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REGISTERED NUMBER: 03919214 (England and Wales)















HILLS RESIDENTIAL CONSTRUCTION LTD

STRATEGIC REPORT,

DIRECTORS' REPORT AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2023






HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023










Page

Company Information 1

Strategic Report 2 to 3

Directors' Report 4 to 5

Report of the Independent Auditors 6 to 9

Statement of Comprehensive Income 10

Balance Sheet 11

Statement of Changes in Equity 12

Cash Flow Statement 13

Notes to the Cash Flow Statement 14 to 15

Notes to the Financial Statements 16 to 28


HILLS RESIDENTIAL CONSTRUCTION LTD

COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2023







DIRECTORS: Mr J A Hills
Mrs T A Hills
Mr J R Mann
Mr J E C Cox
Mr P Perfect-Brown
Mr S Williams





SECRETARY: Mr J A Hills





REGISTERED OFFICE: Bridge Mill House
Brook Street
Colchester
Essex
CO1 2UZ





REGISTERED NUMBER: 03919214 (England and Wales)





AUDITORS: Haines Watts
Statutory Auditors
Town Wall House
Balkerne Hill
Colchester
Essex
CO3 3AD

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023


The directors present their strategic report for the year ended 31 December 2023.

PRINCIPAL ACTIVITY
The principal activity of the company continued to be that of property development.

REVIEW OF BUSINESS
During the period under review, the housing market has been negatively impacted by high interest rates, high levels of inflation and political uncertainty. The combined impact of these has resulted in a reduction in consumer confidence, which has been reflected in the weakened demand for properties.

Notwithstanding the reduction in turnover, the directors have continued to pursue a strategy of offering high quality, value for money homes supported by excellent customer service which has helped to maintain gross margins at a satisfactory level.

During the year the company commenced house building at their St James' Place site in East Bergholt alongside the continuing developments at Admirals Green, Great Bentley, and Asterwood, Elmstead Market.

Shareholders funds showed an increase of 4.3% wholly attributable to the profit for the financial year. No dividends were declared in the current year or the previous year.

KEY PERFORMANCE INDICATORS
The key financial performance indicators during the year were as follows -

2023 2022
£ £

Turnover 16,866,932 28,582,661
Profit Before Tax 784,651 4,894,803
Shareholder's Funds 12,552,152 12,002,985


PRINCIPAL RISKS AND UNCERTAINTIES
The company has monthly management meetings during which they evaluate the company's risk appetite. The principal risks and uncertainties facing the group are broadly grouped as - legislative risk, exposure to price, liquidity and cash flow risk and economic risk.

- Legislative risk



Exposure to health and safety regulations. The company is a member of Eastern Builders Safety Group who
regularly inspect sites to ensure compliance with health and safety regulations. The company also holds
regular health and safety committee meetings to ensure current health and safety best practices are
implemented and adhered to.

- Exposure to price and liquidity risk
- Price risk arises on financial instruments because of changes in prices in materials or subcontract labour
prices. Hills Residential Construction Limited mitigate these risks by monitoring requirements to ensure
sufficient supply and by engaging early and working closely with builders merchants and subcontractors.


HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

- Liquidity risk is the risk that the company will encounter difficulties in meeting obligations associated with
financial liabilities. The company aims to mitigate liquidity risk by closely monitoring cash requirements on
a monthly basis and looking for alternative funding opportunities outside of the company's bankers.

- Economic risk centres on macroeconomic circumstances that may result in a significant reduction in
trading activity for the company such as a potential housing market crash. The company manages this by
developing sites in the local area where local knowledge and insight into the market highlights the demand
for certain properties of specific design and price. Each development has a unique blend of houses
containing differing designs and pricing in desirable locations.

FUTURE DEVELOPMENTS
The economic outlook currently shows signs of improvement with interest rates reduced and inflation under control. The political environment promises a return to stability and government policy is explicitly focused on increasing the supply of housing and simplifying the planning process.

With good quality land options, and a well targeted range of houses available to purchasers, the company is in a strong position to take advantage of any upturn in demand.

The company continues to build on the excellent reputation associated with the Hills brand and has built an established and professional team with a proven track record of delivery.

ON BEHALF OF THE BOARD:





Mr J A Hills - Secretary


13 September 2024

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023


The directors present their report with the financial statements of the company for the year ended 31 December 2023.

