EILDON LIMITED
No. SC202197
DIRECTORS' REPORT
AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
EILDON LIMITED
COMPANY INFORMATION
Directors
Don MacIver
Eileen MacIver
Donald MacIver
Corrina Cooper
Secretary
Don MacIver
Company number
SC202197
Registered office
Eildon House
39 High Street
Inverness
IV1 1HT
Business address
Albion House
28 Ardconnel Terrace
Inverness
IV2 3AE
Auditor
Hall Morrice LLP
6 & 7 Queens Terrace
Aberdeen
AB10 1XL
Bankers
Virgin Money
15 Academy Street
Inverness
IV1 1JN
Bank of Scotland
2-6 Eastgate
Inverness
IV2 3NA
Solicitors
Brodies LLP
Solicitors
31-33 Union Grove
Aberdeen
AB10 6SD
EILDON LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 23
EILDON LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 September 2023.
Principal activities
The principal activity of the company continued to be the provision of care services.
Fair review of the business
During the year, the company generated turnover of £4,712,620 (2022 - £4,851,651). This is a decrease of 2.9% on the previous year (2022 - 11.2% increase on comparable pro-rata 12 month period). Operating profit, which is £1,193,584 (2022 - £1,179,120) has increased by 1.2% (2022 - decreased by 16.2%). The operating profit margin is 25% (2022 - 24%). Profit after tax was £704,998 (2022 - £930,704).
Employee staff numbers remain consistent with previous years and hourly wages have increased which is essential for retaining staff, which in turn is vital for the retention of care contracts. Employment costs for the year are £3,196,084 (2022 - £3,206,528) which accounts for 88.9% (2022 - 87.7%) of the total expenses.
The balance sheet has net assets of £9.3m (2022 - £9.1m).
The company's geographical areas of focus remain in the Highlands and Aberdeenshire and the company will continue to tender for additional care contracts using its long running record and well trained staff as key drivers to winning new contracts.
Principal risks and uncertainties
A key risk of the company is that it fails to maintain a highly trained workforce to meet contract requirements. The company continues to employ and train staff to the required levels to provide the appropriate level of care services. This investment in staff is also key to being able to grow the business through additional care contracts from Local Governments.
The directors are also aware of the possibility that Local or National Government policies regarding care for individuals can change. The directors believe that the level of cash reserves the company has means the company can react quickly to changes in Government Care policies.
Post reporting date events
After the closure of the 2023 financial year, there were no events that could have significant effects on the financial statements.
Development and performance
The company will continue investing in staff through competitive pay rates, training and continuing development with a view to retaining staff and managing the turnover of staff.
We strongly believe that the demand of our services will be required and will increase in the forthcoming years. Therefore, we will continue to identify and recruit key personnel to enhance our capabilities and assist in our growth.
EILDON LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
Key performance indicators
Financial Instruments
The main risks arising from the company’s financial instruments are liquidity risk and interest rate risk. The directors review and agree policies for managing each of these risks. The policies have remained unchanged from the prior year.
Liquidity Risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest Rate Risk
The company finance their operations primarily through bank loans. The company monitors its exposure to interest fluctuations on its borrowings to ensure the risk is minimised. The bank loans are subject to the bank base rate which can fluctuate. Interest rates are not seen as a material risk.
Don MacIver
Director
2 September 2024
EILDON LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
The directors present their report and audited financial statements for the year ended 30 September 2023.
Results and dividends
The results for the year are set out on Page 7.
Ordinary dividends were paid amounting to £417,549 (2022 - £507,630). The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Don MacIver
Eileen MacIver
Donald MacIver
Corrina Cooper
Auditor
The auditor, Hall Morrice LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the Strategic report, 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Don MacIver
Director
2 September 2024
EILDON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EILDON LIMITED
- 4 -
Opinion
We have audited the financial statements of Eildon Limited (the 'company') for the year ended 30 September 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 September 2023 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 Auditor's 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 UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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 Strategic report and the Directors' report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Strategic report and the Directors' report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
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.
