Company Registration No. SC521163 (Scotland)
SCM Bobbin Limited
Annual report and financial statements
for the year ended 31 December 2022
SCM Bobbin Limited
Company information
Directors
G G M Shand
S G Rhodes
N F A Clinton
(Appointed 6 June 2022)
Secretary
Burness Paull LLP
Company number
SC521163
Registered office
Union Plaza
1 Union Wynd
Aberdeen
AB10 1DQ
Independent auditor
Saffery Champness LLP
Kintail House
Beechwood Park
Inverness
IV2 3BW
SCM Bobbin Limited
Contents
Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 17
SCM Bobbin Limited
Directors' report
For the year ended 31 December 2022
Page 1
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of property rental.
Results and dividends
The results for the year are set out on page 8.
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:
G G M Shand
K McKenzie
(Resigned 6 June 2022)
S G Rhodes
N F A Clinton
(Appointed 6 June 2022)
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.
Going concern
As at 31 December 2022, the company has a net asset position amounting to £573,010 (2021 - £574,298) as disclosed in the financial statements.
The parent company has undertaken to provide financial support to the company in order to assist the company in meeting liabilities incurred in the normal course of its business as and when they fall due, for the going concern period to 30 June 2024.
The parent company directors have assessed profitability and cash flow forecasts, including significant but plausible downside sensitivities, applied to turnover and profitability for a range of issues. This assessment shows substantial headroom within the forecasts as regards the funding resources available to the Group. The parent company Directors believe that sufficient funds are available to allow the company and all subsidiaries to continue to meet our obligations for the going concern period to 30 June 2024 and that it therefore remains appropriate to prepare the financial statements on a going concern basis.
As part of the Group, the company has access to financial resources as required. We remain confident that our financial resources are strong, well balanced and suitably liquid. The Group has a positive cash at bank position of approximatively £15m at the time of this report and the current year trading performance remains strong in terms of profitability and cash generation.
SCM Bobbin Limited
Directors' report (continued)
For the year ended 31 December 2022
Page 2
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
G G M Shand
Director
20 June 2023
SCM Bobbin Limited
Directors' responsibilities statement
For the year ended 31 December 2022
Page 3
The directors are responsible for preparing the directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.
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.
SCM Bobbin Limited
Independent auditor's report
To the members of SCM Bobbin Limited
Page 4
Opinion
We have audited the financial statements of SCM Bobbin Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 2022 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
SCM Bobbin Limited
Independent auditor's report (continued)
To the members of SCM Bobbin Limited
Page 5
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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 the audit:
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out on page 3, 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.
SCM Bobbin Limited
Independent auditor's report (continued)
To the members of SCM Bobbin Limited
Page 6
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
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 engagement partner 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 engagement partner’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.
SCM Bobbin Limited
Independent auditor's report (continued)
To the members of SCM Bobbin Limited
Page 7
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: 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.
Eunice McAdam
Senior Statutory Auditor
For and on behalf of Saffery Champness LLP
26 June 2023
Chartered Accountants
Statutory Auditors
Kintail House
Beechwood Park
Inverness
IV2 3BW
SCM Bobbin Limited
Statement of comprehensive income
For the year ended 31 December 2022
Page 8
2022
2021
Notes
£
£
Turnover
3
84,000
84,000
Administrative expenses
(84,000)
(84,000)
Profit before taxation
Tax on profit
6
(1,288)
(51,378)
Loss for the financial year
(1,288)
(51,378)
There was no other comprehensive income for 2022 or 2021.
SCM Bobbin Limited
Balance sheet
As at 31 December 2022
Page 9
2022
2021
Notes
£
£
£
£
Fixed assets
Investment properties
7
1,400,000
1,400,000
Current assets
-
-
Creditors: amounts falling due within one year
8
(636,243)
(636,243)
Net current liabilities
(636,243)
(636,243)
Total assets less current liabilities
763,757
763,757
Provisions for liabilities
Deferred tax liability
9
(190,747)
(189,459)
(190,747)
(189,459)
Net assets
573,010
574,298
Capital and reserves
Called up share capital
10
1
1
Profit and loss reserves
573,009
574,297
Total equity
573,010
574,298
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 20 June 2023 and are signed on its behalf by:
G G M Shand
Director
Company Registration No. SC521163
SCM Bobbin Limited
Statement of changes in equity
For the year ended 31 December 2022
Page 10
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2021
1
625,675
625,676
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
(51,378)
(51,378)
Balance at 31 December 2021
1
574,297
574,298
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(1,288)
(1,288)
Balance at 31 December 2022
1
573,009
573,010
SCM Bobbin Limited
Notes to the financial statements
For the year ended 31 December 2022
Page 11
1
Accounting policies
Company information
SCM Bobbin Limited is a private company limited by shares incorporated in Scotland. The registered office is Union Plaza, 1 Union Wynd, Aberdeen, AB10 1DQ.
