FWM INVESTMENTS LIMITED
No. SC115754
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
FWM INVESTMENTS LIMITED
COMPANY INFORMATION
Director
Fraser Milne
Company number
SC115754
Registered office
Oldmeldrum Road
Inverurie
Aberdeenshire
AB51 0TP
Auditor
Hall Morrice LLP
6 & 7 Queens Terrace
Aberdeen
AB10 1XL
Business address
Oldmeldrum Road
Inverurie
Aberdeenshire
AB51 0TP
Bankers
Royal Bank of Scotland
21 Market Place
Inverurie
Aberdeenshire
AB51 3PU
Solicitors
The Kellas Partnership
2-6 High Street
Inverurie
Aberdeenshire
AB51 3XQ
FWM INVESTMENTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 33
FWM INVESTMENTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2023
- 1 -

The director presents the strategic report for the year ended 31 August 2023.

Principal activities

The principal activities of the group during the period were the operation of a garden centre and property development, and the ownership and letting of commercial property in Aberdeenshire.

Fair review of the business

The company realised a pre-tax profit of £299,730 (2022 - £3,381,251). The fall in the profit is mainly due to purchase and sale of an investment property and dividends received from subsidiaries of £1,935,750 during the prior year. The board recognises that the commercial property market in Aberdeenshire has weakened as a consequence of the challenges faced by both the energy sector and the impact of Covid-19 and thus is satisfied that the total rental income has remained fairly consistent.

 

The company's cash position remains robust, with adequate cash reserves available to meet all known outgoings. Having made due enquiry, the board is satisfied that the level and type of gearing is the most appropriate means of financing the business, mainly due to the long term nature of the portfolio.

 

The company's subsidiary is engaged in two principal business activities, the first being the operation of a garden centre with machinery department and restaurant, the second is commercial property development in the North East of Scotland. The level of activity has been satisfactory given prevailing economic conditions. The board remains alert to all opportunities to increase sales and reduce costs, whilst maintaining a robust business platform.

Principal risks and uncertainties

Commercial property market

The company is exposed to the risk of loss of rental income and a potential fall in the value of investment properties held.

 

The prominence of the energy industry in the North East of Scotland means the local economy is influenced heavily by the fortunes of that sector. The company's exposure to this risk is high due to the nature of the commercial properties held and the business carried on by its tenants.

 

The board takes all reasonable steps to ensure that fit and proper tenants occupy the investment properties under suitable lease arrangements. Such approach is designed to minimise the risk of rent loss, and provide sufficient cash flow to meet working capital requirements.

 

Investment properties are held on a long term basis and the board anticipate that they will appreciate in value over time such that any short term decline in value is temporary.

 

Seasonality

Due to the seasonal nature of the majority of products offered by the garden centre, sales levels are affected by changes in external influences such as the weather.

 

The board mitigates this risk by operating a just in time system for large items of machinery which enables the business to supply items of equipment suitable to the prevailing season without allocating significant amounts of capital into stock and avoiding obsolescence.

 

In addition, the company seeks to maintain minimum levels of seasonal stock and a varied product mix without compromising customer choice.

Development and performance

The group enjoys a robust balance sheet with strong reserves.

 

Despite the current economic conditions in the North East business activity and resultant profits have not been adversely affected.

 

The board is content that a strong investment property portfolio has been established over the years. The commercial portfolio comprises of seven properties which are let under commercial leases.

FWM INVESTMENTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 2 -
Key performance indicators

Turnover for the garden centre has increased by approximately 9% from £3,173,377 in 2022 to £3,445,146 in 2023 and gross profit percentage in respect of the garden centre trade has remained fairly consistent at around 50%. The board remains vigilant to competitor activity and customer preferences in order to maintain both volume and margin.

 

The rental income yield remained consistent in 2023 at 5% (2022: 5%) of the carrying value of investment properties. This is even with the sales of the property at Kirkhill Commercial Park, Aberdeen and purchase of the Building 6 Westpoint.

