Limited Liability Partnership Registration No. SO306319 (Scotland)
Annandale and Lochwood Estates LLP
Annual report and unaudited financial statements
for the year ended 31 March 2023
Pages for filing with the registrar
Annandale and Lochwood Estates LLP
Contents
Page
Statement of financial position
1 - 2
Reconciliation of members' interests
3
Notes to the financial statements
4 - 15
Annandale and Lochwood Estates LLP
Statement of financial position
As at 31 March 2023
1
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
5
6,025
11,175
Tangible assets
6
25,020,075
25,104,357
Investment properties
7
13,518,828
13,518,828
38,544,928
38,634,360
Current assets
Stocks
249,899
238,225
Debtors
9
3,385,732
3,929,133
Cash at bank and in hand
784,932
697,799
4,420,563
4,865,157
Creditors: amounts falling due within one year
8
(464,084)
(273,953)
Net current assets
3,956,479
4,591,204
Total assets less current liabilities
42,501,407
43,225,564
Creditors: amounts falling due after more than one year
10
(4,700,000)
(5,241,397)
Net assets attributable to members
37,801,407
37,984,167
Represented by:
Members' other interests
Members' capital classified as equity
37,212,828
37,212,828
Other reserves classified as equity
588,579
771,339
37,801,407
37,984,167
Total members' interests
Members' other interests
37,801,407
37,984,167
Annandale and Lochwood Estates LLP
Statement of financial position (continued)
As at 31 March 2023
2

The members of the limited liability partnership have elected not to include a copy of the income statement within the financial statements.

For the financial year ended 31 March 2023 the limited liability partnership was entitled to exemption from audit under section 477 of the Companies Act 2006 (as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) relating to small limited liability partnerships.

The members acknowledge their responsibilities for complying with the requirements of the Act (as applied to limited liability partnerships) with respect to accounting records and the preparation of accounts.

These financial statements have been prepared and delivered in accordance with the provisions applicable to limited liability partnerships subject to the small limited liability partnerships regime.

The financial statements were approved by the members and authorised for issue on 3 November 2023 and are signed on their behalf by:
03 November 2023
Lord Johnstone
The Rt Hon the Earl of Annandale and Hartfell
Designated member
Designated Member
Limited Liability Partnership Registration No. SO306319
Annandale and Lochwood Estates LLP
Reconciliation of members' interests
For the year ended 31 March 2023
3
Current financial year
Equity
Total
Members' other interests
Members'
interests
Members' capital (classified as equity)
Other reserves
Total
2023
£
£
£
Members' interests at 1 April 2022
37,212,828
771,339
37,984,167
Profit for the financial year available for discretionary division among members
-
588,579
588,579
Members' interests after profit for the year
37,212,828
1,359,918
38,572,746
Other divisions of profits
-
(771,339)
(771,339)
Members' interests at 31 March 2023
37,212,828
588,579
37,801,407
Prior financial year
Equity
Total
Members' other interests
Members'
interests
Members' capital (classified as equity)
Other reserves
Total
2022
£
£
£
Members' interests at 1 April 2021
36,716,578
792,942
37,509,520
Profit for the financial year available for discretionary division among members
-
771,339
771,339
Members' interests after profit for the year
36,716,578
1,564,281
38,280,859
Other divisions of profits
-
(792,942)
(792,942)
Introduced by members
496,250
-
496,250
Members' interests at 31 March 2022
37,212,828
771,339
37,984,167
Annandale and Lochwood Estates LLP
Notes to the financial statements
For the year ended 31 March 2023
4
1
Accounting policies
Limited liability partnership information

Annandale and Lochwood Estates LLP is a limited liability partnership incorporated in Scotland. The registered office is Annandale Estate Office, St Ann's, Lockerbie, Dumfriesshire, DG11 1HQ.

 

The limited liability partnership's principal activities are disclosed in the Members' Report.