EILDON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EILDON LIMITED
- 5 -
Matters on which we are required to report by exception
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 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
As explained more fully in the directors' responsibilities statement, as set out in the Directors' report, 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances on non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing the risk of material misstatement due to non-compliance with laws and regulations we have:
Ensured that the engagement team had the appropriate competence, capabilities and skills to identify or recognise non-compliance with laws and regulations;
Identified the laws and regulations applicable to the entity through discussions with directors and management and through our own knowledge of the sector;
Focused on the specific laws and regulations we consider may have a direct effect on the financial statements, including FRS 102 and the Companies Act 2006 and tax compliance regulations;
Focused on the specific laws and regulations we consider may have an indirect effect on the financial statements that are central to the entity’s ability to trade include those relating to the Regulation of Care (Scotland) Act 2001;
Reviewed the financial statement disclosures and tested to supporting documentation to assess compliance with applicable laws and regulations;
Made enquiries of management and inspected correspondence with Care Inspectorate and legal correspondence; and
Ensured the engagement team remained alert to instances of non-compliance throughout the audit.
EILDON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EILDON LIMITED
- 6 -
In identifying and assessing the risk of material misstatement due to irregularities, including fraud and how it may occur, and the potential for management bias and the override of controls we have:
Obtained an understanding of the entity’s operations, including the nature of its revenue sources and of its objectives and strategies, to understand the classes of transactions, account balances, expected financial disclosures and business risks that may result in risk of material misstatement;
Obtained an understanding of the internal controls in place to mitigate risks of irregularities, including fraud;
Vouched balances and reconciling items in key control account reconciliations to supporting documentation;
Carried out detailed testing, on a sample basis, to verify the completeness, occurrence, existence and accuracy of transactions and balances;
Carried out detailed testing to verify the completeness, validity, existence and accuracy of income including cut-off testing and ensuring income recognition is in line with stated accounting policies;
Made enquiries of management as to where they consider there was a susceptibility to fraud, and their knowledge of any actual, suspected or alleged fraud;
Tested journal entries to identify any unusual transactions;
Performed analytical procedures to identify any significant or unusual transactions;
Investigated the business rationale behind any significant or unusual transactions; and
Evaluated the appropriateness of accounting policies and the reasonableness of accounting estimates.
We did not identify any matters relating to non-compliance with laws and regulations, or relating to fraud.
Because of the inherent limitations of an audit, there is an unavoidable risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk of not detecting a material misstatement due to fraud is inherently more difficult than detecting those that result from error as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. In addition, the further removed any non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Derek Petrie MA (Hons) CA
Senior Statutory Auditor
For and on behalf of Hall Morrice LLP
Statutory Auditor
Aberdeen
2 September 2024
EILDON LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
4,712,620
4,851,651
Cost of sales
(37,704)
(22,186)
Gross profit
4,674,916
4,829,465
Administrative expenses
(3,594,318)
(3,723,802)
Other operating income
31,400
73,457
Operating profit
4
1,111,998
1,179,120
Interest payable and similar expenses
7
(52,012)
(15,549)
Fair value loss on investment properties
8
(252,735)
-
Profit before taxation
807,251
1,163,571
Tax on profit
9
(102,253)
(232,867)
Profit for the financial year
704,998
930,704
The Statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
EILDON LIMITED
BALANCE SHEET
AS AT 30 SEPTEMBER 2023
30 September 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
647,373
748,668
Investment properties
13
445,000
697,735
1,092,373
1,446,403
Current assets
Debtors
14
8,665,346
9,001,746
Cash at bank and in hand
1,023,951
398,631
9,689,297
9,400,377
Creditors: amounts falling due within one year
15
(1,033,152)
(1,218,487)
Net current assets
8,656,145
8,181,890
Total assets less current liabilities
9,748,518
9,628,293
Creditors: amounts falling due after more than one year
16
(408,372)
(575,596)
Net assets
9,340,146
9,052,697
Capital and reserves
Called up share capital
19
100
100
Profit and loss reserves
20
9,340,046
9,052,597
Total equity
9,340,146
9,052,697
The financial statements were approved by the board of directors and authorised for issue on 2 September 2024 and are signed on its behalf by:
Don MacIver
Director
Company Registration No. SC202197
EILDON LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2021
100
8,629,523
8,629,623
Period ended 30 September 2022:
Profit and total comprehensive income for the period
-
930,704
930,704
Dividends
10
-
(507,630)
(507,630)
Balance at 30 September 2022
100
9,052,597
9,052,697
Year ended 30 September 2023:
Profit and total comprehensive income for the year
-
704,998
704,998
Dividends
10
-
(417,549)
(417,549)
Balance at 30 September 2023
100
9,340,046
9,340,146
EILDON LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
1,775,033
1,694,973
Interest paid
(52,012)
(15,549)
Income taxes paid
(275,969)
(756,265)
Net cash inflow from operating activities
1,447,052
923,159
Investing activities
Receipts arising from loans made
(235,984)
(199,223)
Net cash used in investing activities
(235,984)
(199,223)
Financing activities
Repayment of bank loans
(168,199)
(102,507)
Dividends paid
(417,549)
(507,630)
Net cash used in financing activities
(585,748)
(610,137)
Net increase in cash and cash equivalents
625,320
113,799
Cash and cash equivalents at beginning of year
398,631
284,832
Cash and cash equivalents at end of year
1,023,951
398,631
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
1
Accounting policies
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
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:
Freehold properties
2% on cost
Plant and equipment
15% reducing balance
Fixtures and fittings
15% reducing balance
Motor vehicles
33.3% 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 credited or charged to profit or loss.
