AC_COMMERCIAL_(SCOTLAND)_ - Accounts

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 March 2019 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.

The 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.

AC Commercial (Scotland) Limited is a private company limited by shares incorporated in Scotland. The registered office is 7-9 Bon Accord Crescent, Aberdeen, AB11 6DN.

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 amounts 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.

At 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. Although the company has net current liabilities of £207,163, the timing of future rental income during the next twelve months will result in cash being available to meet the debt servicing requirements. The directors loans in other creditors will only be repaid if working capital permits.

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.

Investment property, which is property held to earn rentals and/or for capital appreciation, 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. Investment property is carried at fair value determined annually by the external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in the Statement of comprehensive income.

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 only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like 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.

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.

Finance costs

Finance costs are charged to the Statement of comprehensive income over the term of the debt

using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

The fair value of the investment property has been arrived at on the basis of a valuation carried out by FG Burnett Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

Secured loans

The bank loan is secured on the following terms:

1) A Standard Security over the investment properties.

2) A Bond and Floating Charge over the company's assets and undertakings.

During the year, the company repaid £32,146 to the directors which resulted in a balance due by the company of £104,846 (2018 - £136,992).

During the year, the company repaid £12,854 to the shareholders which resulted in a balance due by the company of £41,926 (2018 - £54,780).

A partnership with common control has granted a security of £2,000,000 to Royal Bank of Scotland plc in connection with AC Commercial (Scotland) Limited borrowings with the bank. A Rental Shortfall Guarantee to the bank has also been granted for £100,000.

The company provided a loan to another partnership with common control. The balance outstanding at the year end was £4,546 due by the company (2018 - £345,581 due to the company). The loan represents a 25% share of a loan provided by the Royal Bank of Scotland PLC in the name of AC Commercial (Scotland) Limited, which under the terms of the loan agreement stipulates that the funds be utilised to refinance existing bank borrowings in the partnership with common control. The loan by AC Commercial (Scotland) Limited is unsecured and both interest and capital repayments represent 25% of the payments incurred by AC Commercial (Scotland) Limited. Interest chargeable on this loan during the year amounted to £11,887 (2018 - £10,503).