Company registration number 2563787 (England and Wales)
HILL'S PANEL PRODUCTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
HILL'S PANEL PRODUCTS LIMITED
COMPANY INFORMATION
Directors
S M Hill
M S Hill
R G Mottram
K Wardrope
A Bolton
A L Evans
G Evans
D Mounsey
Secretary
R G Mottram
Company number
2563787
Registered office
Scottfield Road
and business address
Oldham
Lancashire
OL8 1LA
Auditor
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
Bankers
Handelsbanken
1st Floor Sunlight House
Quay Street
Manchester
M3 3JZ
Solicitors
Farleys Solicitors LLP
Unit C1 - Hurstwood Court
Duttons Way
Shadsworth
Blackburn
Lancashire
BB1 2PT
HILL'S PANEL PRODUCTS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 24
HILL'S PANEL PRODUCTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 1 -
The directors present the strategic report and financial statements for the year ended 28 February 2023.
Review of the business
Although on the whole the year was satisfactory, we did experience a slowdown in the last quarter as external economic factors started to take hold. However overall, the year finished well and we overcame some significant challenges. Although product supply was generally improved, in certain areas like maintenance, sourcing of spare parts proved to be very frustrating and affected by significant increases in cost.
We continued to implement our staff re-structuring from 2022, this is a process that is still ongoing with the introduction of new roles within the company such as Assistant Marketing Manager. Finding people for certain key roles has been challenging but the outlook now seems to be settling down in most areas. As a forward-thinking company committed to its staff and their wellbeing it is nice to report that we have had no major issues with staff retention this year, although we realise that the cost of living increased significantly for everyone and we know this is something that will have to be looked at very carefully in the coming year.
For the latter half of this year, we have had to prepare for what we believe will be a challenging year ahead. We are doing this by looking at our systems, how to reduce costs where possible, in areas ranging from energy use to card payment processing fees, while also exploring our market concentration with more external presence.
Overall, we are very happy with how our financial YE2023 has gone and, how the company has performed, aided by the valued contribution made by every member of our team. Our customer base has remained loyal, and as always, we try to do our best for them and their business by offering what we believe to be sustainable solutions and innovative products and tools to assist them and us to be more efficient. We anticipate some challenges ahead but we also believe we are well placed to deal with these challenges, as we have over the last 30 years.
Financial Highlights
The results set out in the profit and loss account show that the turnover for the year ended 28 February 2023 was £35.18 million (2022: £34.58 million). The gross profit margin for the year was 28.87% (2022: 29.54%).
Earnings before exceptional costs, interest, tax, depreciation and amortisation (EBITDA) were £3.89 million (2022: £4.91 million) reflecting continued customer development, performance and cost control.
Description of Principal Risks and Uncertainties
The company has robust systems in place and continues to work flexibly to be able to react to any changes arising as a result of the current global and domestic situations and their continued impact on the United Kingdom economy.
The company does not actively use financial instruments as part of its financial risk management. The company is exposed to the usual credit and cash flow risks associated with selling on credit and manages this through credit control procedures and where possible insures against such risks. The company finances working capital through retained earnings, an invoice discounting facility, an asset based lending facility and a cash flow loan facility.
The financial position of the company at the year end is considered to be strong by the directors.
R G Mottram
Director
27 November 2023
HILL'S PANEL PRODUCTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 2 -
The directors present their annual report and financial statements for the year ended 28 February 2023.
Principal activities
The principal activity of the company continues to be the manufacture of kitchen units, doors and panel products.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £60,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
S M Hill
M S Hill
R G Mottram
K Wardrope
A Bolton
A L Evans
G Evans
D Mounsey
Auditor
In accordance with the company's articles, a resolution proposing that Pierce C.A. Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of disclosure to auditor
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 company’s auditor 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 company’s auditor is aware of that information.
On behalf of the board
R G Mottram
Director
27 November 2023
HILL'S PANEL PRODUCTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 3 -
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 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.
HILL'S PANEL PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HILL'S PANEL PRODUCTS LIMITED
- 4 -
Opinion
We have audited the financial statements of Hill's Panel Products Limited (the 'company') for the year ended 28 February 2023 which comprise the profit and loss account, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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 28 February 2023 and of its profit 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.
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.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:
the information given in the strategic report and the directors' report for the financial year 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.
HILL'S PANEL PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HILL'S PANEL PRODUCTS LIMITED
- 5 -
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 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, 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 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 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 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.