 

Turnover from regular trading activities decreased in 2023 to £280,020, which is a 45% fall from the 2022 figure of £510,446. When the gain on sale of the properties in both years is ignored, administration costs remain consistent.

Other information and explanations

The board's core plan is to maintain the yield generated by the investment properties, whilst seeking further opportunities to add to the portfolio and consolidate the garden centre business.

 

The company’s principal tenants are primarily large entities with respectable covenants which should offer comfort and, while current economic conditions may result in rental negotiations in order to assist some tenants in the short term, the board anticipates that the overall effect on the company’s rental income will be manageable.

 

The board acknowledges that the audit report has been qualified by virtue of failing to get an independent valuation undertaken in respect of the trading premises of its subsidiary.

 

The board is aware of the need to service the existing bank loan and considers that the company enjoys sufficient cash reserves to do so.

On behalf of the board

Fraser Milne
Director
30 August 2024
FWM INVESTMENTS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 AUGUST 2023
- 3 -

The director presents his report and audited financial statements for the year ended 31 August 2023.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Fraser Milne
Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The director does not recommend payment of a further dividend.

Future developments

Information on future developments is included with the Strategic report on page 1.

Auditor

Hall Morrice LLP were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of director's responsibilities

The director is responsible for preparing the Strategic report, 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 elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the 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 for that period. In preparing these financial statements, the director is required to:

 

 

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group’s 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. He is also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company and group is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company and group is aware of that information.

FWM INVESTMENTS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 4 -
On behalf of the board
Fraser Milne
Director
30 August 2024
FWM INVESTMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FWM INVESTMENTS LIMITED
- 5 -
Opinion

We have audited the financial statements of FWM Investments Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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:

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.

Opinions on other matters prescribed by the Companies Act 2006

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

FWM INVESTMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FWM INVESTMENTS LIMITED
- 6 -
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 their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's 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:

 

Responsibilities of director

As explained more fully in the director's responsibilities statement, as set out in the Director's report, 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 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 director is responsible for assessing 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 parent company or to cease operations, or has no realistic alternative but to do so.

Auditor's 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 auditor's 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

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.

In identifying and assessing the risk of material misstatement due to non-compliance with laws and regulations we

have:

 

FWM INVESTMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FWM INVESTMENTS LIMITED
- 7 -

In identifying and assessing the risk of material misstatement due to irregularities, including fraud and how it may occur, and the potential for management bias and the override of controls we have:

 

We did not identify any matters relating to non-compliance with laws and regulations, or relating to fraud.

 

Because of the inherent limitations of an audit, there is an unavoidable risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk of not detecting a material misstatement due to fraud is inherently more difficult than detecting those that result from error as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. In addition, the further removed any non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the group’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 group’s members those matters we are required to state to them in an auditor's 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 group and the group’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Robert J C Bain MA CA CTA
Senior Statutory Auditor
For and on behalf of Hall Morrice LLP
Statutory Auditor
Aberdeen
30 August 2024
FWM INVESTMENTS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
3,722,409
6,085,793
Cost of sales
(1,946,913)
(3,412,549)
Gross profit
1,775,496
2,673,244
Administrative expenses
(1,291,232)
(1,438,311)
Other operating income
-
8,259
Operating profit
4
484,264
1,243,192
Interest receivable and similar income
7
75,802
3,276
Interest payable and similar expenses
8
(152,406)
(137,690)
Amounts written off investments
9
-
(268,499)
Profit before taxation
407,660
840,279
Tax on profit
10
74,252
(28,062)
Profit for the financial year
25
481,912
812,217
Profit for the financial year is attributable to:
- Owner of the parent company
462,397
1,267,568
- Non-controlling interests
19,515
(455,351)
481,912
812,217
Total comprehensive income for the year is attributable to:
- Owner of the parent company
462,397
1,267,568
- Non-controlling interests
19,515
(455,351)
481,912
812,217

