Raeburn Drilling Ltd - Limited company accounts 20.1

REGISTERED NUMBER: SC094320 (Scotland)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2021

FOR

RAEBURN DRILLING & GEOTECHNICAL

LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTORS:

J M Raeburn

D G Raeburn

J S Raeburn

S H Raeburn

Miss A M Baxter

SECRETARY:

J M Raeburn

REGISTERED OFFICE:

East Avenue

Priestfield Industrial Estate

Blantyre

Glasgow

G62 0JB

REGISTERED NUMBER:

SC094320 (Scotland)

SENIOR STATUTORY AUDITOR:

Douglas Paton BSc CA

AUDITORS:

Bannerman Johnstone Maclay

Chartered Accountants

and Statutory Auditor

213 St Vincent Street

Glasgow

G2 5QY

BANKERS:

Bank of Scotland

PO Box 18

41 Princes Mall

East Kilbride

Glasgow

G74 1LA

The directors present their strategic report for the year ended 31 March 2021.

The principal activity of the company in the year under review was that of the provision of drilling services, site investigation and also includes soils laboratory testing and reporting.

REVIEW OF BUSINESS

Results for the year were impacted greatly by the COVID-19 pandemic, as evidenced by the decrease in turnover and increase in loss made. During the first quarter of the year, there was virtually no trading activity. On resumption, measures were taken to mitigate the effects of the virus, with the focus being on protecting the health and safety of our staff, customers, and suppliers. This resulted in significant increases in operating costs. The directors remain confident that the company is well positioned to take advantages of opportunities that may arise to expand the business in the future.

To minimise further financial impact, support offered by Government was taken advantage of, where possible.

PRINCIPAL RISKS AND UNCERTAINTIES

During the forthcoming year the board consider the principal risks and uncertainties affecting the company to be:

-Competition in the market

-Managing the impact of the COVID-19 pandemic on our suppliers and customers

Having considered the risks to the business, the board are of the opinion that the company can respond to and mitigate the impact of these risks and uncertainties.

KEY PERFORMANCE INDICATORS

Given the straightforward nature of the business of the company, the directors are of the opinion that analysis using key performance indicators is not necessary for an understanding of the development, performance or position of the business.

ON BEHALF OF THE BOARD:

J M Raeburn - Director

22 December 2021

The directors present their report with the financial statements of the company for the year ended 31 March 2021.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2021.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2020 to the date of this report.

J M Raeburn

D G Raeburn

J S Raeburn

S H Raeburn

Miss A M Baxter

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen in accordance with Companies Act 2006, s. 414C(11) 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 subsequent events, price, credit and liquidity risk.

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). 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 or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Bannerman Johnstone Maclay, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J M Raeburn - Director

22 December 2021

Opinion

We have audited the financial statements of Raeburn Drilling & Geotechnical Limited (the 'company') for the year ended 31 March 2021 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 31 March 2021 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

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.

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 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

-

We obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in which it operates. We determined that the following laws and regulations were the most significant: the Companies Act 2006 and UK corporate taxation laws.

-

We obtained an understanding of how the company is complying with those legal and regulatory frameworks by making enquires to the management.

-

We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:

-

identifying and assessing the design and effectiveness of controls management has in place to prevent and detect fraud;

-

understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;

-

challenging assumptions and judgements made by management in its significant accounting estimates;

-

identifying and testing journal entries, in particular any journal entries posted with unusual accounting combinations; and

-

assessing the extent of compliance with relevant laws and regulations.

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.

Douglas Paton BSc CA (Senior Statutory Auditor)

for and on behalf of Bannerman Johnstone Maclay

Chartered Accountants

and Statutory Auditor

213 St Vincent Street

Glasgow

G2 5QY

22 December 2021

TURNOVER

7,036,895

12,365,233

Cost of sales

6,264,510

9,772,762

GROSS PROFIT

772,385

2,592,471

Administrative expenses

2,210,687

2,297,647

(1,438,302

)

294,824

Other operating income

746,042

96,000

OPERATING (LOSS)/PROFIT

5

(692,260

)

390,824

Amounts written off intercompany balances

6

-

750,000

(692,260

)

(359,176

)

Income from shares in group undertakings

12,500

35,000

Interest receivable and similar income

36

1,364

12,536

36,364

(679,724

)

(322,812

)

Interest payable and similar expenses

7

9,937

16,358

LOSS BEFORE TAXATION

(689,661

)

(339,170

)

Tax on loss

8

1,495

24,409

LOSS FOR THE FINANCIAL YEAR

(691,156

)

(363,579

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(691,156

)

(363,579

)

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

2,553,840

2,332,034

Investments

11

1,040,705

1,040,705

3,594,545

3,372,739

CURRENT ASSETS

Stocks

12

1,796,149

1,658,257

Debtors

13

2,327,331

3,949,372

Cash at bank and in hand

927,210

229,429

5,050,690

5,837,058

CREDITORS

Amounts falling due within one year

14

5,959,677

5,990,955

NET CURRENT LIABILITIES

(908,987

)

(153,897

)

TOTAL ASSETS LESS CURRENT LIABILITIES

2,685,558

3,218,842

CREDITORS

Amounts falling due after more than one year

15

(80,955

)

(119,190

)

PROVISIONS FOR LIABILITIES

17

(196,107

)

-

NET ASSETS

2,408,496

3,099,652

CAPITAL AND RESERVES

Called up share capital

18

4,200,000

4,200,000

Share premium

19

70,000

70,000

Retained earnings

19

(1,861,504

)

(1,170,348

)

SHAREHOLDERS' FUNDS

2,408,496

3,099,652

The financial statements were approved by the Board of Directors and authorised for issue on 22 December 2021 and were signed on its behalf by:

J M Raeburn - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 April 2019

4,200,000

(806,769

)

70,000

3,463,231

Changes in equity

Total comprehensive income

-

(363,579

)

-

(363,579

)

Balance at 31 March 2020

4,200,000

(1,170,348

)

70,000

3,099,652

Changes in equity

Total comprehensive income

-

(691,156

)

-

(691,156

)

Balance at 31 March 2021

4,200,000

(1,861,504

)

70,000

2,408,496

1.	STATUTORY INFORMATION

Raeburn Drilling & Geotechnical 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.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

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.