1.1
Accounting convention

These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together 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 limited liability partnership. 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
Turnover

Turnover represents all income from the letting of investment property, income from farming activities including BPS payments, income from the generation of electricity at the hydro plants and income from the sale of timber. The income is recognised at the point when the limited liability partnership has a contractual obligation to supply the good or services and the income is no longer refundable.

 

The income is measured at the fair value of the consideration received net of VAT and discounts.

1.3
Members' participating interests

Members' participation rights are the rights of a member against the limited liability partnership that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).

 

Members' participation rights in the earnings or assets of the limited liability partnership are analysed between those that are, from the limited liability partnership's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the limited liability partnership has an unconditional right to refuse payment to members, in which case they are classified as equity.

 

All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.

 

Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the limited liability partnership has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.

Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
1
Accounting policies (continued)
5

Once an unavoidable obligation has been created in favour of members through allocation of profits or other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts due to members’ to the extent they exceed debts due from a specific member.

1.4
Intangible fixed assets other than goodwill

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

 

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

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

Basic Payment Scheme
Written off monthly to 31 December 2024
Website
25% straight line
1.5
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:

Heritable property
Nil - 5% straight line
Woodlands
Nil
Hydro scheme
5% straight line
Fixtures and fittings
5% - 10% straight line
Motor vehicles
25% straight line

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

1.6
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss. The members agree the valuation of the property at the end of each year with full external valuations being completed when they no longer believe that the value shown is the true value of the assets.

1.7
Impairment of fixed assets

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

Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
1
Accounting policies (continued)
6

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

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.

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to net realisable value.

The company measures biological assets at cost less accumulated depreciation and accumulated impairment losses.

 

In respect of agricultural produce harvested from a biological asset, this is measured at the point of harvest at either;

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

1.9
Cash at bank and in hand

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.

Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
1
Accounting policies (continued)
7
1.10
Financial instruments

The limited liability partnership 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 limited liability partnership's statement of financial position when the limited liability partnership becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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

Other financial assets

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

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
1
Accounting policies (continued)
8
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.

Other financial liabilities

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

 

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

Derecognition of financial liabilities

Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.

1.11
Equity instruments

Equity instruments issued by the limited liability partnership are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the limited liability partnership.

1.12
Employee benefits

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

 

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

 

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

Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
1
Accounting policies (continued)
9
1.13
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 at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position 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.

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

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
10
2
Critical accounting judgements and key sources of estimation uncertainty

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

 

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

3
Employees

The average number of persons (excluding members) employed by the partnership during the year was:

