BILLY_BOWIE_SPECIAL_PROJE - Accounts

The directors present the strategic report for the period ended 31 May 2019.

The group consists of four companies following further share acquisitions in March 2019, resulting in control being gained of The Kilmarnock Football Club Limited.

The four companies in the group, and consolidated in these accounts, are Billy Bowie Special Projects Limited, Bowie Ventures Limited, The Park Hotel Ayrshire Limited and The Kilmarnock Football Club Limited. The Directors' Report details the principal activity of each member of the group.

Billy Bowie Special Projects Limited provides a comprehensive range of services covering tanker hire, wet waste disposal, dry waste disposal, waste sorting and transfer, and the reprocessing of certain waste materials on site. We have additional sites in Widnes, Cheshire and in Leeds, Yorkshire.

The Park Hotel Ayrshire continues to offer a wide range of services to the Kilmarnock and Ayrshire area, covering conferencing facilities and weddings for various numbers of delegates, a high quality restaurant and coffee shop, and accommodation for both leisure and business stays. The hotel offers 50 king-sized rooms and has a four-star rating. The hotel is customer focused and has full disabled access. In addition, the hotel invested in the installation of an electric car charging point in the 2019 year.

The Kilmarnock Football Club Limited are committed to creating a sustainable and competitive football club that competes in the top half of the Scottish Premiership Football League. The club aims to maintain positive bank funding and is continuing efforts to deliver homegrown players.

The principal risks facing Billy Bowie Special Projects Limited include new competitors entering our market, the possibility of changes in the regulatory environment rendering equipment obsolete or inefficient and compliance with Health & Safety, Environmental and Employment regulations, by both us and our customers.

These areas of risk are discussed during our management review meetings and our staff operation meetings and they are monitored and reported on by various consultants working on behalf of the company. We have continued to invest in both people and systems to ensure we operate to the highest standards and thereby reduce risk to them and our customers.

The principal risk facing the hotel is competition in the market. The success of the Blues Restaurant is encouraging, however there is competition in the hotel, coffee shop and restaurant markets. The conferencing facilities available at The Park Hotel are largely unrivalled in the local area, and therefore this is a significant asset for the hotel. The hotel is also exposed to the risk of a downturn in the local economy and increasing costs of food, beverages and utilities.

The principal risks facing the football club are the operation of the player transfer market and player wages demands and the risk of player injuries.

• Interruption to operations due to the closure of The Park Hotel and suspension of football activities for The Kilmarnock Football Club;

• Interruption to operations in Billy Bowie Special Projects, due to an absence of staff for a period of time due to either contracting the virus or measures taken to contain an outbreak at our sites;

• A fall in revenue and decreased cash flow due to lower general economic activity throughout the UK.

On behalf of the board

The directors present their annual report and financial statements for the period ended 31 May 2019.

The company primarily operates in the waste management sector. The subsidiary companies have principal activities as follows:

The Park Hotel Ayrshire Limited        Provision of hotel and banqueting services

Bowie Ventures Limited            Holding company

The Kilmarnock Football Club Limited    Promotion of football in Scotland, with related and ancillary                         services

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

The results for the period are set out on page 10.

Ordinary dividends were paid amounting to £600,000. The directors do not recommend payment of a further dividend.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The group's policy is to consult and discuss with employees, on a regular basis, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Details regarding subsequent events can be found in the notes to the financial statements.

The auditor, Campbell Dallas Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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 auditor of the company 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 auditor of the company 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 group and company, and of the profit or loss of the group 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;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Billy Bowie Special Projects Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 May 2019 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 FRS 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 group's and the parent company's affairs as at 31 May 2019 and of the group's profit for the period 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.

Emphasis of matter - risks and uncertainties relating to COVID-19 pandemic

We draw attention to Note 1.3 of the financial statements, which details the risks and uncertainties arising from the COVID-19 pandemic. Our opinion is not modified with respect to this matter.

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 group's or the parent 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 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.

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 our audit:

• the information given in the strategic report and the directors' report for the financial period 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company 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 group's and the parent 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 group or the parent 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the period was £2,615,722 (2018 - £2,808,192 profit).

Billy Bowie Special Projects Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The company is limited by shares. The registered office is Moorfield Industrial Estate, Kilmarnock, Ayrshire KA2 0BA.

The group consists of Billy Bowie Special Projects Limited and all of its subsidiaries.

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.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated financial statements incorporate those of Billy Bowie Special Projects Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 May 2019. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The Kilmarnock Football Club Limited has been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of The Kilmarnock Football Club Limited for the 2 month period from its acquisition in March 2019. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.

