McDonald Scaffolding (Services) Limited - Limited company accounts 18.2

REGISTERED NUMBER: SC094717 (Scotland)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 NOVEMBER 2018

FOR

MCDONALD SCAFFOLDING (SERVICES) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Statement of Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Notes to the Financial Statements

9

DIRECTORS:

M McDonald

J C Cameron

SECRETARY:

J C Cameron

REGISTERED OFFICE:

Rosskeen Old Manse

Invergordon

Ross-shire

IV18 0PL

REGISTERED NUMBER:

SC094717 (Scotland)

SENIOR STATUTORY AUDITOR:

Calum Macdonald

AUDITORS:

CIB Audit

Statutory Auditor

63 Kenneth Street

Stornoway

Isle of Lewis

HS1 2DS

BANKERS:

Bank of Scotland

9 High Street

Inverness

IV1 1JB

SOLICITORS:

Ledingham Chalmers

Kintail House

Beechwood Business Park

Inverness

IV2 3BW

The directors present their strategic report for the year ended 30 November 2018.

REVIEW OF BUSINESS

The trading results for the period, the financial position of the company and the transfer to reserves are shown in the

annexed financial statements.

Overview of performance in year

Turnover continued at a similar level to the previous year with activity levels stabilising after the reductions experienced

during previous years. Turnover for the year was £7,766,604 and the company's loss before taxation is £406,116.

Financial Key Performance Indicators

The company is a financially focused business, which monitors performance using a range of measures.

KPI

Aim

2018

2017

Gross Profit

Maintain and strengthen margin

4.6%

6.3%

Net Profit before tax

Achieve gradual improvement

-

-

Capital Expenditure

Reinvest retained profits

£318K

£491K

Future Developments

The future prospects for the company remain strong based on the forecast upturn in levels of activity in the sectors in

which it operates.

PRINCIPAL RISKS AND UNCERTAINTIES

Although there has been a downturn in the levels of activity experienced in the oil and gas sector during the past three

years, the prospects for the coming year remain encouraging. The company has been successful in increasing the work

secured in other areas and in developing new activity streams which are generating income. The company has

substantial assets, strong liquidity and low fixed cost base, ensuring it has the resources and structural flexibility to

successfully manage the downturn in oil and gas related activity.

ON BEHALF OF THE BOARD:

J C Cameron - Secretary

13 August 2019

The directors present their report with the financial statements of the company for the year ended 30 November 2018.

DIVIDENDS

The total distribution of dividends for the year ended 30 November 2018 will be £70,000 (2017 - £135,000).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 December 2017 to the date of this

report.

M McDonald

J C Cameron

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen in accordance with s.414C(11) of the Companies Act 2006 to set out in the company's strategic

report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and

Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of review of the business,

future developments and Key Performance Indicators.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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.

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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have

taken as a director in order to make himself aware of any relevant audit information and to establish that the company's

auditors are aware of that information.

AUDITORS

The auditors, CIB Audit, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J C Cameron - Secretary

13 August 2019

Opinion

We have audited the financial statements of McDonald Scaffolding (Services) Limited (the 'company') for the year ended

30 November 2018 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in

Equity and Notes to the Financial Statements, including a summary of 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 30 November 2018 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.

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 Auditors' 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

statements or a material misstatement of the other information. 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 Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have 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 Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where 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 Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' 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 a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Calum Macdonald (Senior Statutory Auditor)

for and on behalf of CIB Audit

Statutory Auditor

63 Kenneth Street

Stornoway

Isle of Lewis

HS1 2DS

13 August 2019

9,891,620

TURNOVER

4

7,766,604

9,258,542

Cost of sales

7,405,499

633,078

GROSS PROFIT

361,105

827,583

Administrative expenses

765,781

(194,505

)

OPERATING LOSS

6

(404,676

)

1,477

Interest payable and similar expenses

7

1,440

(195,982

)

LOSS BEFORE TAXATION

(406,116

)

(10,010

)

Tax on loss

8

(40,608

)

(185,972

)

LOSS FOR THE FINANCIAL YEAR

(365,508

)

-

OTHER COMPREHENSIVE INCOME

-

(185,972

)

TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(365,508

)

FIXED ASSETS

2,159,602

Tangible assets

10

2,099,338

CURRENT ASSETS

43,780

Stocks

11

28,980

3,703,799

Debtors

12

3,409,422

62,048

Cash at bank and in hand

22,560

3,809,627

3,460,962

CREDITORS

798,488

Amounts falling due within one year

13

816,487

3,011,139

NET CURRENT ASSETS

2,644,475

5,170,741

TOTAL ASSETS LESS CURRENT LIABILITIES

4,743,813

CREDITORS

(32,105

)

Amounts falling due after more than one year

14

(16,512

)

(181,911

)

PROVISIONS FOR LIABILITIES

16

(206,084

)

4,956,725

NET ASSETS

4,521,217

CAPITAL AND RESERVES

58,336

Called up share capital

17

58,336

4,898,389

Retained earnings

18

4,462,881

4,956,725

SHAREHOLDERS' FUNDS

4,521,217

The financial statements were approved by the Board of Directors on 13 August 2019 and were signed on its behalf by:

M McDonald - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 December 2016

58,336

5,219,361

5,277,697

Changes in equity

Dividends

-

(135,000

)

(135,000

)

Total comprehensive loss

-

(185,972

)

(185,972

)

Balance at 30 November 2017

58,336

4,898,389

4,956,725

Changes in equity

Dividends

-

(70,000

)

(70,000

)

Total comprehensive loss

-

(365,508

)

(365,508

)

Balance at 30 November 2018

58,336

4,462,881

4,521,217

1.	STATUTORY INFORMATION

McDonald Scaffolding (Services) Limited is a private company, limited by shares , registered in Scotland. The

company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention.