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.false

FWM INVESTMENTS LIMITED
GROUP BALANCE SHEET
AS AT 31 AUGUST 2023
31 August 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
12
6,085
-
0
Tangible assets
13
2,039,776
2,059,952
Investment properties
14
5,431,754
5,122,850
7,477,615
7,182,802
Current assets
Stocks
17
877,014
855,045
Debtors
18
1,155,530
237,095
Cash at bank and in hand
3,318,281
5,174,498
5,350,825
6,266,638
Creditors: amounts falling due within one year
19
(1,899,193)
(1,777,281)
Net current assets
3,451,632
4,489,357
Total assets less current liabilities
10,929,247
11,672,159
Creditors: amounts falling due after more than one year
20
(2,156,542)
(3,330,301)
Provisions for liabilities
22
(174,674)
(225,739)
Net assets
8,598,031
8,116,119
Capital and reserves
Called up share capital
24
100
100
Profit and loss reserves
25
8,157,233
7,694,836
Equity attributable to owner of the parent company
8,157,333
7,694,936
Non-controlling interests
440,698
421,183
8,598,031
8,116,119
The financial statements were approved and signed by the director and authorised for issue on 30 August 2024
30 August 2024
Fraser Milne
Director
FWM INVESTMENTS LIMITED
COMPANY BALANCE SHEET
AS AT 31 AUGUST 2023
31 August 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
887
1,588
Investment properties
14
5,431,754
5,122,850
Investments
15
41,000
41,000
5,473,641
5,165,438
Current assets
Debtors
18
559,011
126,506
Cash at bank and in hand
1,899,758
3,217,290
2,458,769
3,343,796
Creditors: amounts falling due within one year
19
(524,172)
(472,402)
Net current assets
1,934,597
2,871,394
Total assets less current liabilities
7,408,238
8,036,832
Creditors: amounts falling due after more than one year
20
(1,027,454)
(1,984,186)
Provisions for liabilities
22
(65,770)
(112,290)
Net assets
6,315,014
5,940,356
Capital and reserves
Called up share capital
24
100
100
Profit and loss reserves
25
6,314,914
5,940,256
Total equity
6,315,014
5,940,356

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £374,658 (2022 - £3,200,724 profit).

The financial statements were approved and signed by the director and authorised for issue on 30 August 2024
30 August 2024
Fraser Milne
Director
Company Registration No. SC115754
FWM INVESTMENTS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023
- 11 -
Share capital
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
Balance at 1 September 2021
100
6,935,343
6,935,443
876,534
7,811,977
Year ended 31 August 2022:
Profit and total comprehensive income for the year
-
1,267,568
1,267,568
(455,351)
812,217
Dividends
11
-
(508,075)
(508,075)
-
(508,075)
Balance at 31 August 2022
100
7,694,836
7,694,936
421,183
8,116,119
Year ended 31 August 2023:
Profit and total comprehensive income for the year
-
462,397
462,397
19,515
481,912
Balance at 31 August 2023
100
8,157,233
8,157,333
440,698
8,598,031
FWM INVESTMENTS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 September 2021
100
3,239,532
3,239,632
Year ended 31 August 2022:
Profit and total comprehensive income for the year
-
3,200,724
3,200,724
Dividends
11
-
(500,000)
(500,000)
Balance at 31 August 2022
100
5,940,256
5,940,356
Year ended 31 August 2023:
Profit and total comprehensive income for the year
-
374,658
374,658
Balance at 31 August 2023
100
6,314,914
6,315,014
FWM INVESTMENTS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
29
(153,131)
1,443,965
Interest paid
(152,406)
(137,690)
Income taxes paid
(110,766)
(62,039)
Net cash (outflow)/inflow from operating activities
(416,303)
1,244,236
Investing activities
Purchase of intangible assets
(6,085)
-
Purchase of tangible fixed assets
(5,782)
(42,254)
Proceeds on disposal of tangible fixed assets
-
812
Purchase of investment property
(1,516,754)
(1,207,850)
Proceeds on disposal of investment property
1,668,729
1,620,000
Inflow from other investments and loans
-
386,726
Other loans made
(821,826)
-
Interest received
75,802
3,276
Net cash (used in)/generated from investing activities
(605,916)
760,710
Financing activities
Repayment of bank loans
(886,880)
(776,400)
Dividends paid to equity shareholders
-
(508,075)
Net cash used in financing activities
(886,880)
(1,284,475)
Net (decrease)/increase in cash and cash equivalents
(1,909,099)
720,471
Cash and cash equivalents at beginning of year
5,174,498
4,454,027
Cash and cash equivalents at end of year
3,265,399
5,174,498
Relating to:
Cash at bank and in hand
3,318,281
5,174,498
Bank overdrafts included in creditors payable within one year
(52,882)
-
FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
- 14 -
1
Accounting policies
1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

