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Company Registration Number SC517801























VIRTUAL FM LIMITED





FINANCIAL STATEMENTS





 31 MARCH 2023
























img5f76.png

 
VIRTUAL FM LIMITED
 

COMPANY INFORMATION


Directors
Grant James Currie 
Adrienne Mary McArthur Currie 




Registered number
SC517801



Registered office
Westpoint House
5 Redwood Place

Peel Park

East Kilbride

South Lanarkshire

G74 5PB




Independent auditors
Armstrong Watson Audit Limited
Chartered Accountants & Statutory Auditors

1st Floor 24 Blythswood Square

Glasgow

G2 4BG




Bankers
Royal Bank of Scotland
96 John Finnie Street

Kilmarnock

KA1 1NY





 
VIRTUAL FM LIMITED
 

CONTENTS



Page
Strategic Report
 
 
1 - 2
Directors' Report
 
 
3 - 4
Independent Auditors' Report
 
 
5 - 8
Statement of Income and Retained Earnings
 
 
9
Statement of Financial Position
 
 
10
Notes to the Financial Statements
 
 
11 - 22


 
VIRTUAL FM LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

Introduction
 
The Directors present their Strategic Report of the Group for the year ended 31 March 2023.
The principal activity of the Company in the period under review was the provision of Facilities Management services to our clients. These clients are across number of market sectors and our services can be categorised in the following groups;
 Integrated Facilities Management
 Technical Services
 Soft Services
 Refurbishment & Construction
 Water Hygiene
 Help Desk Service
 Aerial Drone Surveys
Within each grouping we have an extensive range of highly qualified staff, leading technological solutions and the ability to tailor these to the requirements of each client.

Business review
 
Virtual FM is organised to support customer properties. Technical, operational and commercial services are delivered directly to client properties and is therefore geographically spread around the UK.
 
During the year the company experienced significant growth in line with client’s expansion. Operations were started in new parts of the UK and new end sectors. This generated operational challenges, and an extensive business review was undertaken. This review identified loss making operations, which were stopped in the later part of the year. It also identified opportunities to increase pricing for the services being delivered to several large customers. These were also established towards the end of the year. Another outcome of the review was to identify significant opportunities for improving operational efficiencies and profitability.
The company is focused on ensuring the highest standards of health and safety in our working environment and monitors these closely in our management control systems.  We have a similar focus on quality and maintain investment in training to ensure that our technicians are qualified to the highest standard.
We also concentrate on the general financial strength from our activities and monitor performance using KPIs of Gross profit margin, Operation profit Margin, Current Ratio and Return on assets.

   
 2023  2022  Measure
   
Gross profit margin  45%  29%  Gross profit/turnover
   
Operating profit margin 3%  -1%  Operating profit/turnover
   
Current Ratio  0.95:1  0.82:1  Current assets/current liabilities
   
Return on assets  156%  -158% Profit/(loss) after tax/fixed assets
 

Page 1

 
VIRTUAL FM LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Principal risks and uncertainties
 
The principal risks and uncertainties affecting the business include the following:
• Contraction of commercial rental market: The directors anticipate continuing churn in ownership of    commercial rental properties and have organised the business to supply the services that are required to   meet owners’ statutory obligations to keep their properties operational. This allows us to become experts   in managing each building in their portfolios and ensure that we continue our contracts if ownership    changes. The company is also expanding into other sectors such as industrial, leisure and educational    properties.
• Credit risk: The principal financial assets are trade debtors, other debtors, amounts owed by fellow group   undertaking, and bank balances.  The company’s credit risk is primarily attributable to its trade debtors    and is managed through maintaining good customer relationships and the monitoring of credit levels and   settlement periods. The company also utilises facilities from national and international credit rating    agencies to ensure the certainty of our receivables. The amounts presented in the balance sheet are net   of allowances for doubtful receivables. 
• Cash flow risk: In order to manage cash flow risk management carryout regular review of the working    capital movements in order to minimise risk. The company also has access to a flexible funding     agreement that provides accelerated terms for cash receipts from invoicing.
• Contract risk:  the company conducts significant elements of its business under customer contracts which   include performance and other delivery conditions.  The key to the management of contract risk is robust   tendering procedures supported by effective operational management.  Rigorous tender review processes  are in place across the company and tenders whose values and profiles are out with pre-set qualitative    and quantitative parameters must be approved by the directors prior to issue.
• Health and Safety:  Health and Safety risks are continually assessed by group management.   In the    current year additional focus has been placed on developing a plan to ensure continuing improvement in   Health and Safety management. 
• Environmental risks:  the company places considerable emphasis upon environmental compliance in each  of its divisions and not only seeks to ensure ongoing compliance with relevant legislation but also strives    to ensure that environmental best practice is incorporated into its key processes.
• Commercial relationships:  the company maintains strong relationships with each of its key customers and  has established credit control parameters. There is a rigorous control procedure for cash flow which    includes regular review of collections and payments to minimise the risks to liquidity.
• The effect of legislation or other regulatory activities: the company monitors forthcoming and current    legislation regularly.