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 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, modified to include investment property at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); and
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Highland Fuels (Investments) Limited. These consolidated financial statements are available from its registered office, Union Plaza, 1 Union Wynd, Aberdeen, AB10 1DQ.
SCM Bobbin Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
Page 12
1.2
Going concern
As at 31 December 2022, the company has a net asset position amounting to £573,010 (2021 - £578,298) as disclosed in the financial statements.
The parent company has undertaken to provide financial support to the company in order to assist the company in meeting liabilities incurred in the normal course of its business as and when they fall due, for the going concern period to 30 June 2024.
The parent company directors have assessed profitability and cash flow forecasts, including significant but plausible downside sensitivities, applied to turnover and profitability for a range of issues. This assessment shows substantial headroom within the forecasts as regards the funding resources available to the Group. The parent company Directors believe that sufficient funds are available to allow the company and all subsidiaries to continue to meet our obligations for the going concern period to 30 June 2024 and that it therefore remains appropriate to prepare the financial statements on a going concern basis.
As part of the Group, the company has access to financial resources as required. We remain confident that our financial resources are strong, well balanced and suitably liquid. The Group has a positive cash at bank position of approximatively £15m at the time of this report and the current year trading performance remains strong in terms of profitability and cash generation.
1.3
Turnover
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added vat and other sales taxes.
1.4
Investment properties
Investment property is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.5
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.
SCM Bobbin Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
Page 13
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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
1.6
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.
SCM Bobbin Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 14
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following are the company's key sources of estimation uncertainty:
Revaluation of investment properties
The Company carries its investment properties at fair value, with changes in the fair value being recognised in the profit and loss account.
3
Turnover and other revenue
All turnover arose within the United Kingdom.
SCM Bobbin Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 15
4
Auditor's remuneration
The audit fee for the period was incurred by Highland Fuels Limited.
5
Employees
The company has no employees other than the directors who did not receive any remuneration (2021 - £nil).
2022
2021
Number
Number
Total
6
Taxation
2022
2021
£
£
Deferred tax
Origination and reversal of timing differences
1,288
5,908
Changes in tax rates
45,470
Total deferred tax
1,288
51,378
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
Tax effect of expenses that are not deductible
4,715
Effect of change in corporation tax rate
309
45,470
Group relief
979
1,193
Taxation charge for the year
1,288
51,378
SCM Bobbin Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 16
7
Investment property
2022
£
Fair value
At 1 January 2022 and 31 December 2022
1,400,000
The fair value of the investment property has been arrived at on the basis of a valuation carried out at 31 December 2020 by Graham & Sibbald, Chartered Surveyors, who are not connected with the company. The valuation was carried out in accordance with the Royal Institution of Chartered Surveyors' valuation guidelines and IFRS 13. The directors have assessed the fair value at 31 December 2022 to be the same as at 31 December 2020.
8
Creditors: amounts falling due within one year
2022
2021
£
£
Amounts owed to group undertakings
636,243
636,243
Amounts owed to group undertakings are repayable on demand and are interest free.
9
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
190,747
189,459
2022
Movements in the year:
£
Liability at 1 January 2022
189,459
Charge to profit or loss
1,288
Liability at 31 December 2022
190,747
SCM Bobbin Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 17
10
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share of £1 each
1
1
1
1
11
Ultimate controlling party
The immediate parent company is SCM Property Holdings Limited, a company registered in Scotland.
The ultimate parent company undertaking and controlling party is Highland Fuels (Investments) Limited, a company registered in Scotland.
The ultimate controlling party is G M M Shand.
Highland Fuels Limited is the parent undertaking of the smallest group, of which SCM Boddin Limited is a member, and for which group the financial statements are drawn up.
Highland Fuels (Investments) Limited is the parent undertaking of the largest group, of which SCM Bobbin Limited is a member, and for which group financial statements are drawn up.
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