SKY_PROPERTIES_(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 30 September 2017 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.

Sky Properties (Scotland) Limited is a private company limited by shares in the United Kingdom, incorporated in Scotland. The registered office is Sky House, Units 1 & 2 Spurryhillock Industrial Estate, Broomhill Road, Stonehaven, AB39 2NH.

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.

These financial statements for the year ended 30 September 2017 are the first financial statements of Sky Properties (Scotland) Limited prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The date of transition to FRS 102 was 1 October 2015. An explanation of how transition to FRS 102 has affected the reported financial position and financial performance is given in note 9.

Turnover represents amounts receivable for the rental of investment property.

Rental income is recognised over the period to which it relates.

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. The surplus or deficit on revaluation is recognised in profit or loss.

Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as tangible fixed assets.

Cash at bank and in hand 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 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, 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 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, 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.

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

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.

Investment property comprises of business units 1 and 2, Spurryhillock Industrial Estate, Broomhill Road, Stonehaven, AB39 2NH. The fair value of the investment property has been arrived at on the basis of a valuation carried out by a Chartered Surveyor as at 31 December 2016, who is 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.

The bank loan is secured by a standard security over the freehold property and a floating charge over the assets of the company.

The company was under the joint control of Ronald Watt and Graham Truscott, directors and equal shareholders, during the current and previous year.

Graham Truscott

Graham Truscott, director and 50% shareholder, directly owns 25% of the share capital of Kincardine Manufacturing Services Limited. During the year the company charged rent of £84,000 (2016 - £84,000) to Kincardine Manufacturing Services Limited, of which £49,000 (2016 - £28,000) remained due at the year end. At the year end, a loan of £50,000 (2016 - £50,000) due to Kincardine Manufacturing Services Limited was included within other creditors falling due within one year. The loan is unsecured, interest free and repayable when the company's financial position permits.

At the year end £2,645 is due to Graham Truscott (2016 - £2,645) and is included within other creditors. This loan is unsecured, interest free and repayable on demand.

Ronald Watt

Ronald Watt, director and 50% shareholder, owns 100% of the share capital of Nexus Surface Treatments Limited. During the year the company charged rent of £84,000 (2016 - £84,000) to Nexus Surface Treatments Limited, of which £nil (2016: £nil) remained due at the year end. At the year end, a loan of £50,000 (2016 - £50,000) due to Nexus Surface Treatments Limited was included within other creditors falling due within one year. The loan is unsecured, interest free and repayable when the company's financial position permits.

Upon transition to FRS 102, the company is required to account for investment properties at fair value, with movements in fair value being reflected in the profit and loss account. Under previous UK Generally Accepted Accounting Practice "UK GAAP", the company accounted for increases in the value of investment properties through the revaluation reserve.

Deferred tax is required to be recognised on timing differences arising from the differences between the tax base of investment properties and their fair value. A transitional adjustment has been made to retained earnings in respect of the deferred tax provision at the transition date. The comparative year's deferred tax provision has been amended accordingly.

By extension, any amounts included in the revaluation reserve at 1 October 2015 (the transition date), which relate to the revaluation of investment properties under previous UK GAAP, should be disclosed as non-distributable retained earnings in line with FRS 102.

The above table illustrates the effect of the change in accounting treatment following the transition to FRS 102.