Auditor's 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 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatements in respect of irregularities (including fraud) we considered the following:
The nature of the industry, the company’s control environment, the significant laws and regulations relevant to the company, and the company’s policies on detection of fraud;
Results of our enquiries of management, those charged with governance, and of staff in compliance roles;
Our review of disclosures included in the financial statements; and
Engagement team discussions in respect of any potential indicators of non-compliance or fraud.
We have also performed specific procedures to consider the risk of management override and of fraud arising in significant transactions outside the normal course of business.
We did not identify a material risk of non-compliance with laws and regulations or of fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
HILL'S PANEL PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HILL'S PANEL PRODUCTS LIMITED
- 6 -
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.
Linda Wilkinson (Senior Statutory Auditor)
For and on behalf of Pierce C A Limited
29 November 2023
Statutory Auditor
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
HILL'S PANEL PRODUCTS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 7 -
2023
2022
Notes
£
£
Turnover
2
35,184,761
34,581,346
Cost of sales
(25,027,316)
(24,366,259)
Gross profit
10,157,445
10,215,087
Distribution costs
(1,469,417)
(1,299,086)
Administrative expenses
(5,679,667)
(5,245,301)
Other operating income
46,014
404,219
Operating profit
3
3,054,375
4,074,919
Interest receivable and similar income
6
768
1,728
Interest payable and similar expenses
7
(24,685)
(28,992)
Profit before taxation
3,030,458
4,047,655
Tax on profit
9
(429,628)
(721,882)
Profit for the financial year
2,600,830
3,325,773
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HILL'S PANEL PRODUCTS LIMITED
BALANCE SHEET
AS AT
28 FEBRUARY 2023
28 February 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
5,250,927
4,647,983
Current assets
Stocks
12
4,676,298
4,343,711
Debtors
13
10,365,945
10,876,624
Cash at bank and in hand
320,039
377,332
15,362,282
15,597,667
Creditors: amounts falling due within one year
14
(4,833,968)
(6,101,348)
Net current assets
10,528,314
9,496,319
Total assets less current liabilities
15,779,241
14,144,302
Creditors: amounts falling due after more than one year
15
(2,621,480)
(3,780,251)
Provisions for liabilities
Deferred tax liability
19
718,394
465,514
(718,394)
(465,514)
Net assets
12,439,367
9,898,537
Capital and reserves
Called up share capital
21
125,000
125,000
Share premium account
974,418
974,418
Profit and loss reserves
11,339,949
8,799,119
Total equity
12,439,367
9,898,537
The financial statements were approved by the board of directors and authorised for issue on 27 November 2023 and are signed on its behalf by:
R G Mottram
Director
Company Registration No. 2563787
HILL'S PANEL PRODUCTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 9 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 March 2021
125,000
974,418
10,031,319
11,130,737
Year ended 28 February 2022:
Profit and total comprehensive income for the year
-
-
3,325,773
3,325,773
Dividends
8
-
-
(4,557,973)
(4,557,973)
Balance at 28 February 2022
125,000
974,418
8,799,119
9,898,537
Year ended 28 February 2023:
Profit and total comprehensive income for the year
-
-
2,600,830
2,600,830
Dividends
8
-
-
(60,000)
(60,000)
Balance at 28 February 2023
125,000
974,418
11,339,949
12,439,367
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 10 -
1
Accounting policies
Company information
Hill's Panel Products Limited is a private company limited by shares incorporated in England and Wales. The registered office is Scottfield Road, Oldham, Lancashire, OL8 1LA.
1.1
Accounting convention
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 £1 sterling.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
• Section 7 'Statement of Cash Flows' - Presentation of a statement of cash flow and related notes and disclosures;
• Section 33 'Related Party Disclosures' - Compensation for key management personnel.
Hill's Panel Products Limited is a subsidiary undertaking of Redbeam Limited, a company registered in England and Wales. The ultimate parent company is Scotfield Limited, a company registered in England and Wales. The results for Hill's Panel Products Limited are included in the consolidated financial statements of Scotfield Limited which are available from the registered office.
1.2
Going concern
The company has an invoice discounting facility, an inventory facility, a plant and machinery loan facility and a cash flow loan facility available to finance trading operations and ongoing capital investment. The directors are not aware of any reasons why these facilities will not be maintained.true
As a result the directors have continued to adopt the going concern basis in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), 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.