This report was approved by the board and signed on its behalf.



................................................
Grant James Currie
Director

Date: 12 February 2024

Page 2

 
VIRTUAL FM LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £228,505 (2022 - loss £348,624).



Directors

The directors who served during the year were:

Grant James Currie 
Adrienne Mary McArthur Currie 

Future developments

Key areas of future development and performance of the business include:
• Continue our diversification strategy into new end market sectors.
• Competitive advantage:  the company focuses on areas within its services which are at a competitive    advantage, which places it well in terms of long term income/cash flow growth potential.
• Health and Safety:  the company continues to seek ways of ensuring that a safe and healthy working    environment is progressively improved. This process has introduced health and wellbeing support which    will be enhanced in the following year.

Page 3

 
VIRTUAL FM LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the company since the year end.

Auditors

The auditorsArmstrong Watson Audit Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





................................................
Grant James Currie
Director
Date: 12 February 2024

Page 4

 
VIRTUAL FM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VIRTUAL FM LIMITED
 

Opinion


We have audited the financial statements of Virtual FM Limited (the 'company') for the year ended 31 March 2023, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


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


Conclusions relating to going concern


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


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


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


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' Report thereon.  The directors are responsible for the other information contained within the Annual Report.  Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.  If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves.  If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Page 5

 
VIRTUAL FM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VIRTUAL FM LIMITED (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
VIRTUAL FM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VIRTUAL FM LIMITED (CONTINUED)


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:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including
fraud and non-compliance with laws and regulations, was as follows:
 
°the engagement partner ensured that the engagement team collectively had the appropriate
competence, capabilities and knowledge of the Company to identify or recognise non-compliance with
applicable laws and regulations.
 
°we identified the laws and regulations applicable to the company through discussions with directors and
other management and review of appropriate industry knowledge. Key laws and regulations we identified
during the audit were the UK Companies Act 2006 and tax legislation, UK employment legislation and UK
health and safety legislation;
 
°we assessed the extent of compliance with the laws and regulations identified above by making
enquiries of management and
 
°identified laws and regulations were communicated within the audit team regularly and the team
remained alert to instances of non-compliance throughout the audit.
 
We assessed the susceptibility of the Company’s financial statements to material misstatement, including
obtaining an understanding of how fraud might occur, by:
 
°making enquiries of management as to where they considered there was susceptibility to fraud, their
knowledge of actual, suspected and alleged fraud; and
 
°considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and
regulations.
 
To address the risk of fraud through management bias and override of controls, we:
 
°performed analytical procedures as a risk assessment tool to identify any unusual or unexpected
relationships;
 
°tested journal entries recorded on the Company’s finance system to identify unusual transactions that
may indicate override of controls;
 
°reviewed key judgements and estimates for any evidence of management bias.
 
°reviewed the application of accounting policies with focus on those with heightened estimation
uncertainty.

 
Page 7

 
VIRTUAL FM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VIRTUAL FM LIMITED (CONTINUED)


In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
 
°agreeing financial statement disclosures to underlying supporting documentation and
 
°enquiring of management to identify actual and potential litigation and claims.
 
Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some
material misstatements in the financial statements, even though we have properly planned and performed our
audit in accordance with auditing standards. For example, as with any audit, there remains a higher risk of nondetection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and
regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.


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


Other matters 
 

Comparative information in the financial statements is derived from the company's prior period financial statements which were not audited.


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 2006Our 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.





Martin Johnston (Senior Statutory Auditor)
  
for and on behalf of
Armstrong Watson Audit Limited
 
Chartered Accountants & Statutory Auditors
  
1st Floor 24 Blythswood Square
Glasgow
G2 4BG

12 February 2024
Page 8

 
VIRTUAL FM LIMITED
 

STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2023

2023
Unaudited
2022
Note
£
£

  

Turnover
 4 
13,137,446
10,847,783

Cost of sales
  
(7,231,787)
(7,704,301)

Gross profit
  
5,905,659
3,143,482

Administrative expenses
  
(5,566,880)
(3,533,414)

Other operating income
 5 
3,872
8,500

Operating profit/(loss)
 6 
342,651
(381,432)

Interest receivable and similar income
 10 
157
500

Interest payable and similar expenses
 11 
(40,268)
(57,635)

Profit/(loss) before tax
  
302,540
(438,567)

Tax on profit/(loss)
 12 
(74,035)
89,943

Profit/(loss) after tax
  
228,505
(348,624)

  

  

Retained earnings at the beginning of the year
  
(237,936)
110,688

  
(237,936)
110,688

Profit/(loss) for the year
  
228,505
(348,624)

Retained earnings at the end of the year
  
(9,431)
(237,936)
The notes on pages 11 to 22 form part of these financial statements.

