Registered number: 02810485
FGS Agri Limited
Annual report and financial statements
For the year ended 30 April 2024
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FGS Agri Limited
Company Information
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Statutory Auditor & Chartered Accountants
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FGS Agri Limited
Contents
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Independent auditors' report
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Statement of comprehensive income
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Statement of changes in equity
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Notes to the financial statements
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FGS Agri Limited
Strategic report
For the year ended 30 April 2024
The principal activities of FGS Agri are centred around the provision of bespoke agri-environmental solutions
utilising assets shared across the wide array of farming related activities. At the core of the business, farming and agricultural contracting take the focus however through diversification, listening to the latest trends and legislative movements, more emphasis has been placed upon environmental sustainability, greening schemes, recycling and creation of organic nutrient sources. Our established agricultural contracting division lends itself neatly to providing the resources to undertake a wrapped supply and delivery of the bespoke services required of our rural client base.
During the trading year, the company invested a further £13m on assets across all activities ensuring reliability within the core fleet used to service the agricultural and contracting services whilst also harnessing the latest technology and environmental considerate machinery in order to minimise carbon impact.
It is the Board’s decision to maintain the farming operations involving beef and cereal crop production interspersed with protein and oilseed cropping to form rotations aligned with recognised good agricultural practices. Establishment of trade deal post Brexit will enable further certainly in the commodity markets which will add a certain level of stability to build upon. Future years will see evaluation of the changing agri- environmental legislation which will determine the investment in new, innovative services which will present investment opportunities and marketed as managed services across the South East.
Principal risks and uncertainties
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The daily management of the businesses and the execution of the strategies are subject to several risks. The predominate business risks affecting the Company are:
Staff
Availability of both seasonal harvest labour and skilled permanent labour generally is causing concern and attention is focused on ensuring effective People Management by engaging with employees regularly including providing support as required, aiding retention of skilled personnel. To assist a dedicated Group Human Resources Director has been appointed looking after the People Assets of the businesses.
FGS Agri will continue promoting international agricultural labour placement initiatives through its network connections with fellow farming and agricultural contacting businesses in Australia, New Zealand and America.
Operating Costs
Through the year, increased costs of operation caused by inflationary pressures have been widely seen particularly with regards materials used for maintenance of property & machinery and secondly through escalating fuel prices have predominately impacted the business’s road transport services. These are being closely monitored and mitigated where possible rather than simply passed on to customers unless unavoidable. Investment in the latest machinery has also assisted in ensuring we have the most fuel-efficient assets within our operations, the benefit of which is passed through our services to our customers. The company is adopting EV technology where possible and applicable whilst acknowledging that our services are often remote and rurally located.
Equipment
The supply of new equipment has lagged through the year with many manufacturers quoting up to twelve month order to delivery periods makes the CAPEX replacement program challenging when existing equipment requirements for servicing and repair escalate. Early communication with key suppliers of future equipment requirements is being carried out, endeavouring to mitigate potential delays.
Page 1
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FGS Agri Limited
Strategic report (continued)
For the year ended 30 April 2024
Liquidity Risk
Regular increasing interest rates when funding expansion by borrowing is under close review, where possible, this continues to be minimised whilst ensuring the company has sufficient resources to meet the working capital needs of the business. A revolving credit facility setup during the year and invoice financing facilities are used to accommodate seasonal fluctuations and provide flexibility plus fund future growth opportunities.
Credit Risk
The majority of customers who wish to trade on credit terms are subject to regular credit verification procedures and must trade within the credit limit allowance granted to their account which will be inextricably linked to their credit rating provided by outsourced specialist industry rating services. Credit account customers will not be allowed to place further orders for goods and services which will exceed their approved rating. Prepayment is required from customers requiring services ahead of a trade account being approved.
Trade debtors are reviewed on a weekly basis and provision is made for doubtful debts where considered necessary. In the case where debtors cannot settle their account within the agreed terms, an orderly installment payment plan is established to provide a certain and regular balance reduction; during this period, no further business will be placed on the account.
Legislative risk
Environmental standards in the UK continue to improve and the company is committed to being at the forefront of legislation led change. Any such change is viewed as positive, presenting more opportunities for the early adopter and swiftly capitalising upon these opportunities wherever possible.
Health and safety
The Company is fully committed to the health and safety of all staff and any visitors of Company sites. Regular internal and external HSE led audits have been undertaken through the year with minor housekeeping centric improvements being recommended. Internal H&S managers routinely meet to share innovation and the latest best practice which is implemented relevant to the local operations within their jurisdiction. Ongoing staff one-to- one training and safety/hazard awareness courses are rolled out across the business locations as a matter of course.
