Company Registration No. SC395299 (Scotland)
KERLOCH OIL TOOLS LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
PAGES FOR FILING WITH REGISTRAR
KERLOCH OIL TOOLS LIMITED
COMPANY INFORMATION
Directors
Mr W N Cordiner
Mr R J Gordon
Mr C Manderson (Resigned 2 April 2019)
Company number
SC395299
Registered office
Woodside Road
Aberdeen
AB23 8EF
KERLOCH OIL TOOLS LIMITED
CONTENTS
Page
Balance sheet
2 - 3
Notes to the financial statements
4 - 9
KERLOCH OIL TOOLS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2018.
Principal activities
The principal activity of the company continued to be the provision of premium threading services.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr W N Cordiner
Mr C Manderson
(Resigned 2 April 2019)
Mr R J Gordon
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
MR W N CORDINER
Mr W N Cordiner
Director
6 September 2019
KERLOCH OIL TOOLS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2018
31 December 2018
- 2 -
2018
2017
Notes
£
£
£
£
Fixed assets
Intangible assets
3
205,130
253,130
Tangible assets
4
117,170
129,764
322,300
382,894
Current assets
Stock and work in progress
97,070
-
Debtors
5
807,843
512,857
Cash at bank and in hand
44,292
27,119
949,205
539,976
Creditors: amounts falling due within one year
6
(1,026,165)
(726,150)
Net current liabilities
(76,960)
(186,174)
Total assets less current liabilities
245,340
196,720
Creditors: amounts falling due after more than one year
7
(1,158,207)
(1,246,853)
Net liabilities
(912,867)
(1,050,133)
Capital and reserves
Called up share capital
10,000
10,000
Profit and loss reserves
(922,867)
(1,060,133)
Total equity
(912,867)
(1,050,133)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
For the financial year ended 31 December 2018 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
KERLOCH OIL TOOLS LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2018
31 December 2018
- 3 -
The financial statements were approved by the board of directors and authorised for issue on 6 September 2019 and are signed on its behalf by:
MR W N CORDINER
MR R J GORDON
Mr W N Cordiner
Mr R J Gordon
Director
Director
Company Registration No. SC395299
KERLOCH OIL TOOLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
- 4 -
1
Accounting policies
Company information
Kerloch Oil Tools Limited is a
private
company
limited by shares
incorporated in Scotland.
The registered office is
Woodside Road, Aberdeen, AB23 8EF.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the 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
The year to 31 December 2018 has seen significant improvement in both turnover and profitability over the previous period. Both net current liabilities and the excess of liabilities over assets have reduced. While there is still an overall excess of liabilities over assets of £912,867 at 31 December 2018, included within creditors falling due in greater than one year are loans totalling in excess of £1,158,000 from the directors or companies controlled by the directors. It has been agreed that these loans will not be repaid to the detriment of any third party creditors.
Since the year end, the company has continued to trade profitably.
The directors, having made due and careful enquiry preparing forecasts and assessing current profitability are of the opinion that the company will have adequate working capital to execute its operations over the next 12 months.
The directors have also had no indication from the bank that facilities may be withdrawn or renewed on adverse terms.
Taking into account the above, on this basis, the directors believe it is appropriate that the financial statements are to be prepared on the going concern basis and the company can continue as a going concern, meeting its obligations and liabilities as they fall due.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
KERLOCH OIL TOOLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 5 -
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Tenants improvements
period of lease
Plant and equipment
5-15 years
Computers
2-4 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
.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the 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.
KERLOCH OIL TOOLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 6 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
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.
1.8
Cash at bank and in hand
Cash at bank and in hand
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.
1.9
Financial instruments
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors and loans from group companies. These are measured at amortised cost and are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.
1.10
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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
KERLOCH OIL TOOLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 7 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
The company operates a defined contribution plan for it's employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.
KERLOCH OIL TOOLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 8 -
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 30 (2017 - 23
).
3
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2018 and 31 December 2018
535,573
Amortisation and impairment
At 1 January 2018
282,443
Amortisation charged for the year
48,000
At 31 December 2018
330,443
Carrying amount
At 31 December 2018
205,130
At 31 December 2017
253,130
4
Tangible fixed assets
Tenants improvements
Plant and equipment
Computers
Total
£
£
£
£
Cost
At 1 January 2018
58,742
351,771
43,551
454,064
Additions
1,980
27,907
1,173
31,060
At 31 December 2018
60,722
379,678
44,724
485,124
Depreciation and impairment
At 1 January 2018
56,430
229,988
37,882
324,300
Depreciation charged in the year
1,559
37,881
4,214
43,654
At 31 December 2018
57,989
267,869
42,096
367,954
Carrying amount
At 31 December 2018
2,733
111,809
2,628
117,170
At 31 December 2017
2,312
121,783
5,669
129,764
KERLOCH OIL TOOLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 9 -
5
Debtors
2018
2017
Amounts falling due within one year:
£
£
Trade debtors
623,122
466,451
Other debtors and accrued income
184,721
46,406
807,843
512,857
6
Creditors: amounts falling due within one year
2018
2017
£
£
Bank factoring facility
316,255
309,968
Trade creditors
373,522
223,529
Taxation and social security
130,333
100,687
Other creditors
206,055
91,966
1,026,165
726,150
7
Creditors: amounts falling due after more than one year
2018
2017
£
£
Other creditors
1,158,207
1,246,853
8
Operating lease commitments
Lessee
At the reporting end date the company had outstanding annual commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2018
2017
£
£
Amounts due within 2 - 5 years
179,289
221,236
9
Related party transactions
The following amounts were outstanding at the reporting end date:
2018
2017
Amounts owed to related parties
£
£
Companies under common control
977,901
1,023,770
Directors
180,306
223,081