Page 9

 
VIRTUAL FM LIMITED
REGISTERED NUMBER: SC517801

STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023

2023
Unaudited
2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
3,141
3,880

Tangible assets
 14 
143,409
216,587

  
146,550
220,467

Current assets
  

Debtors: amounts falling due within one year
 15 
2,729,722
2,105,816

Cash at bank and in hand
 16 
61,924
30,259

  
2,791,646
2,136,075

Creditors: amounts falling due within one year
 17 
(2,925,105)
(2,594,378)

Net current liabilities
  
 
 
(133,459)
 
 
(458,303)

Total assets less current liabilities
  
13,091
(237,836)

Provisions for liabilities
  

Deferred tax
 18 
(22,422)
-

  
 
 
(22,422)
 
 
-

Net liabilities
  
(9,331)
(237,836)


Capital and reserves
  

Called up share capital 
 19 
100
100

Profit and loss account
  
(9,431)
(237,936)

  
(9,331)
(237,836)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
Grant James Currie
Director
Date: 12 February 2024

The notes on pages 11 to 22 form part of these financial statements.

Page 10

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


General information

Virtual FM Limited is a private company, limited by shares, incorporated in Scotland. The company's registered number is SC517801 and registered office address and principal place of business is Westpoint House, 5 Redwood Place, Peel Park, East Kilbride, South Lanarkshire, Scotland, G74 5PB.
The financial statements are presented in pound sterling as this is the currency of the primary economic environment in which the company operates.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).

The following principal accounting policies have been applied:

  
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
 
the requirements of Section 7 Statement of Cash Flows;
 
the requirements of Section 3 Financial Statement Presentation paragraph 3.17 (d);

This information is included in the consolidated financial statements of Virtual Group Holdings Limited as at 31 March 2023 and these financial statements can be obtained from Companies House.

 
2.3

Going concern

In preparing these financial statements the Directors have given careful consideration to current and anticipated future solvency requirements of the Company and its ability to continue as a going concern for at least twelve months from the date of issue of these financial statements. 
The Directors have prepared these financial statements on a going concern basis, notwithstanding  net liabilities of £9,331 (2022 - £228,505) as at 31 March 2023 and a profit for the 12 month period then ended of £228,505 (2022 - loss of  £348,624).
The Directors have undertaken a detailed forecasting review of the company's current and future contractual and reactive work orders. As a result of this exercise the Director's anticipate that significant cost savings will be realised in future periods. This coupled with improved pricing on new and renegotiated current contracts, will lead to significant improvements in the Company's working capital. Currently available credit facilities are more than sufficient to meet the Company's current and forecast obligations as they fall due, without the need for additional financing to be secured.
Based on the above, the Directors believe that at the date of issue of these financial statements that it remains appropriate to prepare the financial statements on a going concern basis.

Page 11

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

Operating leases: the company as lessee

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

 
2.6

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Income and Retained Earnings in the same period as the related expenditure.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Pensions

Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.

Page 12

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.11

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Computer software
-
3
years

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 13

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)


2.12
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, the following methods.

Depreciation is provided on the following basis:

Plant and machinery
-
33%
straight-line
Motor vehicles
-
20%
straight-line
Fixtures and fittings
-
10%
straight-line
Office equipment
-
33%
straight-line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

 
2.17

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Page 14

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are not required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources.
 


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sales
13,137,446
10,847,783

13,137,446
10,847,783


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
13,137,446
10,847,783

13,137,446
10,847,783



5.


Other operating income

2023
2022
£
£

Government grants receivable
3,872
8,500

3,872
8,500



6.


Operating profit/(loss)

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

2023
2022
£
£

Other operating lease rentals
34,389
46,643

Page 15

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

7.


Auditors' remuneration

During the year, the company obtained the following services from the company's auditors:


2023
2022
£
£

Fees payable to the company's auditors for the audit of the company's financial statements
18,000
-

The company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent company.


8.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
4,190,876
2,408,780

Cost of defined contribution scheme
68,453
48,238

4,259,329
2,457,018


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Staff
219
90


9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
181,534
100,106

Company contributions to defined contribution pension schemes
2,091
1,480

183,625
101,586


During the year retirement benefits were accruing to one directors (2022 - one) in respect of defined contribution pension schemes.