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Tangible fixed assets
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:
Land and buildings Leasehold
2.5% straight line
Plant and machinery
Between 10% and 33% straight line
Motor vehicles
11% straight line
1.5
Stocks
Stock is valued at the lower of cost and net realisable value on a first in first out (FIFO) basis after making due allowances for obsolete and slow moving stock.
1.6
Cash and cash equivalents
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.
1.7
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 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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 12 -
Impairment of financial assets
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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.
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 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 13 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company 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 company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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
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.
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 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.
1.10
Employee benefits
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.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 14 -
1.12
Leases
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 the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.13
Government grants
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.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.14
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
1.15
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
2
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
From principal activity
35,184,761
34,581,346
2023
2022
£
£
Other revenue
Interest income
768
1,728
RHI and other income
46,506
272,794
Government furlough scheme receipts
-
284,997
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 15 -
3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
25,382
(37,437)
Government furlough scheme receipts
-
(284,997)
Fees payable to the company's auditors for the audit of the company's financial statements
24,000
24,000
Depreciation of owned tangible fixed assets
595,011
600,815
Depreciation of tangible fixed assets held under finance leases
245,827
265,542
Profit on disposal of tangible fixed assets
(3,666)
(193)
Operating lease charges
167,594
141,410
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Office and Management
28
26
Sales
26
24
Manufacturing
140
149
Total
194
199
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,481,564
5,465,921
Social security costs
566,241
468,245
Pension costs
173,640
240,217
6,221,445
6,174,383
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 16 -
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
582,888
615,514
Company pension contributions to defined contribution schemes
28,355
97,509
611,243
713,023
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
99,953
112,037
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
768
241
Other interest income
1,487
Total income
768
1,728
7
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
22,151
28,992
Other interest
2,534
24,685
28,992
8
Dividends
2023
2022
£
£
Interim paid
60,000
4,557,973
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 17 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
176,748
668,063
Deferred tax
Origination and reversal of timing differences
252,880
53,819
Total tax charge
429,628
721,882
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
3,030,458
4,047,655
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
575,787
769,054
Tax effect of expenses that are not deductible in determining taxable profit
6,117
2,827
Group relief
(30,875)
(514)
Permanent capital allowances in excess of depreciation
(30,614)
(6,195)
Depreciation on assets not qualifying for tax allowances
4,458
4,229
Research and development tax credit
(155,239)
(159,205)
Other permanent differences
(697)
(37)
Effect of changes in estimated future tax rates
60,691
111,723
Taxation charge for the year
429,628
721,882
10
Intangible fixed assets
Goodwill
£
Cost
At 1 March 2022 and 28 February 2023
173,860
Amortisation and impairment
At 1 March 2022 and 28 February 2023
173,860
Carrying amount
At 28 February 2023
At 28 February 2022
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 18 -
11
Tangible fixed assets
Land and buildings Leasehold
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 March 2022
915,038
9,700,670
1,611,107
12,226,815
Additions
38,421
1,212,884
199,920
1,451,225
Disposals
(99,165)
(127,100)
(226,265)
At 28 February 2023
953,459
10,814,389
1,683,927
13,451,775
Depreciation and impairment
At 1 March 2022
252,412
6,185,550
1,140,870
7,578,832
Depreciation charged in the year
23,461
687,283
130,094
840,838
Eliminated in respect of disposals
(99,165)
(119,657)
(218,822)
At 28 February 2023
275,873
6,773,668
1,151,307
8,200,848
Carrying amount
At 28 February 2023
677,586
4,040,721
532,620
5,250,927
At 28 February 2022
662,626
3,515,120
470,237
4,647,983
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
1,394,696
1,478,355
Motor vehicles
289,728
269,356
1,684,424
1,747,711
12
Stocks
2023
2022
£
£
Raw materials and consumables
3,425,571
3,157,295
Work in progress
33,004
22,413
Finished goods and goods for resale
1,217,723
1,164,003
4,676,298
4,343,711
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 19 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,924,266
4,309,742
Unpaid share capital
20,287
20,287
Corporation tax recoverable
45,718
Amounts owed by group undertakings
6,046,051
6,046,051
Other debtors
95,549
193,665
Prepayments and accrued income
234,074
306,879
10,365,945
10,876,624
Included within Other debtors are amounts due from a connected company of £45,749 (2022: £188,662)
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Invoice discounting advance
16
98,275
Obligations under finance leases
17
396,526
411,046
Other borrowings
16
909,997
759,537
Trade creditors
2,732,047
2,898,156
Corporation tax
315,442
Other taxation and social security
346,096
450,160
Other creditors
681,406
Accruals and deferred income
351,027
585,601
4,833,968
6,101,348
The company has an invoice discounting facility with Arbuthnot Commercial Asset Based Lending Limited. At the previous balance sheet date the company was owed £56,548. This balance was included in Cash at bank and in hand at 28 February 2022.