2023
2022
Number
Number
Total
8
7
Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
11
4
Related party transactions
2023
2022
£
£
Transactions entered into with related parties can be summarised as follows:
Annandale Estates:
Loan advanced by the limited liability partnership
5,000
5,576
LLP surplus allocated against loan
(16,510)
(19,031)
Interest payable to the limited liability partnership
6,652
4,478
Lochwood Estate:
Loan advanced by the limited liability partnership
10,628
85,173
LLP surplus allocated against loan
(119,428)
(138,765)
Interest payable to the limited liability partnership
81,134
45,215
Raehills Farms Limited:
Loan repaid by the company
(586,817)
-
LLP surplus allocated against loan
(137,549)
(57,092)
Interest payable to the limited liability partnership
40,057
40,903
Raehills Trust:
Interest payable to the limited liability partnership
-
1,778
Loan advanced by the limited liability partnership
215,040
365,000
LLP surplus allocated against loan
(497,853)
(578,055)
The balances due from related parties within one year at the year end were as follows:
Lochwood Estate
(181,688)
(181,688)
The balances due from related parties after more than one year at the year end were as follows:
Annandale Estates
(124,877)
(129,735)
Lochwood Estate
(1,835,260)
(1,862,926)
Raehills Farms Limited
(479,492)
(1,163,801)
Raehills Trust
60,962
(221,851)
Annandale Estates is a business owned by The Earl of Annandale and Hartfell.  Interest on the loan is charged at 3.5% above the Bank of England base rate.
Lochwood Estates is a business owned by Lord Johnstone.  The interest paid relates to the Euro loan due in more than one year and is charged at 3.5% above the Bank of England base rate.
Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
4
Related party transactions (continued)
12
Raehills Farms Limited is a company wholly owned by Lord Johnstone.  Interest on the loan is charged at 3.5% above the Bank of England base rate.
Raehills Renewables Limited is a company wholly owned by Lord Johnstone. The interest on the loan is charged at 3.5% above the Bank of England base rate.  On 30 November 2020 the assets and liabilities of Raehills Renewables Limited were transferred to Raehills Farms Limited in a share for share exchange.  Raehills Farms Limited took on the obligation to the LLP from this date.
Raehills Trust is a trust of which The Rt Hon the Earl of Annandale and Hartfell, a member of the limited liability partnership, is a trustee and Lord Johnstone is a beneficiary.  The interest paid by the trust relates to the loan due in more than one year and is charged partly at 2.60% and partly at 1.85% as a reflection of rates charged on the bank loans which were paid over to the trust.
5
Intangible fixed assets
Basic Payment Scheme
Website
Total
£
£
£
Cost
At 1 April 2022 and 31 March 2023
178,063
2,000
180,063
Amortisation and impairment
At 1 April 2022
168,763
125
168,888
Amortisation charged for the year
4,650
500
5,150
At 31 March 2023
173,413
625
174,038
Carrying amount
At 31 March 2023
4,650
1,375
6,025
At 31 March 2022
9,300
1,875
11,175

The intangible assets relate to Basic Payment Scheme units which were awarded to a member in the limited liability partnership. In the prior year the units were transferred into the partnership at full market value in exchange for a capital share in the limited liability partnership of an equivalent value.

 

Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
13
6
Tangible fixed assets
Heritable property
Woodlands
Hydro scheme
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2022
12,472,516
10,574,000
1,240,616
1,126,441
154,085
25,567,658
Additions
-
-
-
86,105
15,995
102,100
Disposals
(2,000)
-
-
-
(5,995)
(7,995)
At 31 March 2023
12,470,516
10,574,000
1,240,616
1,212,546
164,085
25,661,763
Depreciation and impairment
At 1 April 2022
53,936
-
227,447
133,320
48,598
463,301
Depreciation charged in the year
25,851
-
62,031
68,881
24,321
181,084
Eliminated in respect of disposals
-
-
-
-
(2,697)
(2,697)
At 31 March 2023
79,787
-
289,478
202,201
70,222
641,688
Carrying amount
At 31 March 2023
12,390,729
10,574,000
951,138
1,010,345
93,863
25,020,075
At 31 March 2022
12,418,580
10,574,000
1,013,169
993,121
105,487
25,104,357
Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
14
7
Investment property
2023
£
Fair value
At 1 April 2022 and 31 March 2023
13,518,828

Investment property comprises let residential property, let farms and other let commercial property. The fair value of the investment property has been arrived at on the basis of a valuation carried out in February 2021 by Galbraith, chartered surveyors, Scottish Woodlands and Bidwells none of whom are connected with the limited liability partnership. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. The members of the partnership believe that this valuation still represents the fair value of the investment property as at 31 March 2023.

8
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans
-
41,818
Trade creditors
202,938
139,725
Taxation and social security
52,057
-
Other creditors
209,089
92,410
464,084
273,953
9
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
170,955
55,179
Other debtors
3,214,777
3,873,954
3,385,732
3,929,133
10
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
4,700,000
5,213,738
Other creditors
-
27,659
4,700,000
5,241,397

On 13 July 2018, the limited liability partnership granted a floating charge in favour of Barclays Security Trustee Limited, secured over all property and undertakings including uncalled capital.

Annandale and Lochwood Estates LLP
Notes to the financial statements (continued)
For the year ended 31 March 2023
15
11
Loans and other debts due to members

In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.

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