Page 16

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

10.


Interest receivable

2023
2022
£
£


Other interest receivable
157
500

157
500


11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
39,718
38,497

Finance leases and hire purchase contracts
285
570

Other interest payable
265
18,568

40,268
57,635


12.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
(609)
-


(609)
-


Total current tax
(609)
-

Deferred tax


Origination and reversal of timing differences
74,644
(89,943)

Total deferred tax
74,644
(89,943)


Tax on profit/(loss)
74,035
(89,943)
Page 17

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit/(loss) on ordinary activities before tax
302,540
(438,567)


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
58,734
-

Effects of:


Fixed Asset Differences
(2,005)
-

Short-term timing difference leading to an increase (decrease) in taxation
(608)
-

Remeasurement of deferred tax for changes in tax rates
17,914
-

Deferred tax released/utilised in the year
-
11,523

Unrelieved tax losses carried forward
-
(101,466)

Total tax charge for the year
74,035
(89,943)


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 18

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

13.


Intangible assets




Computer software

£



Cost


At 1 April 2022
9,108


Additions
2,700



At 31 March 2023

11,808



Amortisation


At 1 April 2022
5,228


Charge for the year on owned assets
3,439



At 31 March 2023

8,667



Net book value



At 31 March 2023
3,141



At 31 March 2022
3,880



Page 19

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

14.


Tangible fixed assets





Plant and machinery
Motor vehicles
Fixtures and fittings
Office equipment
Total

£
£
£
£
£



Cost or valuation


At 1 April 2022
204,409
62,909
15,836
95,516
378,670


Additions
26,942
-
-
20,375
47,317



At 31 March 2023

231,351
62,909
15,836
115,891
425,987



Depreciation


At 1 April 2022
98,263
17,496
4,097
42,228
162,084


Charge for the year on owned assets
71,049
15,369
1,594
32,482
120,494



At 31 March 2023

169,312
32,865
5,691
74,710
282,578



Net book value



At 31 March 2023
62,039
30,044
10,145
41,181
143,409



At 31 March 2022
106,146
45,413
11,739
53,289
216,587


15.


Debtors

2023
2022
£
£


Trade debtors
1,733,162
1,255,063

Other debtors
464,617
314,434

Prepayments and accrued income
531,943
484,097

Deferred taxation
-
52,222

2,729,722
2,105,816



16.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
61,924
30,259

61,924
30,259


Page 20

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

17.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
1,127,632
1,527,300

Corporation tax
71,126
-

Other taxation and social security
460,897
260,459

Obligations under finance lease and hire purchase contracts
-
2,187

Other creditors
690,649
486,287

Accruals and deferred income
574,801
318,145

2,925,105
2,594,378


RBS Invoice Financing Limited holds a floating charge over the whole of the property and undertaking of Virtual FM Limited.


18.


Deferred taxation




2023
2022


£

£






At beginning of year
52,222
(37,721)


Charged to profit or loss
(22,422)
89,943


Utilised in year
(52,222)
-



At end of year
(22,422)
52,222

The deferred taxation balance is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(28,797)
(49,244)

Tax losses carried forward
3,400
101,466

Short term timing differences
2,975
-

(22,422)
52,222


19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



100 (2022 - 100) Ordinary shares of £1.00 each
100
100


Page 21

 
VIRTUAL FM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

20.


Reserves

Profit and loss account

As at 31 March 2023, the company had negative reserves of (£9,431) (2022: (£237,936)).


21.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £66,361 (2022 - £46,759) Contributions totalling £11,900 (2022 - £12,749) were payable to the fund at the reporting date and are included in creditors.


22.


Commitments under operating leases

At 31 March 2023 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
101,875
126,755

Later than 1 year and not later than 5 years
47,481
136,863

149,356
263,618


23.


Transactions with directors

As at 31 March 2023, the directors owed Virtual FM Limited £216,592 (2022: £157,877). During the year there were amounts advanced of £58,716 and amounts repaid of £nil. The loan is interest-free and repayable on demand.
Post year end the director's loan account has been reasigned to the parent entity Virtual Group Holdings Limited.


24.


Related party transactions

As at 31 March 2023, Virtual FM Limited was owed £151,508 (2022: £131,942) by a company under common control. The amounts are unsecured, interest-free and repayable on demand.
As at 31 March 2023, Virtual FM Limited was owed £15,343 (2022: £14,029) by a company under common control. The amounts are unsecured, interest-free and repayable on demand.
 


25.


Controlling party

The ultimate controlling party is Virtual Group Holdings Limited by virtue of its shareholding in Virtual FM Limited.


Page 22