The financial position of the company is considered to be strong by the Directors and is in line with their expectations. The strength of the company is improving further throughout the coming period although challenging weather conditions during the summer period affected some operations. Positive consistent cash generation continues which contributes to reinvestment in staff and assets.
Financial key performance indicators
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The Directors consider operating profit to be the key measure of performance of the business. During the year the Company generated an operating profit of £1.4mn (2023: £1.4mn) and a further strengthening of the balance sheet by £848k.
Post year end events
On 27 September 2024, the group acquired 50% of the shares of Direct Enviro Services Limited for £450,000 and acquired two additional properties for £1.36m.
Page 2
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FGS Agri Limited
Strategic report (continued)
For the year ended 30 April 2024
Directors' statement of compliance with duty to promote the success of the Company
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The Directors of the Company must act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing so they must have regard to the matters set out in the Companies Act 2006, section 172(1) and a Company must include a statement in its strategic report describing how the Directors have had regard to the matters set out in this section. These matters along with an explanation of how the Directors have had regard to them are summarised below as the Company’s section 172(1) statement:
(a) The likely consequences of any decision in the long term
Boards of large companies invariably delegate day-to-day management and decision-making to executive management. Directors should maintain oversight of a Company’s performance and ensure that management is acting in accordance with the strategy and plans agreed by a Board and its delegated authorities. The culture, values and standards that underpin this delegation should help ensure that when decisions are made their wider impact has been considered. A Board should also reserve certain matters for its own consideration so that it can exercise judgemental directly when making major decisions, and in doing so promote the success of the Company whilst having regard to all necessary matters. A Board needs assurance that a Company’s financial reporting, risk management, governance and internal control processes, including policies mandating procedural requirements and standards, are operating effectively.
Overview of how the Board discharges its duties:
The strategy and governance of the Company is set at Board meetings held regularly throughout the year. The strategy agreed forms the basis of the budget for the forthcoming year as well as informing the capital and investment plans for the period.
The financial performance of the Company is reviewed by provision of management account information. These management accounts are prepared monthly and provided to the Directors on a timely basis by the Finance Director along with detailed commentary.
The Board is mindful of the risks the Company faces when making its strategic decisions. As well as the general risks facing, every company in terms of the general economy, the Directors have agreed that the main risks facing the Company are:
• Current macro-economic factors such as rapidly rising inflation.
• Reliability of the supply of goods/services especially vehicles, plant & equipment and fuel.
• Lack of succession in key managerial staff further hindered by a shortage of available workers generally.
• The ability of larger companies to compete aggressively on price for new business.
• The costs of compliance in highly regulated industries.
The Company’s strategy has been to limit these risks as far as practicable.
(b) The interests of the Company’s employees
Employees are central to the long-term success of a Company, as such, a Board should consider their interests, and, to assist in doing so, have means of engaging with and understanding their views.
Page 3
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FGS Agri Limited
Strategic report (continued)
For the year ended 30 April 2024
Overview of how the Board performed its duties:
The Directors are fortunate that they have regular contact with all employees, not just Managers across the Group. Directors regularly attend operational sites and are available to discuss issues with staff members. Various media platforms are used to keep employees informed with any Company news and other relevant guidance. We value the feedback from our employees, and regular contact takes place where relevant.
Previously, the Company have undertaken employee surveys, and this is a method of engagement that will be employed again in the future. Managers have regular one-to-one meetings with their staff to facilitate such connectivity with staff. The Directors have a responsibility of overseeing how employees that fall short of our required standards. At least one member of a senior management team will be involved in any disciplinary procedures.
There is a continuous review program for its Employee Handbooks especially the sections on ethics, standards and grievances. These policies are reviewed annually to ensure they are up to date with legislative change, reflective of our business and effective.
(c) The need to foster the Company’s business relationships with suppliers, customers and others.
Fostering business relationships with key stakeholders, such as customers and suppliers, is important to a Company’s success. A Board should have visibility of these relationships so that it is able to take stakeholder considerations into account when making decisions.
Overview of how the Board performed its duties:
Suppliers
The Company has regular meetings with key suppliers such as our main vehicle and plant & machinery dealerships as part of ongoing repairs & maintenance arrangements in place with these companies. We also have regular contact with many of our smaller suppliers and can be flexible with our invoice payment policy. Wherever possible, the Company likes to engage with local suppliers.
