Company registration number SC058445
DONALD MACKENZIE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2026
DONALD MACKENZIE LIMITED
COMPANY INFORMATION
Directors
Mr D G Mackenzie
Mr J Macaulay
Mr S Graham
Mr R C Mackenzie
Mr D D Mackenzie
Secretary
Mr D G Mackenzie
Company number
SC058445
Registered office
62 Seafield Road
Inverness
IV1 1SG
Auditor
MacKenzie Kerr Limited
Chartered Accountants and Statutory Auditor
Redwood
19 Culduthel Road
Inverness
IV2 4AA
DONALD MACKENZIE LIMITED
CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2026
Page
Strategic report
1
Directors' report
2 - 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
The following pages do not form part of the statutory financial statements:
Detailed trading and profit and loss account
DONALD MACKENZIE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2026
- 1 -

The directors present the strategic report for the year ended 31 January 2026.

Review of the business

Donald Mackenzie Limited holds the vehicle franchises for Abarth, Alfa Romeo, Izuzu, Jeep and Fiat cars and commercials, with the addition of Mitsubishi from April 2026. In addition to being an authorised service centre for these franchises, Donald Mackenzie Limited wa s a Toyota authorised service centre until December 2025 when this agreement ceased. Th e body shop is approved by many large insurance companies.

Turnover de creased during the year to £11,632,095 with equity shareholders funds increas ing to £8,312,959.

Currently, we are trading prof itably and we anticipate (with the knowledge we currently have) making a profit in the year to 31 January 2027. Cash liquidity is excellent.

Results

The operating profit for the year amounted to £66,380 (20 25 - £126,548) and the profit for the year before taxation was £275,614 (20 25 - £380,341).

Principal risks and uncertainties

The company's financial instruments comprise cash instruments only. The main purpose of the financial instruments is to maintain adequate finance for the company's operations.

The main risk arising from the company's financial instruments are interest rate fluctuations. It is the company's policy to finance its operations through its cash reserves and to review this periodically with regard to the projected cash flow requirements of the company

On behalf of the board

Mr D G Mackenzie
Director
10 July 2026
DONALD MACKENZIE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2026
- 2 -

The directors present their annual report and financial statements for the year ended 31 January 2026.

Principal activities

The principal activity of the company continued to be that of the retailing and servicing of motor vehicles.

Results and dividends

The results for the year are set out on pages 7-23.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr D G Mackenzie
Mr J Forbes
(Retired 11 August 2025)
Mr J Macaulay
Mr S Graham
Mr R C Mackenzie
Mr D D Mackenzie
Auditor

The auditor, MacKenzie Kerr Limited, 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 annual 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; and

- 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.

DONALD MACKENZIE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
- 3 -
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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium companies exemption.

On behalf of the board
Mr D G Mackenzie
Director
10 July 2026
DONALD MACKENZIE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DONALD MACKENZIE LIMITED
- 4 -

Qualified opinion

We have audited the financial statements of Donald Mackenzie Limited (the 'company') for the year ended 31 January 2026 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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

- give a true and fair view of the state of the company's affairs as at 31 January 2026 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.

Basis for qualified opinion

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. With respect to retirement benefits, the evidence available to us was limited as the directors have not obtained a valuation sufficient to comply with the disclosure requirements of FRS 102. There were no other satisfactory audit procedures that we could adopt to obtain this information.

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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

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' r eport 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.

DONALD MACKENZIE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DONALD MACKENZIE LIMITED (CONTINUED)
- 5 -
Matters on which we are required to report by exception

In respect solely of the limitation on our work relating to retirement pensions, described above:

- we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

- we were unable to determine whether adequate accounting records had been maintained.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report or the directors' r eport.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

- the financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of directors' remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' r esponsibilities s tatement, 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

DONALD MACKENZIE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DONALD MACKENZIE LIMITED (CONTINUED)
- 6 -

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company's financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.

Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the Responsible Individual (RI) drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the RI's review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed 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. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

Rhona Wilson, BA, FCCA (Senior Statutory Auditor)
For and on behalf of MacKenzie Kerr Limited
Chartered Accountants and Statutory Auditor
Redwood
19 Culduthel Road
Inverness
IV2 4AA
13 July 2026
DONALD MACKENZIE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2026
- 7 -
2026
2025
Notes
£
£
Turnover
5
11,632,095
12,958,400
Cost of sales
(10,101,313)
(11,212,147)
Gross profit
1,530,782
1,746,253
Distribution costs
(609,750)
(667,611)
Administrative expenses
(854,652)
(952,094)
Operating profit
66,380
126,548
Interest receivable and similar income
10
55,459
63,329
Interest payable and similar expenses
6
(28,530)
(27,326)
Amounts written off investments
7
182,305
217,790
Profit before taxation
275,614
380,341
Tax on profit
9
(63,786)
(97,721)
Profit for the financial year
211,828
282,620

The profit and loss account has been prepared on the basis that all operations are continuing operations.

