R. Clouston Ltd.

	Page
Balance Sheet	1—2
Notes to the Financial Statements	3—12

2.1. Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 section 1A Small Entities "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

2.2. Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs lo 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 lo the extent of the expenses recognised that are recoverable.

2.3. Intangible Fixed Assets and Amortisation - Other Intangible

Costs of entering into property leases are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over the term of the lease.

2.4. Tangible Fixed Assets and Depreciation

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided at rates calculated to write off the cost of the fixed assets, less their estimated residual value, over their expected useful lives on the following bases:

Leasehold	Equal instalments over lease term
Plant & Machinery	25% reducing balance basis
Motor Vehicles	25% reducing balance basis
Fixtures & Fittings	25% reducing balance basis
Computer Equipment	25% reducing balance basis

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.

2.5. Investment Properties

lnvestment 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. The surplus or deficit on revaluation is recognised in the profit and loss account.

2.6. Leasing and Hire Purchase Contracts

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives. Assets acquired under hire purchase contracts are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in the creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to profit and loss account as incurred.

2.7. Stocks and Work in Progress

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

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.

2.8. Financial Instruments

The company has elected to apply the provisions of Section '11 'Basic Financial lnstruments' 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.

Classification of financial liabilities

Financial liabiiities 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 liabililies

...CONTINUED

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R. Clouston Ltd.

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2026

2.8. Financial Instruments - continued

Basic financial liabilities, including creditors and bank loans, are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amorlised cost, using the efiective interest rate method. Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary courseof business from suppliers. Amounts payable are classified as current liabilities if payment is due with one year or less. lf 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.

2.9. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and 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 end of the reporting period.

Deferred tax is recognised on timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable timing differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible timing differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. The measurement of deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax are recognised in profit or loss for the year, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case current and deferred tax are recognised in other comprehensive income or directly in equity respectively.

2.10. Pensions

The company operates a defined pension contribution scheme. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme.

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R. Clouston Ltd.

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2026

2.11. Government Grant

Government grants are recognised in the profit and loss account in an appropriate manner that matches them with the expenditure towards which they are intended to contribute.

Grants for immediate financial support or to cover costs already incurred are recognised immediately in the profit and loss account. Grants towards general activities of the entity over a specific period are recognised in the profit and loss account over that period.

Grants towards fixed assets are recognised over the expected useful lives of the related assets and are treated as deferred income and released to the profit and loss account over the useful life of the asset concerned.

All grants in the profit and loss account are recognised when all conditions for receipt have been complied with.

2.12. Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of comptetion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract cosls if the contract is obtained in a subsequent period.

The "percentage of completion method" is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work ferformed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion.

These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

2.13. 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.

3. Average Number of Employees

Average number of employees, including directors, during the year was: 49 (2025: 45)

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R. Clouston Ltd.

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2026

4. Intangible Assets

	Other
	£
Cost
As at 1 April 2025	3,476

As at 31 March 2026	3,476

Amortisation
As at 1 April 2025	3,435
Provided during the period	37

As at 31 March 2026	3,472

Net Book Value
As at 31 March 2026	4

As at 1 April 2025	41

5. Tangible Assets

	Land & Property
	Leasehold	Investment Properties	Plant & Machinery	Motor Vehicles
	£	£	£	£
Cost or Valuation
As at 1 April 2025	2,093	630,000	503,656	531,793
Additions	-	-	11,389	73,103
Revaluation	-	40,000	-	-

As at 31 March 2026	2,093	670,000	515,045	604,896

Depreciation
As at 1 April 2025	2,093	-	329,268	369,650
Provided during the period	-	-	46,041	45,502

As at 31 March 2026	2,093	-	375,309	415,152

Net Book Value
As at 31 March 2026	-	670,000	139,736	189,744

As at 1 April 2025	-	630,000	174,388	162,143

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R. Clouston Ltd.

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2026


	Fixtures & Fittings	Total
	£	£
Cost or Valuation
As at 1 April 2025	81,576	1,749,118
Additions	5,669	90,161
Revaluation	-	40,000

As at 31 March 2026	87,245	1,879,279

Depreciation
As at 1 April 2025	46,361	747,372
Provided during the period	9,707	101,250

As at 31 March 2026	56,068	848,622

Net Book Value
As at 31 March 2026	31,177	1,030,657

As at 1 April 2025	35,215	1,001,746

lnvestment properties held by the company at the financial year end are shown at fair value. The director valued the properties based on his knowledge of the market and experience and regards the valuation to provide a true and fair view.

lf investment properties were stated on an historical cost basis rather than a fair value basis, the cost would have been £520,036 (2025: £520,036), accumulated depreciation £166,412 (2025: £156,011), net carrying amount £353,624 (2025: £364,025).

Cost or valuation as at 31 March 2026 represented by:

	Land & Property
	Leasehold	Investment Properties	Plant & Machinery	Motor Vehicles
	£	£	£	£
At cost	2,093	670,000	515,045	604,896

	2,093	670,000	515,045	604,896


	Fixtures & Fittings	Total
	£	£
At cost	87,245	1,879,279

	87,245	1,879,279

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R. Clouston Ltd.