Customers
The Company has contractual obligations with its main local authority customers to report and meet with the appointed local authority representatives on a minimum monthly basis. This regular reporting and meeting arrangements also apply to what the Company classifies as its key corporate and off-take customers. Other customer complaints are reviewed by at least one Director and responded to as quickly as possible. Feedback is used to improve our service to all customers.
(d) The impact of the Company’s operations on the community and the environment
In their decision-making, Directors need to have regard to the impact of a Company’s operations on the community and environment.
Overview of how the Board performed its duties:
All the Companies have an important social responsibility to both their local community and the wider environment. The Directors take this responsibility seriously and are mindful of it when making decisions.
Furthermore, the Company has a contractual commitment to assist its local authority customers in meeting their obligations under the Public Services (Social Value) Act 2012 and it is fully committed to delivering social value under these contracts and more widely to the communities in which many of its staff and customers live.
Page 4
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FGS Agri Limited
Strategic report (continued)
For the year ended 30 April 2024
The Company’s activities have an obvious impact on the environment, and we are committed to operating our processes strictly in accordance with legislation and environmental permits along with all other consents issued pursuant to regulations that control the way we undertake our business. The Company is committed to investing in new cleaner technology and is looking to introduce fully electric mobile plant at some of its operating sites during the course of the coming financial year.
(e) The desirability of the Company maintaining a reputation for high standards of business contact
Culture, values and standards underpin how a Company creates and sustains value over the longer term and are key elements of how it maintains a reputation for high standards of business conduct. They also guide and assist in decision making and thereby help promote a company’s success, recognising, amongst other things, the likely consequences of any decision in the long term and wider stakeholder considerations. The standards set by a Board mandate certain requirements and behaviours with regards to the activities of its directors, employees and others associated with it.
Overview of how the Board discharged its duties
The Board helps to shape the values and culture of the group through our engagement with all stakeholders, including employees, customers and regulators. Key to the Company’s identify is that it is family-owned. The long-term success of the Company is derived from its relationships with its employees and its customers.
(f) The need to act fairly between members of the Company
A Board should communicate effectively with its shareholders and understand their views, and also act fairly as between different members.
Overview of how the Board discharged its duties
The Company presides over a group of individual companies and remains ultimately family owned. Members of the family are Directors of the Company and attend Board and management meetings on a regular basis. They take an active role in the day-to-day running of all the companies.
Accordingly, the Board of Directors of the Company consider, both individually and together, that they have acted in the way they consider would be for the benefits of its members as a whole, in the decisions they have made in the year ended 30th April 2024.
This report was approved by the board and signed on its behalf.
Page 5
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FGS Agri Limited
Directors' report
For the year ended 30 April 2024
The directors present their report and the financial statements for the year ended 30 April 2024.
Directors' responsibilities statement
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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 judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙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 2006. They 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.
The profit for the year, after taxation, amounted to £607,449 (2023 - £1,050,089).
Disclosures relating to energy have been included in the consolidated financial statements of Heathcote Holdings Limited.
The directors who served during the year were:
Please refer to the Strategic report.
Engagement with suppliers, customers and others
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The Directors engagement with employees, suppliers, customers and others is detailed in the strategic report on pages 2 to 5.
Page 6
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FGS Agri Limited
Directors' report (continued)
For the year ended 30 April 2024
Greenhouse gas emissions, energy consumption and energy efficiency action
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Disclosures relating to energy have been included in the consolidated financial statements of Heathcote Holdings Limited.
Disclosure of information to auditors
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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
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On 27 September 2024, the group acquired 50% of the shares of Direct Enviro Services Limited for £450,000 and acquired two additional properties for £1.36m.
The auditors, Kreston Reeves LLP, will 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.
Page 7
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FGS Agri Limited
Independent auditors' report to the members of FGS Agri Limited
We have audited the financial statements of FGS Agri Limited (the 'Company') for the year ended 30 April 2024, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 30 April 2024 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.
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
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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.
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.
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FGS Agri Limited
Independent auditors' report to the members of FGS Agri Limited (continued)
Opinion on other matters prescribed by the Companies Act 2006
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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
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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
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As explained more fully in the Directors' responsibilities statement set out on page 6, 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.
