The directors present the strategic report for the year ended 30 October 2023.
As in previous years the group has no continuing trade and instead exists solely to hold investments in the Four Seasons Group and loan notes issued. In the current year the interest on the loan notes has been formally waived by the note holder, resulting in a significant write back of interest accrued to date which totals £27.4m. Additionally, the investments in the Four Seasons Group have continued to perform well, resulting in a reversal of the impairment previously made against them of £14.9m. These transactions have resulted in a significant profit of £42.3m for the year.
The results for the period and the financial position at the balance sheet date are considered satisfactory by the directors.
The Companies Act 2006 requires that the business review contains a description of the principal risks and uncertainties facing the group. It is true that the group, like most businesses is subject to a variety of risks which could have a negative impact on its performance and financial condition, including the general economic climate as well as specific industry sectors.
The directors believe that regular reviews ensure that the business is well placed to deal with any challenges, though the continuing economic uncertainties in the short to medium term.
The Board is responsible for the group’s systems of internal control and risk management, and for reviewing its effectiveness. In discharging and delegating that responsibility, the Board has regard to the balance of risk, cost and opportunity. The monitoring of risk by the group is also undertaken with the preparation of monthly management accounts comparing actual with budgeted figures, with material variances being reported on.
The position of the group at the balance sheet date remains reasonably strong, is in line with with directors expectations and can be summarised as follows:
Gross assets - £15,376,672 (2022 as restated: £6,915,043)
Shareholders negative equity - £270,441 (2022 as restated: £42,534,829)
The group monitors cash flow as part of its day to day control procedures. Current cash position and future cash requirements are closely tracked to ensure appropriate facilities are available as and when required.
The financial key performance indicator is operating profit which is summarised below:
Operating profit £42,264,388 (2022: £1,795,499 loss)
Future developments
The Four Seasons group, which consists of Latium Investments Partnership and it's subsidiaries are currently held for sale and are being actively marketed. A full list of subsidiaries is presented in note 8 of these financial statements.
The Directors of the company have acted in accordance with their duties codified in law, which include their duty to act in a way which they consider, in good faith, would most likely promote the success of the Company for the benefit of the members as a whole, having regards to all stakeholders and matters set out in s172(1) of the Companies Act 2016, including:
a) the likely consequences of any decision in the long term;
b) the interests of the company's employees;
c) the need to foster the company's business relationships with suppliers, customers and others;
d) the impact of the company's operations on the community and the environment;
e) the desirability of the company maintaining a reputation for high standards of business conduct; and
f) the need to act fairly as between members of the company.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 October 2023.
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
These are fully referenced in the strategic report.
The directors have had regard to the need to foster the company's business relationships with suppliers, customers and others, including on the principal decisions taken by the company during the financial year.
This is discussed in note 15.
This is discussed in the strategic report.
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
We have audited the financial statements of NE Investments Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 October 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, the company 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).
Basis for 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 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 directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
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.
We obtained an understanding of laws and regulations that affect the entity, focusing on those that had a direct effect on the financial statements or that had a fundamental effect on its operations.
Where considered necessary we enquired of those charged with governance, reviewed correspondence and reviewed meeting minutes for evidence of non-compliance with relevant laws and regulations.
We gained an understanding of the controls environment which includes the controls in place to prevent and detect fraud. We enquired of those charged with governance about any incidences of fraud that had taken place during the accounting period.
The risk of fraud and non-compliance with laws and regulations was discussed within the audit team and tests were planned and performed to address these risks.
We reviewed financial statements disclosures to assess compliance with relevant laws and regulations.
We enquired of those charged with governance about actual and potential litigation and claims.
We performed analytical procedures to identify any unusual or unexpected relationships that might indicate risks of material misstatement due to fraud.
In addressing the risk of fraud due to management override of internal controls we tested the appropriateness of journal entries and assessed whether the judgements made in making accounting estimates were indicative of a potential bias.
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 remained a higher risk of non-detection 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 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 company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an 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 company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
In the current year the interest accrued on loan notes has been formally waived by the note holder, resulting in a significant write back of interest accrued to date which totals £27.4m. The investments in the four seasons group have continued to perform well, resulting in a reversal of the impairment previously made against them of £14.9m. These transactions have resulted in a significant profit of £42.3m for the year.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £13,500 (2022 - £7,499 loss).
NE Investments Limited (“the company”) is a private limited company domiciled and incorporated in England
and Wales. The registered office is Hamilton House, Church Street, Altrincham, England, WA14 4DR.
The group consists of NE Investments Limited and all of its subsidiaries.
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 financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company NE Investments Limited together with all entities controlled by the parent company (its subsidiaries) except for those that are considered to be current asset investments held exclusively with a view to sale.
All financial statements are made up to 30 October 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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
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.
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.
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.
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, 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.
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.
The tax expense represents the sum of the tax currently payable and deferred 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 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.
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.
In the application of the group’s accounting policies, the directors are 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.
The average monthly number of persons (including directors) employed by the group and company during the year was:
In 2024 the Four Seasons Group entities, which represent the current asset investments, have demonstrated significant profitability at the EBITDA level and offers have been received from prospective buyers at values exceeding cost. Therefore the provision made against these investments has been reversed to recognise at full cost.
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's consolidated subsidiaries at 30 October 2023 are as follows:
The Group has taken advantage of the exemptions in S394A of the companies act and has not consolidated the subsidiary Glass House Construction Limited (and it's subsidiary) as these entities are considered to be Dormant.
The Group holds an investment in Latium Investments Partnership and it's subsidiaries. As these investments are all held with a view to sale they have been excluded from consolidation in line with FRS 102 Section 9 and instead presented as a current asset investment at cost less impairment. The unconsolidated subsidiaries have aggregate turnover of £116.5m, aggregated EBITDA of £10.8m and aggregated equity of £44.5m as at 30 October 2023.
A full list of the subsidiaries held indirectly through Latium Investments Partnership is:
Kennedy Property Investments LLC
Four Seasons LLC (NY)
Vitapodworld LLC (DE)
Wilmslow (Long Island) Properties LLC (NY)
Wilmslow (Alabama) Properties I LLC (DE)
Four Seasons Sunrooms LLC (NY)
Four Seasons Solar Products LLC (NY)
Latium USA Trading LLC (DE)
Four Seasons Brands LLC (DE)
Four Seasons Marketing LLC (DE)
Four Seasons Retail LLC (DE)
Four Seasons Outdoor Living Solutions LLC (NY)
Four Seasons Home Products LLC (DE)
Four Seasons Sunrooms of Texas LLC (TX)
Four Seasons Sunrooms of New Jersey LLC (NU)
Four Seasons Sunrooms of Georgia and South Carolina LLC (GA)
Four Seasons Sunrooms of North Carolina LLC (NC)
Four Seasons Sunrooms of New York LLC (NY)
Current asset investments reflect the group's investment in Latium Investments Partnership (DE) which is currently held for sale.
The long-term loans relate to loan stock issued in September 2006 & 2007.
There were no post balance sheet events which require disclosure at the balance sheet date.
The ultimate controlling party is Brian Kennedy.
The group held no cash and makes no cash transactions during the year.
The group held no cash and makes no cash transactions during the year.
An adjustment has been made to the comparative figures to reduce intercompany debtors and intercompany creditors by £381,582. This reflects changes in the amounts owed from the Four Seasons group to NE Investments on behalf of Latium Management Services during the prior year which were not previously recognised.