DONALD MACKENZIE LIMITED
BALANCE SHEET
AS AT 31 JANUARY 2026
31 January 2026
- 8 -
2026
2025
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,709,838
2,716,411
Investments
13
1,852,589
1,676,622
4,562,427
4,393,033
Current assets
Stocks
14
3,994,510
4,018,404
Debtors
15
1,316,423
1,027,056
Cash at bank and in hand
907,434
1,502,090
6,218,367
6,547,550
Creditors: amounts falling due within one year
16
(2,136,046)
(2,551,853)
Net current assets
4,082,321
3,995,697
Total assets less current liabilities
8,644,748
8,388,730
Provisions for liabilities
Deferred tax liability
18
331,789
287,599
(331,789)
(287,599)
Net assets
8,312,959
8,101,131
Capital and reserves
Allotted, called up and fully paid share capital
21
3,400
3,400
Share premium account
37,400
37,400
Revaluation reserve - non distributable
1,309,605
1,309,605
Capital redemption reserve
19,200
19,200
Profit and loss reserves
20
6,943,354
6,731,526
Total equity
8,312,959
8,101,131
The financial statements were approved by the board of directors and authorised for issue on 10 July 2026 and are signed on its behalf by:
Mr D G Mackenzie
Director
Company Registration No. SC058445
DONALD MACKENZIE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2026
- 9 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 February 2024
3,400
37,400
1,309,605
19,200
6,493,906
7,863,511
Year ended 31 January 2025:
Profit and total comprehensive income
-
-
-
-
282,620
282,620
Dividends
8
-
-
-
-
(45,000)
(45,000)
Balance at 31 January 2025
3,400
37,400
1,309,605
19,200
6,731,526
8,101,131
Year ended 31 January 2026:
Profit and total comprehensive income
-
-
-
-
211,828
211,828
Balance at 31 January 2026
3,400
37,400
1,309,605
19,200
6,943,354
8,312,959
DONALD MACKENZIE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2026
- 10 -
2026
2025
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(564,611)
(19,677)
Interest paid
(28,530)
(27,326)
Income taxes paid
(44,626)
(60,267)
Net cash outflow from operating activities
(637,767)
(107,270)
Investing activities
Purchase of tangible fixed assets
(18,686)
(8,222)
Purchase of investments
(87,816)
(17,015)
Proceeds from disposal of investments
93,784
24,500
Cash at brokers
370
(2,504)
Interest received
44,586
52,704
Dividends received
10,873
10,625
Net cash generated from investing activities
43,111
60,088
Financing activities
Dividends paid
-
0
(45,000)
Net cash used in financing activities
-
(45,000)
Net decrease in cash and cash equivalents
(594,656)
(92,182)
Cash and cash equivalents at beginning of year
1,502,090
1,594,272
Cash and cash equivalents at end of year
907,434
1,502,090
DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2026
- 11 -
1
Accounting policies
Company information

Donald Mackenzie Limited is a private company limited by shares incorporated in Scotland. The registered office is 62 Seafield Road, Inverness, IV1 1SG.

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 a mounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

A true t the time of approving the financial statements, t he directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus t he directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover represents the amounts invoiced, excluding value added tax, in respect of the sale of new and used vehicles, parts, repairs and services to customers during the year, wholly undertaken in the UK.

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.

Sales of services are recognised in the accounting period in which the services are rendered, by reference to the completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.

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:

Leasehold land and buildings
Not depreciated
Plant and equipment
Over 4 to 10 years
Office equipment
Over 4 to 10 years

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.

Fixed asset investments

Fixed asset investments are stated at fair value at the balance sheet date.

DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
1
Accounting policies (Continued)
- 12 -
1.5
Impairment of fixed assets

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

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

Parts stock is valued at the lower of costs and net realisable value, which is calculated by taking the total cost of stock less a provision for items greater than one year old. Vehicle stock is valued at the lower of the allowance given, retail value or trade value. Consignment stock is also held by the company on its premises but is not included in the accounts because the title is held by the manufacturer.

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.

1.7
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.

DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
1
Accounting policies (Continued)
- 13 -
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.

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 paymen ts 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. A m ounts 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.

DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
1
Accounting policies (Continued)
- 14 -
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 s ubsequently 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 th r ough 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.

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 statement of comprehensive income 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.

