The directors present the strategic report for the year ended 31 December 2025.

The principal activity of the Company during the financial year continued to be that of the servicing and selling of agricultural machinery.

The company delivered a profitable financial performance during the year, notwithstanding a reduction in turnover compared to the prior period. The business remains self‑funded, with no reliance on external bank finance, and continues to operate with a strong balance sheet supported by significant cash reserves. The directors have maintained their approach of reinvesting profits back into the business and are satisfied with the results for the year ended 31 December 2025.

The company’s operations are subject to a range of risks and uncertainties inherent in the agricultural sector. The primary risk continues to be adverse and unpredictable weather conditions, which can have a direct impact on customer demand and the timing of machinery purchases. In addition, general economic and trading conditions, including cost inflation and margin pressure from manufacturers, remain ongoing areas of uncertainty.

The directors continue to monitor these risks closely and believe that the company’s strong financial position and flexible operating model place it in a good position to manage potential adverse conditions.

During the year, the company continued to operate in line with prior periods, with no significant changes to the nature or scale of operations. The focus remained on maintaining profitability, managing stock levels effectively, and controlling costs in response to market conditions. No material developments or restructurings took place during the year.

The directors monitor the performance of the business using a range of key performance indicators, including gross profit margin, the ratio of wages to sales, chargeable hours, and profit per sale on wholegoods. These KPIs are reviewed regularly and provide the directors with relevant information to assess operational efficiency and financial performance. While gross margins reduced during the year, overall performance remained satisfactory given prevailing market conditions.

The company continues to seek opportunities to enhance turnover and profitability where appropriate. Focus remains on optimising returns from existing operations and maintaining a disciplined approach to cost control and stock management. The directors are confident that the company’s strong balance sheet, profitability, and established market position will support its continued success and long‑term sustainability.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £1,500. The directors do not recommend payment of a further dividend.

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

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.

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.

We have audited the financial statements of Alan MacKay Machinery (Forfar) Limited (the 'company') for the year ended 31 December 2025 which comprise the statement of income and retained earnings, the balance sheet, 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 31 December 2025 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 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.

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' 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.

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 directors' remuneration specified by law are not made; or

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

As explained more fully in the directors' responsibilities statement, 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.

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 of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material mis-statements in respect of irregularities, including fraud and non-compliance with laws and regulations as detailed below.

The audit team has appropriate skills and expertise required and through discussions with management and Directors, knowledge of the sector to ensure any non compliance is recognised and all necessary disclosures are made. The controls in place help the company mitigate the risk of fraud and also aids them in highlighting any instances of fraud that might have occurred.

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

• Inquiry of management regarding any known or suspected instances of non‑compliance with laws and regulations, including GDPR, health and safety, FCA regulations, employment law, and fraud.

• Inquiry of management as to areas considered susceptible to fraud, including management’s understanding of how actual, suspected, or alleged fraud could occur within the business.

• Review of correspondence with regulators, including HMRC and the FCA, for indications of adverse matters or non-compliance.

• Assessment and challenge of management’s key accounting judgments and estimates to consider the risk of error or bias.

• Addressing the risk of management override of controls, including testing of journal entries and other management adjustments for appropriateness.

• Review of large, unusual, or non‑routine transactions, including consideration of potential management bias and the risk of undisclosed related party transactions.

• Analytical procedures performed to identify unusual or unexpected relationships or transactions.

• Cut‑off testing over revenue to address the risk of inappropriate revenue recognition.

• Directional testing of sales invoices to address completeness of revenue.

Because of the field in which the company operates in, we identified the following areas as those most likely to have a material impact on the financial statements:

Direct impact on financial statements:

• Companies Act 2006

• FRS 102

• Corporate tax laws

Indirect impact on financial statements:

• Employments laws

• Health & Safety Act

• GDPR

• FCA regulations

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

Use of our 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.

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

The notes on pages 10 to 19 form part of these financial statements.