1.5
Investment properties
Investment properties, which are properties held to earn rentals and/or for capital appreciation, are initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently they are measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
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.
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies (continued)
- 12 -
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
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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.
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.
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies (continued)
- 13 -
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 company 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 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies (continued)
- 14 -
1.9
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.
1.10
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.
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.
1.11
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
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 company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies (continued)
- 15 -
1.14
Leases
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.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Useful economic life of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 10 for the carrying amount of each asset and note 1.4 for the useful economic lives for each class of asset.
Revaluation of investment properties
The company carries its investment properties at fair value, with changes in fair value being recognised in profit or loss. The fair value at each reporting date is normally determined by the directors at estimated market value. Annual professional valuations are not obtained due to the cost involved and the fact that the directors have no intention to sell the investment properties in the medium to long term. Periodic professional valuations are obtained when there is considered to have been a material change in the economic environment. See note 11 for the carrying amount of the investment properties.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Fees
4,424,718
4,299,138
Recharged expenses
287,902
552,513
4,712,620
4,851,651
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
3
Turnover and other revenue (continued)
- 16 -
2023
2022
£
£
Other revenue
Rent receivable
31,400
42,600
Grants received
-
30,657
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(30,657)
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
12,000
Depreciation of owned tangible fixed assets
19,709
49,118
Impairment of owned tangible fixed assets
81,586
Loss on disposal of tangible fixed assets
-
73,861
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Direct
134
134
Admin
6
6
Total
140
140
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,141,179
3,154,285
Pension costs
54,905
52,243
3,196,084
3,206,528
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 17 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
45,906
22,791
Company pension contributions to defined contribution schemes
525
283
Dividends
163,000
307,885
209,431
330,959
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
44,163
15,549
Other finance costs:
Other interest
7,849
52,012
15,549
8
Fair value loss on investment properties
2023
2022
£
£
Fair value loss investment properties
252,735
-
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
254,845
244,784
Adjustments in respect of prior periods
(152,592)
Total current tax
102,253
244,784
Deferred tax
Origination and reversal of timing differences
(11,917)
Total tax charge
102,253
232,867
Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2023 (on 10 January 2023). These changes included an increase in the main rate to 25% from April 2023. Deferred taxes at the balance sheet date, in relation to UK companies, are measured using tax rates enacted as at the balance sheet date (25%).
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
9
Taxation (continued)
- 18 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
807,251
1,163,571
Expected tax charge based on the standard rate of corporation tax in the UK of 22% (2022: 19%)
177,676
221,078
Tax effect of expenses that are not deductible in determining taxable profit
73,644
589
Adjustments in respect of prior years
(152,607)
Permanent capital allowances less than depreciation
4,155
6,672
Deferred tax
55,007
4,528
Capital losses
(55,622)
Taxation charge for the year
102,253
232,867
10
Dividends
2023
2022
£
£
Final paid
417,549
507,630
11
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2023
2022
Notes
£
£
In respect of:
Property, plant and equipment
12
81,586
-
Recognised in:
Administrative expenses
81,586
-
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 19 -
12
Tangible fixed assets
Freehold properties
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 October 2022 and 30 September 2023
943,868
36,510
4,968
985,346
Depreciation and impairment
At 1 October 2022
200,724
31,828
4,126
236,678
Depreciation charged in the year
18,880
702
127
19,709
Impairment losses
81,586
81,586
At 30 September 2023
301,190
32,530
4,253
337,973
Carrying amount
At 30 September 2023
642,678
3,980
715
647,373
At 30 September 2022
743,144
4,682
842
748,668
More information on impairment movements in the year is given in note 11.
