Company registration number SC410691
MCKENZIE CRAIGLANDS LTD.
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
PAGES FOR FILING WITH REGISTRAR
MCKENZIE CRAIGLANDS LTD.
CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
Page
Balance sheet
1 - 2
Notes to the financial statements
3 - 9
MCKENZIE CRAIGLANDS LTD.
BALANCE SHEET
AS AT
28 FEBRUARY 2023
28 February 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
3
767,176
793,493
Herd
4
228,033
228,858
995,209
1,022,351
Current assets
Stocks
129,550
156,180
Debtors
5
48,149
89,314
177,699
245,494
Creditors: amounts falling due within one year
6
(996,122)
(1,089,600)
Net current liabilities
(818,423)
(844,106)
Total assets less current liabilities
176,786
178,245
Creditors: amounts falling due after more than one year
7
(45,594)
(71,053)
Provisions for liabilities
9
(19,806)
(20,053)
Net assets
111,386
87,139
Capital and reserves
Allotted, called up and fully paid share capital
1,000
1,000
Profit and loss reserves
110,386
86,139
Total equity
111,386
87,139
MCKENZIE CRAIGLANDS LTD.
BALANCE SHEET (CONTINUED)
AS AT
28 FEBRUARY 2023
28 February 2023
- 2 -
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 28 February 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 29 September 2023 and are signed on its behalf by:
Mr R W McKenzie
Director
Company Registration No. SC410691
MCKENZIE CRAIGLANDS LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 3 -
1
Accounting policies
Company information
McKenzie Craiglands Ltd. is a private company limited by shares incorporated in Scotland. The registered office is Redwood, 19 Culduthel Road, Inverness, IV2 4AA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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.
1.2
Going concern
At the balance sheet date the company had net current liabilities amounting to £818,423 (2022 - £844,106). However, the directors have confirmed that they do not intend to seek repayment of the loan of £351,893 (2022 - £407,688) made to the company by John McKenzie & Co., a business in which both directors are partners, and that they will ensure that adequate funds will be made available to meet third-party liabilities as they fall due. On this basis, it is considered appropriate to prepare the financial statements on a going concern basis.
1.3
Turnover
Turnover represents net invoiced sales of goods and services rendered arising from the business of farming, excluding value added tax, during the year, along with income from government support schemes.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the amount of revenue can be reliably measured. Revenue from government support schemes is recognised when received.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Farm
not depreciated
Plant and machinery
25% on reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
MCKENZIE CRAIGLANDS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies (Continued)
- 4 -
1.5
Biological assets
Biological assets are recognised only when three recognition criteria have been fulfilled:
the entity has control over the asset as a result of past events;
it is probable that future economic benefits associated with the asset will flow to the entity; and
the fair value or cost of the asset can be measured reliably.
The breeding animals of the company are accounted for under the herd basis. The herd is considered to be a single fixed asset. It is valued at the initial purchase price, and is not revalued each financial year. Any increase in the herd size is treated as an addition to the herd asset. These additions to the herd are incorporated at the cost value at that point in time. The herd stock is not depreciated, and is accounted for in accordance with HM Revenue and Customs herd basis rules.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Livestock is valued by the directors in line with HM Revenue & Customs guidance and industry averages. Crop values comprise direct costs plus attributable overheads. Other stocks are stated at the lower of cost and net realisable value, making due allowance for obsolete or slow moving items.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
MCKENZIE CRAIGLANDS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies (Continued)
- 5 -
1.9
Financial instruments
The company 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 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 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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.10
Equity instruments
Equity instruments issued by the company 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 company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
MCKENZIE CRAIGLANDS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies (Continued)
- 6 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has 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.
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets in the balance sheet. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
MCKENZIE CRAIGLANDS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 7 -
3
Tangible fixed assets
Farm
Plant and machinery
Total
£
£
£
Cost
At 1 March 2022
687,951
323,846
1,011,797
Additions
583
583
Disposals
(1,150)
(1,150)
At 28 February 2023
687,951
323,279
1,011,230
Depreciation and impairment
At 1 March 2022
218,304
218,304
Depreciation charged in the year
26,556
26,556
Eliminated in respect of disposals
(806)
(806)
At 28 February 2023
244,054
244,054
Carrying amount
At 28 February 2023
687,951
79,225
767,176
At 28 February 2022
687,951
105,542
793,493
4
Herd
Cattle
Sheep
Total
£
£
£
Cost
At 1 March 2022
189,510
39,348
228,858
Disposals
(825)
(825)
At 28 February 2023
189,510
38,523
228,033
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,856
38,709
Other debtors
45,293
50,605
48,149
89,314
MCKENZIE CRAIGLANDS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 8 -
6
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
610,642
616,246
Trade creditors
10,348
28,916
Taxation and social security
10,429
6,806
Other creditors
364,703
437,632
996,122
1,089,600
7
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
8
45,594
62,754
Obligations under hire purchase contracts
10
8,299
45,594
71,053
8
Loans and overdrafts
2023
2022
£
£
Bank loans
67,723
109,054
Bank overdrafts
588,513
569,946
656,236
679,000
Payable within one year
610,642
616,246
Payable after one year
45,594
62,754
The company has obtained a Coronavirus Bounceback loan of £50,000. The loan is secured by way of government guarantee, attracts interest at a rate of 2.5% per annum and is repayable over five years, with an initial 12 months repayment free.
Bank loans and overdrafts are secured by a bond and floating charge and by a standard security over the assets of the company.
9
Provisions for liabilities
2023
2022
£
£
Deferred tax liabilities
19,806
20,053
MCKENZIE CRAIGLANDS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 9 -
10
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases and hire purchase obligations:
£
£
Within one year
2,438
25,777
In two to five years
8,299
2,438
34,076
Hire purchase obligations are secured over the assets to which they relate.
11
Related party disclosures
Included in other creditors is a loan of £351,893 (2022 - £407,688) to J McKenzie & Co, a business in which both directors are partners. The loan is unsecured, interest free and has no fixed terms of repayment.
The directors and shareholders of the company have granted a standard security over Wester Craiglands Farm in respect of the bank loans and overdrafts of the company.