The group profit and loss account and statement of cash flows also include the results and cash flows of The Park Hotel Ayrshire Limited and Bowie Ventures Limited. Both of these companies were also subsidiaries at the 2018 year end and were therefore also consolidated in the prior period accounts.

Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates. In the group financial statements, associates are accounted for using the equity method.

The Kilmarnock Football Club Limited was previously an associate and therefore for 10 months of the period, to the date of the purchase of further shares on 15 March 2019, has been accounted for using the equity method.

The directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the group will continue in business. In satisfaction of this responsibility, the directors have considered the group’s ability to meet its liabilities as they fall due.

The group meets its day to day working capital requirements through invoice and asset financing, bank loans and related party funding. Management information tools including budgets and cash flow forecasts are used to monitor and manage current and future liquidity.

The group also pays special attention to the recent COVID-19 outbreak and the associated impact on the business, which is detailed within Risks and Uncertainties in the Strategic Report. These risks include:

• Interruption to operations due to the closure of The Park Hotel and suspension of football activities for The Kilmarnock Football Club;

• Interruption to operations in Billy Bowie Special Projects, due to an absence of staff for a period of time due to either contracting the virus or measures taken to contain an outbreak at our sites;

• A fall in revenue and decreased cash flow due to lower general economic activity throughout the UK.

Subsequent to the year end, the Park Hotel and The Kilmarnock Football Club have temporarily ceased operations as a result of the pandemic. However, at the date of signing, Billy Bowie Special Projects has not experienced a significant change to business demand and the company continues to operate as usual, with waste management being considered an essential service. However, the directors acknowledge demand could change suddenly depending on how the situation evolves and whether there are further interruptions to the business and staffing.

The current and future financial position of the group, its cash flows and liquidity position have been reviewed by the directors specifically in respect of the above.

Billy Bowie Special Projects is not anticipating any requirement for external funding and is in a strong cash position. As an essential service provider, future trading is not expected to be materially impacted by COVID-19 and therefore no going concern issues are anticipated.

Consequently, Billy Bowie Special Projects has confirmed that it will not demand repayment of its inter-group loans or interest until such time that the group companies have the ability and funds available to repay. Furthermore, it has confirmed that it will provide financial assistance should any of the group companies experience cash flow difficulties as a result of the COVID-19 pandemic.

Although it is not possible to reliably estimate the length or severity of this outbreak, at the date of signing, the directors are confident that the existing funding facilities and support available will provide sufficient headroom to meet the forecast cash requirements of the business having considered additional requirements from a downturn in activity specifically as a consequence of the COVID-19 pandemic.

Following the purchase of further shares in The Kilmarnock Football Club Limited, this company has become a subsidiary of Billy Bowie Special Projects Limited. Therefore, Billy Bowie Special Projects Limited has extended its period end to 31 May 2019 in order to enable the consolidation of this new subsidiary. These accounts provide the results for the 13 month period to 31 May 2019, and therefore comparative amounts included are not entirely comparable for this reason.

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.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, 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.

Revenue is recognised as earned when, and to the extent that, the group obtains the right to consideration in exchange for its services. It is measured at fair value of the consideration received or receivable.

Gate and other match day revenues are recognised over the period of the football season as games are played. Sponsorship and similar commercial income is recognised over the duration of the respective contracts. Broadcasting revenues are recognised over the duration of the football season.

Goodwill represents the excess of the cost of acquisition of a business 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.

Where the cost of the business combination exceeds the fair value of the group’s interest in the assets, liabilities and contingent liabilities acquired, negative goodwill arises. The group, after consideration of the assets, liabilities and contingent liabilities acquired and the cost of the combination, recognises negative goodwill on the balance sheet and releases this to profit and loss, up to the fair value of non-monetary assets.

Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years. A large proportion of the negative goodwill held relates to a fair value adjustment, and this proportion is therefore being written off over the intangible asset's useful economic life. The remainder is being written off over 5 years.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably.

Amortisation 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:

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 recognised in the profit and loss account.

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. Changes in fair value are recognised in profit or loss.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

At each reporting period end date, the group 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.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell, after making due allowance for obsolete and slow moving items.

Cost is based on the cost of purchase on a first in, first out basis.

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 group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and 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 assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 group 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 liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group 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 group.

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 group’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 if, and only if, there is 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.

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

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 leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

In the application of the group’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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

As part of the business combination in the period, the fair values of all of the assets and liabilities of The Kilmarnock Football Club Limited were estimated. See Note 29 for more information on the fair values.

All items were deemed to have a fair value the same as the book value, other than the Stadium which had been revalued in 2018 (see Note 13) and Player Contracts which had not been included in the financial statements previously. The fair value of these contracts was calculated based on contractual terms.