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FGS Agri Limited
Independent auditors' report to the members of FGS Agri Limited (continued)
Auditors' responsibilities for the audit of the financial statements
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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:
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, Statement of Recommended Practice, taxation and pension legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management override. Audit procedures performed by the engagement team:
∙Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud;
∙Assessment of identified fraud risk factors;
∙Challenging assumptions and judgments made by management in its significant accounting estimates;
∙Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business;
∙Physical inspection of tangible fixed assets susceptible to fraud or irregularity;
∙Performing analytical procedures with automated data analytics tools to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
∙Identifying and testing journal entries, in particular any manual entries made at the year end for financial
statement preparation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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FGS Agri Limited
Independent auditors' report to the members of FGS Agri Limited (continued)
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Tracey Becker (Senior statutory auditor)
for and on behalf of
Kreston Reeves LLP
Statutory Auditor
Chartered Accountants
Canterbury
31 January 2025
Page 11
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FGS Agri Limited
Statement of comprehensive income
For the year ended 30 April 2024
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Income from participating interests
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial year
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There was no other comprehensive income for 2024 (2023:£NIL).
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The notes on pages 15 to 34 form part of these financial statements.
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Page 12
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FGS Agri Limited
Registered number: 02810485
Balance sheet
As at 30 April 2024
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 34 form part of these financial statements.
Page 13
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FGS Agri Limited
Statement of changes in equity
For the year ended 30 April 2024
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Comprehensive income for the year
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Comprehensive income for the year
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Transfer to/from profit and loss account
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Page 14
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
FGS Agri Limited is a private company limited by shares and is incorporated in England and Wales with registration number 02810485. The address of the registered office is Stanford Bridge Farm, Station Road, Pluckley, Ashford, Kent, TN27 0RU.
The principal activities of the company are that of in hand farming, shared farming, whole farm contracting and management together with ground care maintenance.
2.Accounting policies
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Basis of preparation of financial statements
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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 judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the 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);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Heathcote Holdings Limited as at 30 April 2024 and these financial statements may be obtained from Stanford Bridge Farm, Station Road, Pluckley, Kent, TN27 0RU.
Page 15
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
2.Accounting policies (continued)
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:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
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 comprehensive income in the same period as the related expenditure.
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.
Page 16
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
2.Accounting policies (continued)
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.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight line and reducing balance basis.
Depreciation is provided on the following basis:
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Freehold land is not depreciated
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Tenants leasehold improvements
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Assets under construction
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Not depreciated until brought into use
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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.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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.
Page 17
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
2.Accounting policies (continued)
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Cash and cash equivalents
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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.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Balance sheet when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Page 18
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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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 Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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.
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.
Page 19
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is Pounds Sterling.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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 Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
Interest income is recognised in profit or loss using the effective interest method.
Page 20
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
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Current and deferred taxation
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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 balance sheet 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 balance sheet 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 balance sheet date.
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Revaluation of tangible fixed assets
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Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.
Investment property is carried at fair value determined annually by the Directors of the company and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.
Page 21
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following judgements have had the most significant impact on amounts recognised in the financial statements:
Lease commitments
The company has entered into a range of lease commitments in respect of property, plant and equipment. The classification of these leases as either financial or operating leases requires the directors to consider whether the terms and conditions of each lease are such that the company has acquired the risks and rewards associated with the ownership of the underlying assets.
Tangible fixed assets
The company has recognised tangible fixed assets with a carrying value of £22,896,336 at the reporting date (see note 14). These assets are stated at their cost less provision for depreciation and impairment. The company’s accounting policy sets out the approach to calculating depreciation for assets acquired. For assets such as land and buildings the company determines at acquisition reliable estimates for the useful life of the asset, its residual value and decommissioning costs. These estimates are based upon such factors as the expected use of the acquired asset and market conditions. At subsequent reporting dates the directors consider whether there are any factors such as technological advancements or changes in market conditions that indicate a need to reconsider the estimates used.
Where there are indicators that the carrying value of tangible assets may be impaired the company undertakes tests to determine the recoverable amount of assets. These tests require estimates of the fair value of assets less cost to sell and of their value in use. Wherever possible the estimate of the fair value of assets is based upon observable market prices less incremental cost for disposing of the asset. The value in use calculation is based upon a discounted cash flow model, based upon the company’s forecasts for the foreseeable future which do not include any restructuring activities that the company is not yet committed to or significant future investments that will enhance the asset’s performance. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well expected future cash flows and the growth rate used for extrapolation purposes.
Investment in subsidiaries
The company has recognised investments in subsidiaries with a carry value of £1,537,413 at the reporting date (see note 15). These assets are stated at their cost less provision for impairment.
The company considers whether these investments are impaired. Where an indication of impairment is identified the estimation of recoverable value requires the estimation of the recoverable value of the cash generating units (CGUs). This requires estimation of the future cash flows from the CGUs and also selection of appropriate discount rates in order to calculate the net present values of those cash flows.