 

The company is a qualifying entity for the purposes of FRS 102, being the parent of a group that prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company FWM Investments Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 August 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

1.4
Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies (continued)
- 15 -
1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 

Revenue for the provision of services is recognised by reference to the date on which services were rendered.

 

Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.

 

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

 

Goodwill recognised on the acquisition of subsidiary was negative and has been fully written down.

1.7
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Website
10 years straight line
1.8
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
4% straight line
Plant and machinery
25% straight line
Fixtures and fittings
25% straight line
Motor vehicles
25% straight line
Hire assets
25% straight line
FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies (continued)
- 16 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

 

The directors have reviewed the expected residual value of the freehold, property and expect the residual value of the freehold property in 20 years, based on current market conditions, to be at least the carrying value of the property. the freehold property is expected to have an economic useful life of 20 years an thus, no deprecation has been charged on it.

1.9
Investment properties

Investment properties, which are properties held to earn rentals and/or for capital appreciation, are measured using the fair value model and stated at their fair value as at the reporting date. Fair value gains and losses on investment properties are recognised in profit or loss. Fair value gains, and fair value losses to the extent that they reverse a previous fair value gain on the same investment properties, are transferred from the profit and loss reserves to the fair value reserve during the year in which they arise.

 

Where fair value cannot be achieved without undue cost or effort, investment properties are accounted for as tangible fixed assets.

1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies (continued)
- 17 -
1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.12
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.13
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.14
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

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

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies (continued)
- 18 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies (continued)
- 19 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.16
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies (continued)
- 20 -
1.17
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.18
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.19
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 21 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Stock provisions

Stock held for resale is valued at the lower of cost and net realisable value. Realisable value includes, where necessary, a provision for slow moving and obsolete stock. Calculation of provision requires judgements to be made, which include forecast consumer demand, the economic environment in which the company operate, and stock shrinkage trends.

Property valuations

On an annual basis the directors review the carrying value of the freehold property and investment properties for evidence of impairments and fair value fluctuations respectively. The directors have experience in commercial properties in the local area and have a good understanding of the commercial property market in the North East of Scotland. Various factors are considered by the directors whilst carrying out their review, such as the properties' current state of repair, the commercial property market in the North East of Scotland and general market conditions in the local area.

 

Where the directors believe the value of the freehold property is less than its carrying value an impairment charge will be recognised in the accounts. Where the directors believe the fair value of the investment property is less than the carrying value, a fair value adjustments will be recognised in the accounts.

Operating lease commitments

The group has entered into commercial property leases as a lessor on its investment property portfolio. The classification of such leases as operating or finance lease requires the group to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires an asset and liability to be recognised in the statement of financial position.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful economic lives of intangible fixed assets other than goodwill

The annual amortisation charge for intangible assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments and economic utilisation. See note 12 for the carrying amount of each asset and note 1.7 for the useful economic lives for each class of asset.

Useful economic lives of tangible fixed assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 13 for the carrying amount of each asset and note 1.8 for the useful economic lives for each class of asset.