13
Investment properties
2023
£
Fair value
At 1 October 2022
697,735
Net gains or losses through fair value adjustments
(252,735)
At 30 September 2023
445,000
Investment properties comprises of three properties that are rented on a rolling contract. The fair values of the investment properties has been arrived at on the basis of a valuation carried out by the directors based on an open market values at 30 September 2023.
If investment properties were stated on an historical cost basis rather than a fair value basis, the amounts would have been included as follows:
2023
2022
£
£
Cost
811,488
811,488
Accumulated depreciation
(113,753)
(113,753)
Carrying amount
697,735
697,735
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
187,994
50,776
Corporation tax recoverable
844,999
814,269
Other debtors
7,418,229
7,754,887
Prepayments and accrued income
214,124
381,814
8,665,346
9,001,746
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
168,199
169,174
Trade creditors
39,170
197,348
Corporation tax
254,845
397,831
Other taxation and social security
58,563
66,573
Other creditors
370,396
279,770
Accruals and deferred income
141,979
107,791
1,033,152
1,218,487
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
17
408,372
575,596
17
Loans and overdrafts
2023
2022
£
£
Bank loans
576,571
744,770
Payable within one year
168,199
169,174
Payable after one year
408,372
575,596
The Bank of Scotland PLC holds a standard security charge over specific investment properties held in the company and a floating charge over the whole of the assets of the company.
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 21 -
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
54,905
52,243
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
At the reporting end date the company had a defined contribution pension liability included in creditors of £7,302 (2022 - £7,236).
19
Share capital
As restated
As restated
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary "A" shares of £1 each
40
40
40
40
Ordinary "B" shares of £1 each
40
40
40
40
Ordinary "C" shares of £1 each
10
10
10
10
Ordinary "D" shares of £1 each
10
10
10
10
100
100
100
100
The company's issued share capital consisting of the Ordinary "A", Ordinary "B", Ordinary "C", and Ordinary "D" shares carry no right to fixed income and each carry the right to one vote at general meetings of the company.
20
Reserves
Profit and loss reserves
This reserve records the accumulated distributable profits made by the company net of distributions to shareholders.
21
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Recharged expenses
Recharged expenses
Rental income
Rental income
2023
2022
2023
2022
£
£
£
£
Entities over which the entity has control, joint control or significant influence
287,901
637,352
31,400
42,600
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
21
Related party transactions (continued)
- 22 -
Expenses recharged
Expenses recharged
2023
2022
£
£
Entities over which the entity has control, joint control or significant influence
-
124,142
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
6,571,604
7,236,905
22
Directors' transactions
At 30 September 2023 the company is due £753,965 from two of the directors (2022 - £445,191). The loans have no set repayment terms.
23
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
704,998
930,704
Adjustments for:
Taxation charged
102,253
232,867
Finance costs
52,012
15,549
Loss on disposal of tangible fixed assets
-
73,861
Fair value loss on investment properties
252,735
Depreciation and impairment of tangible fixed assets
101,295
49,118
Movements in working capital:
Decrease/(increase) in debtors
603,114
(43,885)
(Decrease)/increase in creditors
(41,374)
436,759
Cash generated from operations
1,775,033
1,694,973
EILDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 23 -
24
Analysis of changes in net funds/(debt)
1 October 2022
Cash flows
30 September 2023
£
£
£
Cash at bank and in hand
398,631
625,320
1,023,951
Debt due within one year
(169,174)
975
(168,199)
Debt due after on year
(575,596)
167,224
(408,372)
(346,139)
793,519
447,380
25
Company information
Eildon Limited is a private company limited by shares incorporated in Scotland. The registered office is Eildon House, 39 High Street, Inverness, IV1 1HT.
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