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

Their aggregate remuneration comprised:

The number of directors to whom retirement benefits were accruing under money purchase schemes was 3 (2018: 3).

Investment income includes the following:

The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:

Please refer to Note 29 for further details of the acquisition of intangible assets.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

The Kilmarnock Football Club Limited's stadium, included in Land and Buildings, was independently revalued at 23 February 2018 by Graham & Sibbald, Chartered Surveyors. This valuation was performed on a depreciated replacement cost basis. This was in accordance with both the RICS Appraisal and Valuation Standard and the provisions of FRS 102 relating to specialised properties, to a value of £9,550,000. The directors are of the opinion that this reflects the value, on this basis, at 31 May 2019.

If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:

Investment property comprises a property owned and rented out to companies in the group. The fair value of the investment property has been arrived at as the amount paid for the property, as the purchase was in April 2019 and no significant movements to fair value are deemed to have occurred between the purchase date and the period end date.

Please refer to Note 29 for further details of the acquisition in the period.

Bowie Ventures Limited is exempt from the requirements of the Companies Act 2006 relating to the audit of its individual accounts by virtue of section 479A.

Billy Bowie Special Projects Limited, Bowie Ventures Limited and The Kilmarnock Football Club Limited have a reporting date of 31 May 2019. The Park Hotel Ayrshire Limited has a reporting date of 30 April 2019.

In March 2019 the company acquired control of The Kilmarnock Football Club Limited through the acquisition of 34.54% of the share capital taking the company's overall direct and indirect shareholding to 56.25%. The Kilmarnock Football Club Limited ceased to be an associate on this date. The value of the group's investment was disposed of as consideration for the acquisition.

HSBC UK Bank plc holds a Contract Monies charge and a floating charge over all of the assets of Billy Bowie Special Projects Limited.

The long-term loans are secured by a floating charge over all of the assets of The Park Hotel Ayrshire Limited. This charge is held by HSBC UK Bank plc.

A fixed rate loan was drawn down in the period and is repayable by monthly instalments over the loan term of 5 years. The interest rate on this loan is 3.87% per annum and the balance owed at the period end was £548,007.

A floating rate loan was drawn down in the period and is repayable by monthly instalments over the loan term of 5 years. The interest rate on this loan is 2.75% per annum over the Base Rate and the balance owed at the period end was £247,783.

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The deferred tax liability set out above is expected to reverse within 4 years and relates to accelerated capital allowances that are expected to mature within the same period.

A grant of £44,334 was received in the year for the installation and commission of an electric vehicle charging point. This grant has been deferred and is being released based on the depreciation rate for the assets the grant relates to. The amount recognised as income in the 2019 period is £5,911.

A grant was received to support the construction of the new stadium at Kilmarnock Football Club. This is being released in line with the depreciation being charged on the Stadium, at a rate of 2% per annum. £56,868 was released and recognised as government grant income in the period. The amount included in Deferred income relating to this grant is £1,241,779.

Billy Bowie Special Projects Limited receives grants from the European Social Fund to contribute towards the wages of certain employees. This is to encourage employment and there are no additional conditions which need to be met to receive the grants. The amount received in the period was £3,993.

No other forms of government assistance have been received.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

The company has one class of shares which carry no right to fixed income.

On 15 March 2019 the group acquired an additional 34.54% of the share capital of The Kilmarnock Football Club Limited, taking the group's shareholding to 56.25%.

The group is subject to an ongoing enquiry by HMRC. The matters under review are subjective in nature and negotiations with HMRC are ongoing. It is not possible at this stage to quantify with reasonable certainty the ultimate outcome of negotiations.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Amounts contracted for but not provided in the financial statements:

Subsequent to the period end, a global pandemic was declared for the COVID-19 virus. Details of the impact of this on the group are included in the Strategic Report and Note 1.3 to the financial statements.

The remuneration of key management personnel is as follows.

During the period the group entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

A guarantee has been given by Billy Bowie Special Projects Limited for Bowie Ventures Limited in accordance with Section 479C of the Companies Act 2006 - audit exemption for a subsidiary company.

The exemption under FRS 102.33.1A has been taken, thereby meaning that disclosures need not be given of transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

Dividends totalling £600,000 (2018 - £600,000) were paid in the period in respect of shares held by the company's directors.

The Director's Current Account is unsecured, interest free and has no set repayment terms. At the 31 May 2019, the balance below is included in Other Creditors (2018: Other Debtors).

Included in the Amounts repaid is £96,000 (2018: £96,000) paid to Mr W Bowie in respect of rent for the use of the sites at Moorfield Industrial Estate and East Pokelly.

The controlling party is Mr W D Bowie.