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
2
Judgements and key sources of estimation uncertainty (continued)
- 22 -
Revaluation of investment properties

The Group carries its investment properties at fair value, with changes in fair value being recognised in profit or loss. The fair value at each reporting date is normally determined by the directors at estimated market value. Annual professional valuations are not obtained due to the cost involved and the fact that the directors have no intention to sell the investment properties in the medium to long term. Periodic professional valuations are obtained when there is considered to have been a material change in the economic environment. See note 14 for the carrying amount of the investment properties.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Property business income
277,263
2,377,416
Garden centre income
3,445,146
3,708,377
3,722,409
6,085,793
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
3,722,409
6,085,793
2023
2022
£
£
Other revenue
Interest income
75,802
3,276
Grants received
-
8,259
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Fees payable to the company's auditor for the audit of the company's financial statements
40,225
32,000
Government grants
-
(8,259)
Depreciation of owned tangible fixed assets
25,958
37,183
Profit on disposal of tangible fixed assets
(460,879)
(147,219)
FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 23 -
5
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Director
1
1
1
1
Garden centre operations
78
77
-
-
Total
79
78
1
1

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
1,063,485
977,708
-
0
-
0
Social security costs
67,993
56,391
-
-
Pension costs
63,856
54,296
-
0
-
0
1,195,334
1,088,395
-
0
-
0
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
78,871
86,033
Company pension contributions to defined contribution schemes
4,722
3,441
83,593
89,474

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
75,802
3,276

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
75,802
3,276
FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 24 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
111,779
46,232
Other finance costs:
Other interest
40,627
91,458
Total finance costs
152,406
137,690
9
Amounts written off investments
2023
2022
£
£
Changes in the fair value of investment properties
-
(432,767)
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
195,900
Adjustments in respect of prior periods
(23,187)
(63,684)
Total current tax
(23,187)
132,216
Deferred tax
Origination and reversal of timing differences
(51,065)
(104,154)
Total tax (credit)/charge
(74,252)
28,062

Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2023 (on 10 January 2023). These changes included an increase in the main rate to 25% from April 2023. Deferred taxes at the balance sheet date, in relation to UK companies, are measured using tax rates enacted as at the balance sheet date (25%).

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
10
Taxation (continued)
- 25 -

The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
407,660
840,279
Expected tax charge based on the standard rate of corporation tax in the UK of 22% (2022: 19%)
87,728
159,653
Tax effect of expenses that are not deductible in determining taxable profit
12,037
150,556
Gains not taxable
-
0
(27,972)
Effect of change in corporation tax rate
(932)
-
Permanent capital allowances in excess of depreciation
(97,434)
(4,111)
Effect of revaluations of investments
-
0
(82,226)
Over provided in prior years
(30,935)
(63,684)
Movement in deferred tax
-
0
(104,154)
Other tax adjustments, reliefs and transfers
(10,179)
-
0
Movement in deferred tax not recognised
(34,537)
-
0
Taxation (credit)/charge
(74,252)
28,062
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
-
500,000
12
Intangible fixed assets
Group
Negative goodwill
Website
Total
£
£
£
Cost
At 1 September 2022
(2,586,593)
-
0
(2,586,593)
Additions
-
0
6,085
6,085
At 31 August 2023
(2,586,593)
6,085
(2,580,508)
Amortisation and impairment
At 1 September 2022 and 31 August 2023
(2,586,593)
-
0
(2,586,593)
Carrying amount
At 31 August 2023
-
0
6,085
6,085
At 31 August 2022
-
0
-
0
-
0
The company had no intangible fixed assets at 31 August 2023 or 31 August 2022.
FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 26 -
13
Tangible fixed assets
Group
Freehold land and buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Hire assets
Total
£
£
£
£
£
£
Cost
At 1 September 2022
2,000,000
32,962
390,539
66,048
24,636
2,514,185
Additions
-
0
129
5,653
-
0
-
0
5,782
At 31 August 2023
2,000,000
33,091
396,192
66,048
24,636
2,519,967
Depreciation and impairment
At 1 September 2022
-
0
28,392
335,157
66,048
24,636
454,233
Depreciation charged in the year
-
0
1,459
24,499
-
0
-
0
25,958
At 31 August 2023
-
0
29,851
359,656
66,048
24,636
480,191
Carrying amount
At 31 August 2023
2,000,000
3,240
36,536
-
0
-
0
2,039,776
At 31 August 2022
2,000,000
4,570
55,382
-
0
-
0
2,059,952
Company
Fixtures and fittings
£
Cost
At 1 September 2022 and 31 August 2023
3,976
Depreciation and impairment
At 1 September 2022
2,388
Depreciation charged in the year
701
At 31 August 2023
3,089
Carrying amount
At 31 August 2023
887
At 31 August 2022
1,588
FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 27 -
14
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 September 2022
5,122,850
5,122,850
Additions through external acquisition
1,516,754
1,516,754
Disposals
(1,207,850)
(1,207,850)
At 31 August 2023
5,431,754
5,431,754