1.11
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.

DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
1
Accounting policies (Continued)
- 15 -
1.12
Retirement benefits

The company operates a funded defined benefit pension scheme providing benefits based on final pensionable pay. The company closed this defined benefit scheme to future member contributions on 30 June 2008. The assets of the scheme are held separately from those of the company, being invested in units in a segregated fund managed by an external investment manager. Contributions to the scheme are charged to the profit and loss account so as to spread the cost of pensions over the employees' working lives with the company. The contributions are determined by a qualified actuary on the basis of valuations. The most recent valuation was made as at 31 August 202 4.

The valuation was made using the defined accrued benefit method. The principal assumptions used were:

(i) a future infl ation rate of 3.40% p.a.

(ii) deferred pension increases of 3.15% p.a.

(iii) pension increases in payment to 3.15% p.a.

(iv) a rate used to discount scheme liabilities of 4.90%.

The market value of the assets of the scheme at the valuation date was £2,469,000 with a surplus of assets over liabilities of £510,000.

The Schedule of Contributions agreed on 30 July 2025 requires the employer to pay no further deficit recovery contributions.

The pension charge for the year was £9,000 (202 5 - £1 8,0 00), in addition there was a further £34,448 administration costs (202 5 - £1 4,294).

Defined contribution scheme

From April 2008, the company operated a defined contribution pension scheme.

The pension charge for the year was £58,071 (202 5 - £121,332). Contributions outstanding at the balance sheet date amounted to £9,776 (202 5 - £10,708).

Contributions in respect of three directors are made to a defined contribution scheme and are charged to the profit and loss account for the year in which they are payable to the scheme. The pension charge for the year was £7,056 (202 5 - £4 7,025).

1.13

Grants

Government grants are recognised at the fair value of the asset receive d or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
- 16 -
2
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2026
2025
Number
Number
Administration
12
13
Sales
8
8
Service
29
31
Total
49
52

Their aggregate remuneration comprised:

2026
2025
£
£
Wages and salaries
1,611,416
1,678,814
Social security costs
182,607
161,534
Pension costs
67,070
139,332
1,861,093
1,979,680
3
Auditor's remuneration
2026
2025
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
8,500
8,250
For other services
All other non-audit services
2,500
3,850
4
Directors' remuneration
2026
2025
£
£
Remuneration for qualifying services
165,862
187,289
Company pension contributions to defined contribution schemes
7,056
47,025
172,918
234,314

The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 3 (2025 - 3).

The directors of the company are considered to be the only key management personnel.

DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
- 17 -
5
Turnover and other revenue
2026
2025
£
£
Turnover
Sales
11,617,469
12,929,443
Commission
14,626
28,957
11,632,095
12,958,400
2026
2025
£
£
Other significant revenue
Interest income
44,586
52,704
Dividends received
10,873
10,625
6
Interest payable and similar expenses
2026
2025
£
£
Interest on financial liabilities measured at amortised cost
Interest on bank overdrafts and loans
28,530
27,326
7
Gain on investments
2026
2025
£
£
Loss on disposal of fixed asset investments
(6,638)
(2,736)
Other gains and losses
188,943
220,526
182,305
217,790
8
Dividends
2026
2025
£
£
Interim paid
-
0
45,000
DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
- 18 -
9
Taxation
2026
2025
£
£
Current tax
UK corporation tax on profits for the current period
19,596
44,626
Deferred tax
Origination and reversal of timing differences
44,190
53,095
Total tax charge
63,786
97,721

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:

2026
2025
£
£
Profit before taxation
275,614
380,341
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2025: 25.00%)
68,904
95,085
Tax effect of expenses that are not deductible in determining taxable profit
(39,212)
(54,397)
Permanent capital allowances in excess of depreciation
(5,111)
7,205
Other differences
(2,951)
(2,450)
Deferred tax
44,190
53,095
Marginal relief
(2,034)
(817)
Taxation charge for the year
63,786
97,721
10
Interest receivable and similar income
2026
2025
£
£
Interest income
Interest on bank deposits
44,586
52,704
Other income from investments
Dividends received
10,873
10,625
Total income
55,459
63,329
DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
- 19 -
11
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Office equipment
Total
£
£
£
£
Cost or valuation
At 1 February 2025
2,641,199
411,195
147,859
3,200,253
Additions
-
0
17,446
1,240
18,686
Disposals
-
0
(5,807)
-
0
(5,807)
At 31 January 2026
2,641,199
422,834
149,099
3,213,132
Depreciation and impairment
At 1 February 2025
-
0
340,199
143,643
483,842
Depreciation charged in the year
-
0
23,337
1,922
25,259
Eliminated in respect of disposals
-
0
(5,807)
-
0
(5,807)
At 31 January 2026
-
0
357,729
145,565
503,294
Carrying amount
At 31 January 2026
2,641,199
65,105
3,534
2,709,838
At 31 January 2025
2,641,199
70,996
4,216
2,716,411

Land and buildings with a carrying amount of £2,641,199 were revalued at 24 October 2016 by Graham & Sibbald, Chartered Surveyors, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

The directors consider that the market value at the balance sheet date is not materially different to the valuation date.