Going concern

The directors consider that there are no material uncertainties about the company's ability to continue as a going

concern.

Significant judgements and estimates

The directors also consider that there are no significant areas of judgements, estimates or key assumptions that

affect the items in the accounts.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements,

as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party

transactions with wholly owned subsidiaries within the group.

Turnover

Turnover represents sales of goods, excluding value added tax, and includes the erection and hire of scaffolding,

painting and decorating services and haulage. Turnover is recognised when the risks and rewards associated

with ownership have transferred to the purchaser.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery

-

33% on reducing balance, 25% on reducing balance and at variable rates on reducing balance

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow

moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive

Income, except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws

that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal

of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

Grants

Grants of a revenue nature are taken to the profit and loss account in the year in which the related expenditure is

undertaken. Grants received which are related to capital expenditure are capitalised in the balance sheet under

creditors and are released to the profit and loss account on the same basis as the related capital expenditure is

depreciated.

Invoice factoring

The company assigns a proportion of its trade debts. The accounting policy is to include trade debt within trade

debtors due within one year and record cash advances within creditors due within one year. Factoring fees and

interest are charged to the profit and loss account when incurred. Bad debts are borne by the company and

charged to the profit and loss account when incurred.

Hire purchase and leasing commitments

Assets held under finance leases and hire purchase contracts are recognised in the balance sheet as assets and

liabilities at the fair value of the assets. Lease payments are apportioned between interest and capital using the

effective interest rate method. Finance charges are allocated to each period so as to produce a constant rate of

interest on the remaining balance of the liability.

4.

TURNOVER

The turnover and loss before taxation are attributable to the principal activities of the company.

An analysis of turnover by class of business is given below:

30.11.18

30.11.17

£

£

Erection & hire of scaffolding

5,673,204

8,095,947

Painting & decorating services

486,570

435,276

Haulage

1,606,830

1,360,397

7,766,604

9,891,620

An analysis of turnover by geographical market is given below:

30.11.18

30.11.17

£

£

United Kingdom

7,766,604

9,891,620

7,766,604

9,891,620

5.	EMPLOYEES AND DIRECTORS

30.11.18

30.11.17

£

£

Wages and salaries

4,553,798

5,878,625

Social security costs

498,957

601,399

Other pension costs

125,485

177,895

5,178,240

6,657,919

The average number of employees during the year was as follows:

30.11.18

30.11.17

Production

83

110

Management and administration

10

10

93

120

30.11.18

30.11.17

£

£

Directors' remuneration

176,246

146,525

Directors' pension contributions to money purchase schemes

12,000

32,000

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

2

6.	OPERATING LOSS

The operating loss is stated after charging:

30.11.18

30.11.17

£

£

Depreciation - owned assets

306,077

436,570

Loss on disposal of fixed assets

7,844

19,444

Auditors' remuneration

5,250

6,000

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

30.11.18

30.11.17

£

£

Hire purchase

1,440

1,477

8.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

30.11.18

30.11.17

£

£

Current tax:

UK corporation tax

(64,781

)

-

Deferred tax

24,173

(10,010

)

Tax on loss

(40,608

)

(10,010

)

Reconciliation of total tax credit included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is

explained below:

30.11.18

30.11.17

£

£

Loss before tax

(406,116

)

(195,982

)

Loss multiplied by the standard rate of corporation tax in the UK of 19% (2017 - 19%)

(77,162

)

(37,237

)

Effects of:

Expenses not deductible for tax purposes

-

267

Capital allowances in excess of depreciation

(9,422

)

-

Depreciation in excess of capital allowances

-

12,994

Losses utilised as group relief

28,765

23,696

Reserach & development tax credits

(64,781

)

-

Adjustment to deferred tax for current year

24,173

(10,010

)

Losses carried forward

57,819

280

Total tax credit

(40,608

)

(10,010

)

9.

DIVIDENDS

30.11.18

30.11.17

£

£

Ordinary shares of £1 each

Interim

70,000

135,000

10.	TANGIBLE FIXED ASSETS

Plant and

Totals

Buildings

machinery

£

£

£

COST

At 1 December 2017

5,887,865

372,903

5,514,962

Additions

318,340

-

318,340

Disposals

(141,844

)

-

(141,844

)

At 30 November 2018

6,064,361

372,903

5,691,458

DEPRECIATION

At 1 December 2017

3,728,263

25,468

3,702,795

Charge for year

306,077

17,372

288,705

Eliminated on disposal

(69,317

)

-

(69,317

)

At 30 November 2018

3,965,023

42,840

3,922,183

NET BOOK VALUE

At 30 November 2018

2,099,338

330,063

1,769,275

At 30 November 2017

2,159,602

347,435

1,812,167

11.

STOCKS

30.11.18

30.11.17

£

£

Raw materials and consumables

28,980

43,780

12.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

30.11.18

30.11.17

£

£

Trade debtors

1,640,980

2,085,206

Amounts owed by group undertakings

405,000

405,000

Other debtors

31,834

32,608

Factoring company debtor

1,196,153

1,110,338

Tax

64,781

-

Prepayments and accrued income

70,674

70,647

3,409,422

3,703,799

Trade debtors include sales invoices totalling £1,171,172 (2017 - £1,148,839) which have been assigned under

the factoring arrangements.

A bond and floating charge has been granted in favour of the factoring company over the company's assets and

undertakings for all sums due to the factoring company in terms of the factoring agreement. There are no sums

due to the factoring company at the end of the financial year (2017 - £nil).