Valuations of four of the companies investment properties were undertaken in February 2022 by J&E Shepard, chartered surveyors. The carrying value of such properties has been adjusted to reflect the market value as at 20 February 2022.

 

There are three other properties held by the business, one of which was purchased by the company in April 2022 so the consideration paid is reflective of the current, market value of the priority. The remaining two properties wee subject to revaluation 9 February 2019. base don upon the directors' knowledge of the local commercial property market as at 31 August 2023, the board considers the carrying value of those investment properties to be reflected in the financial statements at a fair value.

15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
41,000
41,000
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost
At 1 September 2022 and 31 August 2023
41,000
Carrying amount
At 31 August 2023
41,000
At 31 August 2022
41,000
16
Subsidiaries

Details of the company's subsidiaries at 31 August 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
FWM Limited
Scotland
Garden centre
Ordinary A
81.00
-
FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 28 -
17
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods and goods for resale
877,014
855,045
-
0
-
0
18
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
218,078
110,602
49,226
35,055
Corporation tax recoverable
21,602
21,602
-
0
-
0
Amounts owed by group undertakings
-
-
-
28,493
Other debtors
912,544
90,718
507,996
61,169
Prepayments and accrued income
3,306
14,173
1,789
1,789
1,155,530
237,095
559,011
126,506
19
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
21
339,761
-
0
178,366
-
0
Other borrowings
21
679,960
679,960
-
0
-
0
Trade creditors
256,809
307,412
-
0
59,355
Amounts owed to group undertakings
-
0
-
0
18,389
-
0
Corporation tax payable
195,756
329,709
195,637
259,792
Other taxation and social security
208,926
172,938
72,034
93,509
Other creditors
93,518
170,420
14,638
14,638
Accruals and deferred income
124,463
116,842
45,108
45,108
1,899,193
1,777,281
524,172
472,402
FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 29 -
20
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
21
1,015,160
2,188,919
906,012
1,862,744
Other borrowings
21
1,141,382
1,141,382
121,442
121,442
2,156,542
3,330,301
1,027,454
1,984,186
Amounts included above which fall due after five years are as follows:
Payable by instalments
242,480
-
-
-
Payable other than by instalments
-
2,000,000
-
-
242,480
2,000,000
-
-
21
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
1,302,039
2,188,919
1,084,378
1,862,744
Bank overdrafts
52,882
-
0
-
0
-
0
Preference shares
1,699,900
1,699,900
-
0
-
0
Other loans
121,442
121,442
121,442
121,442
3,176,263
4,010,261
1,205,820
1,984,186
Payable within one year
1,019,721
679,960
178,366
-
0
Payable after one year
2,156,542
3,330,301
1,027,454
1,984,186

Bank loans

The long-term loans are secured by fixed charges over the freehold property and investment properties held by the group, and floating charges over the assets of the group.

 

FWM Investments Limited has provided security to the bank in respect of the bank loan held by FWM Limited, by way of a standard security over its investment properties and a floating charge over the company's assets.

 

The group has long term bank loans with the Royal Bank of Scotland. These loans are secured and interest is charged at 2.15% - 2.75% over LIBOR. The term of the loans vary from 1 to 5 years.