DIVIDENDS
No dividends will be distributed for the year ended 31 December 2023.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

Mr J A Hills
Mrs T A Hills
Mr J R Mann
Mr J E C Cox
Mr P Perfect-Brown
Mr S Williams

DISCLOSURE IN THE STRATEGIC REPORT
The business review, principal risks and uncertainties and details of financial instruments are located within the Strategic Report in accordance with s.414C(11) CA 2006.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Directors' 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.

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.

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023


AUDITORS
The auditors, Haines Watts, are deemed to be re-appointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:



Mr J A Hills - Secretary


13 September 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HILLS RESIDENTIAL CONSTRUCTION LTD


Opinion
We have audited the financial statements of Hills Residential Construction Ltd (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 December 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.

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 Directors' Report, 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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HILLS RESIDENTIAL CONSTRUCTION LTD


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 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.

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 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 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 four, 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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HILLS RESIDENTIAL CONSTRUCTION LTD


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:

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 the risk of material misstatement in respect of irregularities, including fraud, the
engagement team:

- enquired of management and those charged with governance, about their own identification andassessment
of the risks of irregularities, including any known, actual, suspected or alleged instances offraud;

- discussed instances of non-compliance with laws or regulations an how fraud might occur
includingassessment of how and where the financial statements may be susceptible to fraud;

- incorporated testing of manual journal entries into our audit approach;

- incorporated testing of revenue recognition into our audit approach;

- reviewed and scrutinised accounting estimates in order to detect possible management bias.

Our audit did not identify any significant matters relating to the detection of irregularities, including fraud. However,
despite the audit being planned and conducted in accordance with ISAs (UK) there remains an unavoidable risk that material misstatement in the financial statements may not be detected owing to inherent limitations of the audit.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional
concealment, forgery, collusion, omission or misrepresentation.

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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HILLS RESIDENTIAL CONSTRUCTION LTD


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.




Melinda J Simpson (Senior Statutory Auditor)
for and on behalf of Haines Watts
Statutory Auditors
Town Wall House
Balkerne Hill
Colchester
Essex
CO3 3AD

18 September 2024

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023 2022
Notes £    £   

TURNOVER 3 16,866,932 28,582,661

Cost of sales (12,553,641 ) (20,552,441 )
GROSS PROFIT 4,313,291 8,030,220

Administrative expenses (2,084,553 ) (2,228,238 )
2,228,738 5,801,982

Other operating income 4 - 4,927
OPERATING PROFIT 7 2,228,738 5,806,909

Interest receivable and similar income 54,906 37,500
2,283,644 5,844,409

Interest payable and similar expenses 8 (1,498,993 ) (949,606 )
PROFIT BEFORE TAXATION 784,651 4,894,803

Tax on profit 9 (265,484 ) (914,730 )
PROFIT FOR THE FINANCIAL YEAR 519,167 3,980,073

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR

519,167

3,980,073

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

BALANCE SHEET
31 DECEMBER 2023

2023 2022
Notes £    £   
FIXED ASSETS
Property, plant and equipment 10 1,378,689 1,551,232
Investments 11 1,800,000 1,800,000
3,178,689 3,351,232

CURRENT ASSETS
Stocks 12 18,826,296 14,008,738
Debtors 13 13,102,416 12,394,470
Cash at bank 3,713,115 4,866,001
35,641,827 31,269,209
CREDITORS
Amounts falling due within one year 14 (25,604,449 ) (21,876,043 )
NET CURRENT ASSETS 10,037,378 9,393,166
TOTAL ASSETS LESS CURRENT LIABILITIES 13,216,067 12,744,398

CREDITORS
Amounts falling due after more than one
year

15

(388,114

)

(470,115

)

PROVISIONS FOR LIABILITIES 19 (305,801 ) (271,298 )
NET ASSETS 12,522,152 12,002,985

CAPITAL AND RESERVES
Called up share capital 20 100 100
Fair value reserve 21 1,799,900 1,799,900
Retained earnings 21 10,722,152 10,202,985
SHAREHOLDERS' FUNDS 12,522,152 12,002,985

The financial statements were approved by the Board of Directors and authorised for issue on 13 September 2024 and were signed on its behalf by:




Mr J A Hills - Director


HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023

Called up Fair
share Retained value Total
capital earnings reserve equity
£    £    £    £   
Balance at 1 January 2022 100 6,222,912 1,799,900 8,022,912