Leasehold land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been £1,128,118 (2025 - £1,128,118).

12
Impairments

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

Impairments and reversals of previous impairment losses have been recognised in profit or loss as follows:

2026
2025
Notes
£
£
In respect of:
Fixed asset investments
13
188,943
220,526
Recognised in:
(Impairment) / reversal of impairment of fixed asset investments
188,943
220,526
DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
- 20 -
13
Fixed asset investments
2026
2025
£
£
Listed investments
1,849,895
1,673,558
Cash at brokers
2,694
3,064
1,852,589
1,676,622

Listed investments included above:

Listed investments carrying amount
1,849,895
1,673,558
Movements in fixed asset investments
Listed investments
Cash at brokers
Total
£
£
£
Cost or valuation
At 1 February 2025
1,673,558
3,064
1,676,622
Additions
87,816
-
87,816
Valuation changes
188,943
-
188,943
Decrease in cash
-
(370)
(370)
Disposals
(100,422)
-
(100,422)
At 31 January 2026
1,849,895
2,694
1,852,589
Carrying amount
At 31 January 2026
1,849,895
2,694
1,852,589
At 31 January 2025
1,673,558
3,064
1,676,622
14
Stocks
2026
2025
£
£
Stocks
3,994,510
4,018,404
15
Debtors
2026
2025
Amounts falling due within one year:
£
£
Trade debtors
644,992
573,275
Other debtors
588,635
370,851
Prepayments and accrued income
82,796
82,930
1,316,423
1,027,056
DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
- 21 -
16
Creditors: amounts falling due within one year
2026
2025
£
£
Trade creditors
631,704
416,700
Corporation tax
19,596
44,626
Other taxation and social security
215,196
192,326
Other creditors
82,165
109,237
Accruals and deferred income
1,187,385
1,788,964
2,136,046
2,551,853
17
Secured Debt

Although the company has no borrowing from Royal Bank of Scotland, the bank hold a bond and floating charge over the assets of the company.

18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2026
2025
Balances:
£
£
Accelerated capital allowances
15,158
16,361
Tax losses
(33,641)
(33,641)
Revaluations
203,477
203,477
Investments
146,795
101,402
331,789
287,599
2026
Movements in the year:
£
Liability at 1 February 2025
287,599
Charge to profit or loss
44,190
Liability at 31 January 2026
331,789
DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
- 22 -
19
Retirement benefit schemes
2026
2025
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
58,070
121,332

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.

20
Profit and loss reserves

Included within profit and loss reserves are non-distributable reserves of £440,386 (2025 - £304,205).

21
Share capital
2026
2025
£
£
Ordinary share capital
Called up and fully paid
3,400 Ordinary of £1 each
3,400
3,400
22
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

At the balance sheet date, the company is owed £357,000 (2025 - £357,000) by N500 Holding Ltd, which is jointly controlled by one of the directors. This loan is interest free, unsecured and repayable on demand.

At the balance sheet date, the company owed a director £62,680 (2025- £85,245). This loan is interest free, unsecured with no fixed terms of repayment.

Included in non audit services is an amount of £1,700 (2025- £1,600) paid for on behalf of Donald Mackenzie Limited Retirement Benefit Scheme.

DONALD MACKENZIE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2026
- 23 -
23
Cash absorbed by operations
2026
2025
£
£
Profit after taxation
211,828
282,620
Adjustments for:
Taxation charged
63,786
97,721
Finance costs
28,530
27,326
Investment income
(55,459)
(63,329)
Depreciation and impairment of tangible fixed assets
25,259
27,480
Loss on sale of investments
6,638
2,736
Other gains and losses
(188,943)
(220,526)
Movements in working capital:
Decrease/(increase) in stocks
23,894
(1,687,182)
(Increase)/decrease in debtors
(289,367)
49,752
(Decrease)/increase in creditors
(390,777)
1,463,725
Cash absorbed by operations
(564,611)
(19,677)
24
Analysis of changes in net funds
1 February 2025
Cash flows
31 January 2026
£
£
£
Cash at bank and in hand
1,502,090
(594,656)
907,434
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