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
21
Loans and overdrafts (continued)
- 30 -

Preference Shares

The preference shares are non-voting and rank pari-passu in all other aspects with the ordinary shares. Such shares have been classified as long term liabilities. Preference shareholders are entitled to an annual fixed dividend.

 

The preference shares are redeemable either in full, or in tranches of not less than 8,900 shares, at the option of the company. The preference shareholders have the option of seeking redemption in tranches of not less than 4,450 shares and not more than 8,900 shares in any 12 month period. The amount payable on redemption is £38.20 per share, representing the par value of £1 together with a premium of £37.20.

 

Included in current liabilities is the maximum liability relating to the redemption of these shares that could be initiated by the preference shareholders in the next 12 months. The remaining redemption liability has been included in long term liabilities.

 

22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
(26,224)
8,787
Tax losses
(32,157)
(16,730)
Revaluation of freehold property
-
104,662
Retirement benefit obligations
(627)
-
Investment property
233,682
129,020
174,674
225,739
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
(31,093)
-
Tax losses
(32,157)
(16,730)
Investment property
129,020
129,020
65,770
112,290
FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
22
Deferred taxation (continued)
- 31 -
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 September 2022
225,739
112,290
Credit to profit or loss
(51,065)
(46,520)
Liability at 31 August 2023
174,674
65,770

The board does not have any plans to dispose of either the freehold or investment properties in the coming year. Therefore the movement in the deferred tax liability in the next 12 months is expected to be minimal.

 

The portion of the deferred tax liability above which relates to accelerated capital allowances is expected to reverse:

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
63,856
54,296

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
25
Reserves
Profit and loss reserves

This reserve records the accumulated distributable profits made by the company net of distributions to shareholders.

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 32 -
26
Operating lease commitments
Lessor

The operating leases represent leases of commercial properties to third parties. The leases are negotiated over terms of 5 to 15 years. The majority of leases include a provision for five-yearly upward rent reviews according to prevailing market conditions.

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
499,000
761,410
249,500
380,705
Between two and five years
1,341,336
2,639,460
670,668
1,319,730
In over five years
866,630
2,229,430
433,315
1,114,715
2,706,966
5,630,300
1,353,483
2,815,150
27
Related party transactions

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Other related parties
71,003
141,074
Company
Entities over which the company has control, joint control or significant influence
18,389
-

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2022
Balance
Balance
£
£
Company
Entities over which the company has control, joint control or significant influence
-
28,493
28
Directors' transactions

Dividends totalling £0 (2022 - £500,000) were paid in the year in respect of shares held by the company's directors.

As at 31 August 2023, the company was due the directors amounts totalling £404,548 (2022 - £82,722). This loan is interest free with no set repayment terms.

FWM INVESTMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 33 -
29
Cash (absorbed by)/generated from group operations
2023
2022
£
£
Profit for the year after tax
481,912
812,217
Adjustments for:
Taxation (credited)/charged
(74,252)
28,062
Finance costs
152,406
137,690
Investment income
(75,802)
(3,276)
Gain on disposal of tangible fixed assets
(460,879)
-
Fair value loss on investment properties
-
0
268,499
Depreciation and impairment of tangible fixed assets
25,958
37,183
Movements in working capital:
(Increase)/decrease in stocks
(21,969)
262,527
Increase in debtors
(96,609)
(77,638)
Decrease in creditors
(83,896)
(21,299)
Cash (absorbed by)/generated from operations
(153,131)
1,443,965
30
Analysis of changes in net funds - group
1 September 2022
Cash flows
31 August 2023
£
£
£
Cash at bank and in hand
5,174,498
(1,856,217)
3,318,281
Bank overdrafts
-
0
(52,882)
(52,882)
5,174,498
(1,909,099)
3,265,399
Borrowings excluding overdrafts
(4,010,261)
886,880
(3,123,381)
1,164,237
(1,022,219)
142,018
31
Company information

FWM Investments Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Oldmeldrum Road, Inverurie, Aberdeenshire, AB54 0TP.

 

The group consists of FWM Investments Limited and all of its subsidiaries.

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