The notes on pages 10 to 19 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The notes on pages 10 to 19 form part of these financial statements.

Alan MacKay Machinery (Forfar) Limited is a private company limited by shares incorporated in Scotland. The registered office is Garthfield, Padanaram, Forfar, DD8 1PF.

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 £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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.

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Revenue from the sale of agricultural machinery, parts and related services is recognised at the point at which goods or services are invoiced and control passes to the customer.

Workshop labour work in progress is recognised at direct labour cost only. Parts associated with incomplete jobs remain included within stock until invoiced. No profit is recognised in work in progress.

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:

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.

At the end of each reporting period, the company assesses whether there is any indication that its tangible assets may be impaired. If such an indication exists, the recoverable amount of the asset is estimated to determine any impairment loss.

Stocks are stated at the lower of cost and net realisable value. Cost comprises purchase price together with directly attributable costs incurred in bringing the stock to its present location and condition.

Work in progress relates solely to workshop labour performed but not yet invoiced at the year end and is valued at direct labour cost only. Parts associated with incomplete jobs remain included within stock until invoiced. No profit is recognised in work in progress. Due to the nature of the business, work in progress balances are immaterial.

Stocks are reviewed at each reporting date to assess whether any impairment is required. Where the net realisable value of individual stock items is estimated to be lower than cost, a write‑down is recognised to reflect expected recoverable amounts.

Stock provisions are determined on an item‑by‑item basis for both parts and wholegoods, with impairment percentages applied depending on the nature, age and condition of the stock item. The assessment is informed by prior‑year written‑down values, historical sales patterns and management’s expectation of recoverability.

Any write‑downs are recognised through cost of sales and are not held within a separate provision account. Where conditions improve and the reasons for a write‑down no longer apply, previously recognised impairments may be reversed, subject to the lower of original cost or revised net realisable value.

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.

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, 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.

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, 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.

Financial risk management

The company’s financial instruments comprise cash and bank balances, bank borrowings, and trade debtors and creditors. Credit risk arises principally from trade receivables; however, the directors consider exposure to be limited due to the customer base and ongoing credit control procedures. Liquidity and cash flow risk are managed through regular cash flow forecasting and the availability of bank facilities. The directors consider the company’s exposure to price risk to be insignificant.

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.

The 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 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 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.

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.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

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.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The company holds significant levels of stock, and judgement is required in assessing whether the carrying value of individual stock items exceeds their net realisable value. Management reviews stock on an item‑by‑item basis and applies write‑downs where appropriate, with impairment percentages varying depending on the age, condition and expected recoverability of the stock item.

The assessment is informed by prior‑year written‑down values, historical sales experience and management’s expectations of future demand. Any write‑downs are recognised through cost of sales. While judgement is involved, the directors consider the resulting stock valuation to be reasonable and appropriate.

Depreciation is provided on property, plant and equipment so as to write off the cost of assets over their estimated useful lives. The estimation of useful lives and residual values requires judgement, based on the expected period over which the assets will generate economic benefits.

Depreciation rates are reviewed periodically in light of actual usage and experience. The directors consider that the depreciation policies adopted are appropriate and result in a reasonable charge for the year.

The company makes an estimate of the recoverability of trade receivables based on the ageing of debts, historical payment patterns, and management’s knowledge of individual customer circumstances. Where amounts are considered irrecoverable, appropriate provisions are recognised.

Judgement is applied in determining the timing and extent of any provision; however, given the established customer base and close monitoring of receivables, the directors consider the level of any provision recognised to be reasonable.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2024 - 1).

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:

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

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.

Dividends totalling £1,500 (2024 - £1,500) were paid in the year in respect of shares held by the company's directors.

During the year the company paid rent of £78,000 (2024: £78,000) to a director in respect of property rental. The transaction was conducted on normal commercial terms. At the year end, amounts outstanding in respect of rent totalled £15,600 (2024: £7,800).