Changes in equity
Total comprehensive income - 3,980,073 - 3,980,073
Balance at 31 December 2022 100 10,202,985 1,799,900 12,002,985

Changes in equity
Total comprehensive income - 519,167 - 519,167
Balance at 31 December 2023 100 10,722,152 1,799,900 12,522,152

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 (2,426,784 ) 6,713,274
Interest paid (1,426,875 ) (902,962 )
Interest element of hire purchase payments
paid

(30,228

)

(46,644

)
Tax paid (906,607 ) (554,174 )
Net cash from operating activities (4,790,494 ) 5,209,494

Cash flows from investing activities
Purchase of tangible fixed assets (250,674 ) (393,461 )
Sale of tangible fixed assets 118,295 36,618
Interest received 54,906 37,500
Net cash from investing activities (77,473 ) (319,343 )

Cash flows from financing activities
New loans in year 13,491,090 13,622,507
Loan repayments in year (7,346,454 ) (15,990,256 )
Capital repayments in year (283,348 ) (335,778 )
Amount introduced by directors 1,200,000 611,000
Amount withdrawn by directors (851,776 ) (2,676,020 )
Assets financed in year 121,231 321,368
Loans repaid to related undertakings - (380,000 )
Loans given to related undertakings (4,983,707 ) (1,931,974 )
Loans repaid by related undertakings 2,251,814 1,074,449
Loans received from related undertakings 116,231 130,291
Net cash from financing activities 3,715,081 (5,554,413 )

Decrease in cash and cash equivalents (1,152,886 ) (664,262 )
Cash and cash equivalents at beginning of
year

2

4,866,001

5,530,263

Cash and cash equivalents at end of year 2 3,713,115 4,866,001

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023


1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2023 2022
£    £   
Profit before taxation 784,651 4,894,803
Depreciation charges 356,809 318,340
Profit on disposal of fixed assets (51,888 ) (30,252 )
Finance costs 1,498,993 949,606
Finance income (54,906 ) (37,500 )
2,533,659 6,094,997
(Increase)/decrease in stocks (4,817,558 ) 1,799,439
Decrease/(increase) in trade and other debtors 2,030,945 (1,752,339 )
(Decrease)/increase in trade and other creditors (2,173,830 ) 571,177
Cash generated from operations (2,426,784 ) 6,713,274

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2023
31.12.23 1.1.23
£    £   
Cash and cash equivalents 3,713,115 4,866,001
Year ended 31 December 2022
31.12.22 1.1.22
£    £   
Cash and cash equivalents 4,866,001 5,530,263


HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023


3. ANALYSIS OF CHANGES IN NET DEBT

At 1.1.23 Cash flow At 31.12.23
£    £    £   
Net cash
Cash at bank 4,866,001 (1,152,886 ) 3,713,115
4,866,001 (1,152,886 ) 3,713,115
Debt
Finance leases (723,197 ) 162,118 (561,079 )
Debts falling due within 1 year (5,585,579 ) (6,154,636 ) (11,740,215 )
Debts falling due after 1 year (24,167 ) 10,000 (14,167 )
(6,332,943 ) (5,982,518 ) (12,315,461 )
Total (1,466,942 ) (7,135,404 ) (8,602,346 )

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023


1. STATUTORY INFORMATION

Hills Residential Construction Limited is a Private Limited Company, limited by shares, registered in England and Wales. The company's registered number and registered office can be found on the Company Information page.

The presentation currency of the financial statements is in Pound Sterling (£) and the financial statements are rounded to the nearest Pound.

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.

Turnover
Turnover, in respect of contract work, which is stated net of VAT, represents the value of work done in the year including estimates of amounts not invoiced.

Turnover for property sales where the company has acted as a developer is taken to the income statement on the date of legal completion.

Property, plant and equipment
All property, plant and equipment is initially recorded at cost.

Depreciation
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:

Plant and Machinery- 20% to 33% straight line and reducing balance
Motor Vehicles- 20% to 25% reducing balance

Stocks
Development land is valued by the directors at the lower of cost and net realisable value. Work in progress is valued at prime cost less foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.

Financial instruments
Basic financial instruments are measured at amortised cost.

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.

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


2. ACCOUNTING POLICIES - continued

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 agreements
Assets held under hire purchase agreements are capitalised and disclosed under property, plant and equipment at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the income statement using the effective interest rate.