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
224,991
404,564
Other borrowings
16
2,396,489
3,375,687
2,621,480
3,780,251
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 20 -
16
Loans and overdrafts
2023
2022
£
£
Invoice discounting advance
98,275
Other borrowings
3,306,486
4,135,224
3,404,761
4,135,224
Payable within one year
1,008,272
759,537
Payable after one year
2,396,489
3,375,687
Other borrowings relate to amounts advanced under an asset based lending facility.
All of the above borrowings are secured by a fixed and floating charge provided over the assets of the company and debentures given over the assets of the following companies by way of a composite guarantee:
Redbeam Limited
Alexlake Limited
HPP Pinnacle Limited
Poolbase Limited
A deed of priority and subordination provides that the floating charges held by the asset based lending facility have priority over the floating charge held by the company's bankers. The floating charges held by the bank have priority over the floating charges held by the holders of the loan note instruments issued in Redbeam Limited.
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 21 -
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
396,274
411,046
In two to five years
225,243
404,564
621,517
815,610
Finance lease payments represent rentals payable by the company 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 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Obligations under finance leases are secured on the assets concerned.
18
Provisions for liabilities
2023
2022
£
£
Deferred tax liabilities
19
718,394
465,514
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
725,397
489,487
Unrelieved pension contributions
(7,003)
(23,973)
718,394
465,514
2023
Movements in the year:
£
Liability at 1 March 2022
465,514
Charge to profit or loss
252,880
Liability at 28 February 2023
718,394
The deferred tax liability set out above is expected to reverse within five years and relates to accelerated capital allowances and unrelieved contributions that are expected to mature within the same period.
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 22 -
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
173,640
240,217
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
125,000 Ordinary shares of £1 each
125,000
125,000
22
Financial commitments, guarantees and contingent liabilities
The company has given a debenture over its assets, together with Alexlake Limited, HPP Pinnacle Limited and Poolbase Limited, by way of a guarantee to the holders of the 8% secured loan notes instruments issued in Redbeam Limited. At the balance sheet date an amount of £11,135,038 (2022: £11,135,038) was outstanding in respect of these loan note instruments.
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
798,506
65,487
Between two and five years
1,174,259
2,066,483
In over five years
222,535
828,813
2,195,300
2,960,783
The company has the option to break certain of the above leases re Units 1, 2 and 11, Scottfield Road, Oldham on 31 May 2024; and Units 3, 4 ,5 ,6, 8 and 9, Scottfield Road, Oldham on 31 May 2025; and Crown Works, Sheffield on 15 September 2027.
24
Events after the reporting date
The company has declared and paid dividends of £2,533,767 in respect of its issued share capital after the balance sheet date.
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 23 -
25
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
400,000
582,690
HILL'S PANEL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 24 -
26
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Rent paid
2023
2022
£
£
Pension scheme in which S M Hill and M S Hill are beneficiaries
217,538
193,250
Entities under common control
467,500
504,520
685,038
697,770
The following amounts were outstanding at the reporting end date:
Amounts owed by related parties
Amounts owed by related parties
2023
2022
Balance
Net
Balance
Net
£
£
£
£
Entities under common control
45,749
45,749
188,662
188,662
45,749
45,749
188,662
188,662
The directors have taken advantage of the exemption available under FRS 102, Section 33.1A, not to disclose transactions with its parent company.
27
Directors' transactions
Included with Other debtors are interest-free loans advanced to the directors by the company amounting to £41,646 (2022: £nil).
Included within Other creditors are interest-free loans advanced by the directors to the company amounting to £nil (2022: £681,406).
28
Ultimate controlling party
The company is a wholly-owned subsidiary of Redbeam Limited, a company registered in England and Wales.
Redbeam Limited is a wholly-owned subsidiary of Scotfield Limited, a company registered in England and Wales.
Scotfield Limited is under the control of M S Hill and S M Hill.
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