Year ended 30 September 2019

30.9.19

1.10.18

Cash and cash equivalents

237,929

2,669,466

Bank overdrafts

(221,183

)

16,746

2,669,466

28.	ANALYSIS OF CHANGES IN NET DEBT

At 1.10.19

Cash flow

At 30.9.20

Net cash

Cash at bank and in hand

237,929

761,557

999,486

Bank overdrafts

(221,183

)

221,183

16,746

982,740

999,486

Debt

Finance leases

(983,250

)

(251,317

)

(1,234,567

)

Debts falling due within 1 year

(426,604

)

(223,396

)

(650,000

)

Debts falling due after 1 year

(5,873,396

)

326,959

(5,546,437

)

(7,283,250

)

(147,754

)

(7,431,004

)

Total

(7,266,504

)

834,986

(6,431,518

)