Investment properties
The company holds investment properties with a fair value of £6,446,623 at the year end (see note 16). In order to determine the fair value of investment property, the company has performed valuations based on internal experience in the location and nature of the property being valued. They have used a valuation technique is based on comparable market data. The determined fair value of the investment property is most sensitive to fluctuations in rental yields or fluctuations in the property market.
Page 22
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
The whole of the turnover is attributable to the principal activity of the company.
Analysis of turnover by country of destination:
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The operating profit is stated after charging:
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Research & development charged as an expense
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Other operating lease rentals
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During the year, the Company obtained the following services from the Company's auditors:
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Fees payable to the Company's auditors for the audit of the Company's financial statements
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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.
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Page 23
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Directors, management and staff
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 2 directors (2023 - 2) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £215,023 (2023 - £183,883).
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The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £45,638 (2023 - £5,409).
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Interest receivable from group companies
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Other interest receivable
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Page 24
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
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Interest payable and similar expenses
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Loans from group undertakings
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Finance leases and hire purchase contracts
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2023 - higher than) the standard rate of corporation tax in the UK of 25.00% (2023 - 19.49%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25.00% (2023 - 19.49%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Other differences leading to an increase (decrease) in the tax charge
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Deferred tax not recognised
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Total tax charge for the year
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Page 25
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
12.Taxation (continued)
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
Page 26
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
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Long-term leasehold property
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Assets under construction
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Transfers between classes
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Page 27
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
14.Tangible fixed assets (continued)
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Transfers between classes
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Page 28
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
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Investments in subsidiary companies
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The following were subsidiary undertakings of the Company:
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The registered office address for all subsidiaries is Stanford Bridge Farm, Pluckley, Ashford, TN27 0RU.
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Page 29
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
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Freehold investment property
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Transfers between classes
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Annual revaluation surplus/(deficit):
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The 2024 valuations were made on a fair value basis, by the directors and informed by expertise within the company regarding real estate.
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Finished goods and goods for resale
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Page 30
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
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Due after more than one year
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Amounts owed by group undertakings
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Amounts owed to companies under common
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Page 31
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Short term timing differences
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Losses and other deductions
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Allotted, called up and fully paid
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4,700 (2023 - 4,700) Ordinary shares of £1.00 each
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Page 32
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
Other reserve
This reserve comprises amounts transferred from the profit and loss reserve that are non-distributable.
Profit and loss account
This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the company’s shareholders.
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At 30 April 2024 the Company had capital commitments as follows:
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Contracted for but not provided in these financial statements
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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 £403,457 (2023 - £327,591). Contributions totaling £62,731 (2023 - £66,958) were payable to the fund at the balance sheet date and are included in creditors.
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Commitments under operating leases
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At 30 April 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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29.Other financial commitments
On 21 December 2021, an unlimited composite company guarantee was given by FGS Agri Limited and other companies within the Heathcote Holdings group to HSBC Plc, by way of a fixed and floating charge over the assets of the group.
At 30 April 2024, the total exposure amounted to £21,975,000 (2023: £7,875,000).
Page 33
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FGS Agri Limited
Notes to the financial statements
For the year ended 30 April 2024
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Transactions with directors
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During the year M Heathcote, a director of the company, purchased a property from the company for £227,600, the company also made payments on his behalf totaling £31,721 and £86,801 was repaid. As at 30 April 2024 was owed £172,521 by the director and is included within other debtors. The loan is interest free and is repayable on demand.
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Related party transactions
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The company is exempt from disclosing related party transactions with other companies that are wholly owned within the group. The following are related party transactions outside of the group:
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Sales to entities controlled by key management personnel
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Purchases from entities controlled by key management personnel
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Amounts due from entities of which the entity has control, joint control or significant interest
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Amounts due from entities controlled by key management personnel
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Amounts owed to entities of which the entity has control, joint control or significant interest.
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Amounts due from directors and close family
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Amounts due to directors and close family
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Interest received from entities controlled by key management personnel
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Share of profits entities of which the entity has control, joint control or significant interest
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Post balance sheet events
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On 27 September 2024, the group acquired 50% of the shares of Direct Enviro Services Limited for £450,000 and acquired two additional properties for £1.36m.
Heathcote Holdings Limited is the ultimate parent company of FGS Agri Limited due to its 100% shareholding. The ultimate controlling party remained as TL Heathcote by virtue of his majority shareholding.
FGS Agri Limited are included in the consolidated financial statements of Heathcote Holdings Limited made up to 30 April 2024 which are available from Stanford Bridge Farm, Station Road, Pluckley, Ashford, Kent, TN27 0RU.
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