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2026

6. Investments

	Unlisted	Other	Total
	£	£	£
Cost or Valuation
As at 1 April 2025	100	100	200

As at 31 March 2026	100	100	200

Provision
As at 1 April 2025	-	-	-

As at 31 March 2026	-	-	-

Net Book Value
As at 31 March 2026	100	100	200

As at 1 April 2025	100	100	200

lnvestments in unlisted entities, including subsidiary companies, are shown at historic cost less provision for any impairment.

7. Debtors

	2026	2025
	£	£
Due within one year
Trade debtors	308,239	196,326
Amounts recoverable on contracts	453,903	671,731
Amounts owed by group undertakings	2,039,276	671,870
Other debtors	961,099	544,163

	3,762,517	2,084,090

8. Creditors: Amounts Falling Due Within One Year

	2026	2025
	£	£
Net obligations under finance lease and hire purchase contracts	14,835	17,855
Trade creditors	145,294	474,118
Bank loans and overdrafts	16,843	39,533
Other creditors	1,081,329	410,699
Taxation and social security	323,285	241,143

	1,581,586	1,183,348

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R. Clouston Ltd.

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2026

9. Creditors: Amounts Falling Due After More Than One Year

	2026	2025
	£	£
Net obligations under finance lease and hire purchase contracts	20,012	4,953
Bank loans	74,446	91,270
Other creditors	15,040	16,457

	109,498	112,680

The company has granted to The Royal Bank of Scotland PLC a bond and floating charge over the assets of the company, a standard security over properties at Queen Street, Kirkwall, and 37 & 39 Victoria Street, Kirkwall as security for all bank borrowings.

The company operates certain plant & machinery on hire purchase terms.

Of the creditors falling due after more than one year the following amounts are due after more than five years.

	2026		2025
	£		£
Bank loans	1,560		20,633

10. Obligations Under Finance Leases and Hire Purchase

	2026	2025
	£	£
The future minimum finance lease payments are as follows:
Not later than one year	14,835	17,855
Later than one year and not later than five years	20,012	4,953

	34,847	22,808

	34,847	22,808

11. Capital Grants

	2026	2025
	£	£
Balance at 1 April 2025	16,456	17,873
Increase / (Decrease) in the year	(1,298)	(1,417)

Balance at 31 March 2026	15,158	16,456

The company received government grants relating to improvement works carried out on investment property, held within non-current assets. This grant income is initially deferred and then systematically recognised as income in line with the consumption of beneflts from the property itself.

The company also received grants relating to certain tangible assets. These grants are released to the profit and loss account in line with the depreciation policy of the associated assets.

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R. Clouston Ltd.

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2026

12. Share Capital

	2026	2025
Allotted, called up and fully paid	£	£
37,500 Ordinary A shares of £ 1 each	37,250	37,250
12,500 Ordinary B shares of £ 1 each	12,250	12,250

	49,500	49,500

13. Other Commitments

The total of future minimum lease payments under non-cancellable operating leases are as following:

	2026	2025
	£	£
Not later than one year	59,260	30,812
Later than one year and not later than five years	168,735	32,947
Later than five years	564,000	-

	791,995	63,759

14. Directors Advances, Credits and Guarantees

An interest free loan with no formal repayment terms has been provided to the director as follows

	As at 1 April 2025	Amounts advanced	Amounts repaid	Amounts written off	As at 31 March 2026
	£	£	£	£	£
Mr Robert Clouston	400,282	1,487	150,050	-	251,719

The above loan is unsecured, interest free and repayable on demand.

15. Reserves

	Profit and Loss Account
	£
As at 1 April 2025	4,348,028
Profit for the year and total comprehensive income	630,413

Dividends paid	(150,000)

As at 31 March 2026	4,828,441

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R. Clouston Ltd.

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2026

Reserves include £137,099 (2025: £107,099) of non-distributable reserves representing unrealised gains on the valuation of investment properties at fair value, less appropriate provision for corporation tax.

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		2026		2025
	Notes	£	£	£	£
FIXED ASSETS
Intangible Assets	4		4		41
Tangible Assets	5		1,030,657		1,001,746
Investments	6		200		200

			1,030,861		1,001,987
CURRENT ASSETS
Stocks		756,921		828,448
Debtors	7	3,762,517		2,084,090
Cash at bank and in hand		1,101,072		1,843,421

		5,620,510		4,755,959
Creditors: Amounts Falling Due Within One Year	8	(1,581,586 )		(1,183,348 )

NET CURRENT ASSETS (LIABILITIES)			4,038,924		3,572,611

TOTAL ASSETS LESS CURRENT LIABILITIES			5,069,785		4,574,598

Creditors: Amounts Falling Due After More Than One Year	9		(109,498 )		(112,680 )

PROVISIONS FOR LIABILITIES
Deferred Taxation			(82,346 )		(64,390 )

NET ASSETS			4,877,941		4,397,528

CAPITAL AND RESERVES
Called up share capital	12		49,500		49,500
Profit and Loss Account			4,828,441		4,348,028

SHAREHOLDERS' FUNDS			4,877,941		4,397,528