Operating lease agreements
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.

Pension costs
The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the income statement.

Long term contracts
Contract work in progress is valued at total costs incurred, less foreseeable losses. Profit on long term contracts is taken as the work is carried out once the final outcome of the project can be assessed with reasonable certainty. Provision is made for losses on contracts in the year in which they are foreseen.

Investments
Fixed asset investments are included at the Directors' evaluation of fair value (note 11).

Going concern
The financial statements have been prepared on a going concern basis. The Directors have reviewed and considered relevant information, including the annual budget and future cash flows in making their assessment. The Directors have concluded that they can continue to adopt the going concern basis in preparing the annual report and accounts.

3. TURNOVER

The turnover and operating profit for the year was derived from the company's principal activity and was carried out wholly in the UK.

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


4. OTHER OPERATING INCOME
2023 2022
£    £   
Discounts received - 4,927

5. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 587,285 554,787
Social security costs 63,730 60,282
Other pension costs 106,987 23,122
758,002 638,191

The average number of employees during the year was as follows:
2023 2022

Directors 6 6
Administrative 3 3
Operatives 6 5
15 14

6. DIRECTORS' EMOLUMENTS
2023 2022
£    £   
Directors' remuneration 204,600 204,082
Directors' pension contributions to money purchase schemes 90,900 19,257

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

Money purchase schemes 3 2

Information regarding the highest paid director is as follows:
2023 2022
£    £   
Emoluments etc 98,283 98,582
Pension contributions to money purchase schemes 13,750 6,897

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


7. OPERATING PROFIT

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

2023 2022
£    £   
Rent 85,589 149,840
Depreciation - owned assets 356,810 318,339
Profit on disposal of fixed assets (51,888 ) (30,252 )
Audit fees 18,550 24,140
Accountancy fees - non-audit 6,750 9,725

8. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank interest 787,833 425,312
Other interest 51,872 5,357
Other loan interest 629,060 472,293
Hire purchase 30,228 46,644
1,498,993 949,606

9. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 228,313 903,939
Tax under/(over) provision 2,668 -
Total current tax 230,981 903,939

Deferred tax 34,503 10,791
Tax on profit 265,484 914,730

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


9. TAXATION - continued

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:

2023 2022
£    £   
Profit before tax 784,651 4,894,803
Profit multiplied by the standard rate of corporation tax in the UK of 25%
(2022 - 19%)

196,163

930,013

Effects of:
Expenses not deductible for tax purposes 76 1,144
Capital allowances in excess of depreciation - (21,470 )
Depreciation in excess of capital allowances 59,407 -
Adjustments to tax charge in respect of previous periods 2,668 -
Deferred tax 38,889 10,791
Profit on disposal of fixed assets (12,972 ) (5,748 )
Marginal relief and rate differences (18,747 ) -
Total tax charge 265,484 914,730

The Finance Act 2021 announced an increase in the main rate of UK Corporation Tax from 19% to 25% applying to profits over £250,000 with effect from 1 April 2023. A small profits rate (SPR) was also be introduced for companies with profits of £50,000 or less so that they continue to pay Corporation Tax at 19%. Companies with profits between £50,000 and £250,000 pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate. Accordingly, deferred tax liabilities are stated at 25%.

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


10. PROPERTY, PLANT AND EQUIPMENT
Improvements
to Plant and Motor
property machinery vehicles Totals
£    £    £    £   
COST
At 1 January 2023 28,080 1,788,745 717,217 2,534,042
Additions - 54,306 196,368 250,674
Disposals - (99,309 ) (118,619 ) (217,928 )
At 31 December 2023 28,080 1,743,742 794,966 2,566,788
DEPRECIATION
At 1 January 2023 - 781,546 201,264 982,810
Charge for year 2,808 236,110 117,892 356,810
Eliminated on disposal - (91,185 ) (60,336 ) (151,521 )
At 31 December 2023 2,808 926,471 258,820 1,188,099
NET BOOK VALUE
At 31 December 2023 25,272 817,271 536,146 1,378,689
At 31 December 2022 28,080 1,007,199 515,953 1,551,232

Included within the net book value of £1,378,689 is £638,343 (2022: £764,096) relating to assets held under hire purchase agreements.