Preparation of consolidated financial statements

The financial statements contain information about Raeburn Drilling & Geotechnical Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its parent, Raeburn Brick Limited, East Avenue, Priestfield Industrial Estate, Blantyre, Glasgow, G72 0JB.

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 is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. Where the outcome cannot be estimated reliably, turnover is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Goodwill

Goodwill is the difference between the amount paid on the acquisition of a business and the aggregate fair value of its separate net assets. Goodwill has been written off on a straight line basis over its estimated useful economic life, currently assessed as 4 years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

-

10-25% on cost

Motor vehicles

-

10-25% on cost

Government grants

Government grants relate to amounts received under the Coronavirus Job Retention Scheme.

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

Financial instruments

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

Financial assets and liabilities are offset, with 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

Basic financial assets, which include certain debtors and cash and bank balances, are initially measured at transaction price including transactions 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.

Classification of financial liabilities

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 company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including certain creditors and loans from related undertakings, 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.

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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

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.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Balance sheet date and the amounts reported during the year for revenue and costs. However the nature of estimation means that actual outcomes could differ from those estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the useful economic lives and residual values of the assets. Useful lives and residual values are reassessed annually. They are assessed where necessary to reflect current estimates based on economic utilisation and physical condition.

Stock provisioning

It is necessary to consider the recoverability of the cost of stock and the associated provisioning required given the changes in prices and market trends. When calculating the stock provision, management considers the nature and condition of the stock as well as applying assumptions around anticipated net realisable value.

Impairment of trade and other debtors

The Company regularly reviews the recoverability of trade and other debtors. A provision for impairment is made where the Company believes that it will not be able to collect amounts due according to the original terms of trade. Provisions for impairment are estimates of future events and are therefore uncertain.

Long term contracts

The stage of completion of contracts in progress at the year-end has been estimated in line with the value of work completed to date as a proportion of the total expected value of that contract.

The expected gross margin for a contract has been used in order to determine the value of any provision for purchases or work in progress for that contract. This is based upon the difference between the expected costs to date and the value of costs received to date.

4.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

3,151,244

3,487,999

Social security costs

327,512

373,498

Other pension costs

80,436

86,550

3,559,192

3,948,047

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

2021

2020

Management and administration

23

24

Drilling and technical

71

69

94

93

2021

2020

£

£

Directors' remuneration

276,547

240,930

Directors' pension contributions to money purchase schemes

13,848

13,267

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

Money purchase schemes

3

3

Information regarding the highest paid director is as follows:

2021

2020

£

£

Emoluments etc

99,354

87,835

Pension contributions to money purchase schemes

8,216

5,447

5.	OPERATING (LOSS)/PROFIT

The operating loss (2020 - operating profit) is stated after charging/(crediting):

2021

2020

£

£

Hire of plant and machinery

43,340

38,993

Depreciation - owned assets

346,103

237,889

Depreciation - assets on hire purchase contracts

124,267

243,712

Loss/(profit) on disposal of fixed assets

7,611

(2,661

)

Auditors' remuneration

8,650

8,650

6.	EXCEPTIONAL ITEMS

2021

2020

£

£

Amounts written off intercompany balances

-

(750,000

)

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Interest on tax

-

978

Hire purchase

9,937

15,380

9,937

16,358

8.

TAXATION

Analysis of the tax charge

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

2021

2020

£

£

Current tax:

UK corporation tax

-

53,925

CT adjust re previous year

(194,612

)

(29,516

)

Total current tax

(194,612

)

24,409

Deferred tax

196,107

-

Tax on loss

1,495

24,409

Reconciliation of total tax charge 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:

2021

2020

£

£

Loss before tax

(689,661

)

(339,170

)

Loss multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

(131,036

)

(64,442

)

Effects of:

Expenses not deductible for tax purposes

755

145,081

Income not taxable for tax purposes

(2,375

)

(6,650

)

Capital allowances in excess of depreciation

(96,981

)

(19,558

)

Utilisation of tax losses

38,170

-

Adjustments to tax charge in respect of previous periods

(4,591

)

(29,516

)

(Profit)/loss on disposal of assets

1,446

(506

)

Deferred tax

196,107

-

Total tax charge

1,495

24,409

9.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 April 2020

and 31 March 2021

52,000

AMORTISATION

At 1 April 2020

and 31 March 2021

52,000

NET BOOK VALUE

At 31 March 2021

-

At 31 March 2020

-

10.	TANGIBLE FIXED ASSETS

Plant and

Motor

machinery

vehicles

Totals

£

£

£

COST

At 1 April 2020

5,149,051

896,904

6,045,955

Additions

570,528

150,565

721,093

Disposals

(168,048

)

(83,866

)

(251,914

)

At 31 March 2021

5,551,531

963,603

6,515,134

DEPRECIATION

At 1 April 2020

3,211,111

502,810

3,713,921

Charge for year

340,554

129,816

470,370

Eliminated on disposal

(161,652

)

(61,345

)

(222,997

)

At 31 March 2021

3,390,013

571,281

3,961,294

NET BOOK VALUE

At 31 March 2021

2,161,518

392,322

2,553,840

At 31 March 2020

1,937,940

394,094

2,332,034