11. FIXED ASSET INVESTMENTS
Interest
in joint
venture
£   
COST
At 1 January 2023
and 31 December 2023 1,800,000
NET BOOK VALUE
At 31 December 2023 1,800,000
At 31 December 2022 1,800,000

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


11. FIXED ASSET INVESTMENTS - continued

The investment was valued at 31 December 2023 by the directors, based on the management information available as at that date. The historic cost of the investment is £100. The directors have adopted this value as representative of the fair value of the investment as at 31st December 2023.

The following was a joint venture of the company:

Name Registered Office Principal Activity Holding

Kesgrave Hall Limited
400 Dashwood Lang Road,
Weybridge, Surrey, KT15 2HJ

Hotel and restaurant

50%

The below disclosures in respect of Kesgrave Hall Limited were taken directly from the most recent audited financial statements for the year ended 31st March 2023:



Year Ended Year Ended
31.03.23 31.03.22
£ £

Net assets 3,388,627 3,577,849

Turnover 4,133,266 4,526,691
Gross profit 3,202,220 3,538,193
Operating profit 433,767 1,123,421

12. STOCKS
2023 2022
£    £   
Stocks 50,121 35,415
Work-in-progress 18,776,175 13,973,323
18,826,296 14,008,738

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


13. DEBTORS
2023 2022
£    £   
Amounts falling due within one year:
Trade debtors 137,967 390,860
Amounts due from related undertakings 9,620,554 6,888,662
Amounts recoverable on contracts 2,275,667 3,926,910
Other debtors 271,138 419,177
Directors' current account 7,000 -
Prepayments and accrued income 40,090 18,861
12,352,416 11,644,470

Amounts falling due after more than one year:
Amounts due from related undertakings 750,000 750,000

Aggregate amounts 13,102,416 12,394,470

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Bank loans (see note 16) 11,740,215 5,585,579
Hire purchase contracts (see note 17) 187,132 277,249
Trade creditors 2,314,592 2,460,101
Amounts due to related undertakings 246,521 130,291
Corporation tax 270,202 903,939
Other taxes and social security 28,200 41,142
Other creditors 1,194,780 1,367,669
Directors' current account 5,274,596 4,919,372
Accruals and deferred income 4,348,211 6,190,701
25,604,449 21,876,043

15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2023 2022
£    £   
Bank loans (see note 16) 14,167 24,167
Hire purchase contracts (see note 17) 373,947 445,948
388,114 470,115

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


16. LOANS

An analysis of the maturity of loans is given below:

2023 2022
£    £   
Amounts falling due within one year or on demand:
Bank loans 11,740,215 5,585,579

Amounts falling due between one and two years:
Bank loans - 1-2 years 10,000 10,000

Amounts falling due between two and five years:
Bank loans - 2-5 years 4,167 14,167

17. LEASING AGREEMENTS

Minimum lease payments under hire purchase fall due as follows:

2023 2022
£    £   
Net obligations repayable:
Within one year 187,132 277,249
Between one and five years 373,947 445,948
561,079 723,197

18. SECURED DEBTS

The following secured debts are included within creditors:

2023 2022
£    £   
Hire purchase contracts 561,079 723,197
Bank loans 11,730,215 5,575,579
12,291,294 6,298,776

The bank loans are secured by way of a legal charge over the developments of the company to which they relate.

The hire purchase contracts are secured by way of a legal charge over the assets to which they relate.

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


19. PROVISIONS FOR LIABILITIES
2023 2022
£    £   
Deferred tax
Accelerated capital allowances 305,801 271,298

Deferred
tax
£   
Balance at 1 January 2023 271,298
Provided during year 34,503
Balance at 31 December 2023 305,801

20. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
100 Ordinary shares of £1 each £1 100 100

21. RESERVES
Fair
Retained value
earnings reserve Totals
£    £    £   

At 1 January 2023 10,202,985 1,799,900 12,002,885
Profit for the year 519,167 - 519,167
At 31 December 2023 10,722,152 1,799,900 12,522,052

22. CONTINGENT LIABILITIES

The company has provided a guarantee, limited to £350,000, against borrowings entered into by Kesgrave Hall Limited. No provision has been made in the financial statements for this amount.

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


23. TRANSACTIONS WITH THE DIRECTORS

Mr J A Hills

During the year Mr J A Hills was advanced £844,776 (2022: £2,609,668), and introduced £1,200,000 (2022: £611,000). Mr J A Hills loaned the company £Nil (2022: £Nil) and was repaid £Nil (2022: £66,352) in respect of these loans. At the year end a balance was due from the company to Mr J A Hills of £5,274,596 (2022: £4,919,372).

The loans introduced by Mr J A Hills attract interest at a rate of 8% above the Bank of England base rate. These are unsecured and repayable on demand.

Other Directors

During the year a further Director was advanced £7,000 (2022: £Nil). This amount was outstanding at the year end and has subsequently been repaid.

HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


24. RELATED PARTY DISCLOSURES

Kesgrave Hall Limited:

Hills Residential Construction Limited owns 50% of the share capital of Kesgrave Hall Limited. Transactions with this company are set out below:

At the year end, the Company was due an amount of £750,000 (2022: £750,000) from Kesgrave Hall Limited. The loan attracts interest at a rate of 5% per annum. During the year, the company had interest receivable on the loan of £37,500 (2022: £37,500).

At the year end, the Company was due an amount of £205,079 (2022: £196,748) from Kesgrave Hall Limited in respect of a trade debtor balance. During the year, the Company made sales of £786,780 (2022: £315,681) and received £778,449 (2022: £132,991) in respect of these sales.

Hills Residential Construction Limited has common ownership with Hills Building Group Limited, Hills Contractors & Construction Limited, Grange Marsh Properties Limited, Hills Group Fund 2 and Hills Self Storage Limited. Transactions with these entities are set out below:

Hills Building Group Limited:

At the year end, the Company was due an amount of £1,022,298 (2022: £961,484). During the year, the Company made payments on behalf of Hills Building Group Limited of £144,139 (2022: £82,139), incurred charges of £1,665,780 (2022: £1,050,000) and received £32,545 (2022: £188,077). Loans advanced in the year to Hills Building Group Limited were £1,601,003 (2022: £1,100,000) and repayments received from Hills Building Group Limited was £Nil (2022: £40,000).

Hills Contractors & Construction Limited:

At the year end, the Company was due an amount of £854,564 (2022: £2,858,079). During the year, the Company paid expenses on behalf of Hills Contractors & Construction Limited of £13,501 (2022: £6,665), had expenses paid on their behalf of £382 (2022: £4,207), incurred charges of £639,230 (2022: £2,392,198), paid charges of £639,230 (2022: £132,054), raised invoices for inter-company charges of £12,589 (2022: £61,149) and received payments in respect of these invoices of £12,589 (2022: £Nil). Total monies advanced to Hills Contractors & Construction Limited was £2,050,670 (2022: £1,325,000) and total monies received from Hills Contractors & Construction was £4,067,304 (2022: £150,000).

Grange Marsh Properties Limited:

At the year end, the Company was due an amount of £7,530,644 (2022: £2,616,083). During the year, the company raised invoices of £2,419,561 (2022: £Nil). Loans advanced to Grange Marsh Properties Limited was £2,625,000 (2022: £4,230,000) and repayments received from Grange Marsh Properties Limited were £130,000 (2022: £2,730,000).







HILLS RESIDENTIAL CONSTRUCTION LTD (REGISTERED NUMBER: 03919214)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


RELATED PARTY DISCLOSURES - continued

Hills Group Fund 2:

At the year end the Company was due an amount of £7,969 (2022: £256,268). During the year, the Company paid expenses on behalf of Hills Group Fund 2 of £16,031 (2022: £Nil), incurred charges of £22,500 (2022: £93,250), made payments in respect of these charges of £93,800 (2022: £6,803), raised invoices of £Nil (2022: £529,776) and received payments in respect of work done of £335,730 (2022: £194,045). Total monies advanced to Hills Group Fund 2 was £Nil (2022: £380,000).

Hills Self Storage Limited:

At the year end the Company owed an amount of £246,521 (2022: £130,291). During the year, the Company made payments on behalf of Hills Self Storage Limited of £1,230 (2022: £846), incurred inter-company charges of £72,460 (2022: £139,422) and made payments in respect of these charges of £Nil (2022: £33,285). Total monies advanced to Hills Self Storage Limited was £25,000 (2022: £Nil) and total monies received from Hills Self Storage Limited was £70,000 (2022: £25,000).

Transactions With Family Members:

During the current year family members received remuneration from the company totalling £43,049 (2022: £44,200).

25. ULTIMATE CONTROLLING PARTY

The company was under the control of Mr J A Hills by virtue of him holding 80% of the company's issued share capital.