Company Registration No. SC060107 (Scotland)
HIGHLAND METAL DEVELOPMENTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
HIGHLAND METAL DEVELOPMENTS LIMITED
COMPANY INFORMATION
Directors
J D Ashmead
A C Ashmead
P Ashmead
Secretary
R G Steel
Company number
SC060107
Registered office
Pinefield Industrial Estate
ELGIN
IV30 6FG
Auditor
Johnston Carmichael LLP
Strathlossie House
Elgin Business Park
Kirkhill Avenue
Elgin
IV30 8DE
HIGHLAND METAL DEVELOPMENTS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 27
HIGHLAND METAL DEVELOPMENTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Fair review of the business

Total turnover for the year to 31 March 2024 increased by 11.7% - from £12.2m to £13.7m reflecting growth in both business volumes and market pricing.

 

Overall gross margin increased to 40.5% as a result of inflationary pressure on direct costs easing together with positive measures to improve efficiency and manage the cost base.

 

The above referenced improved business performance led to an increase in operating profit to £1.7m and with considerably better returns on cash and other investments, profit before taxation increased to £2.1m.

 

The directors are pleased with the results for the year and with the group’s financial position as reflected by net assets at 31 March 2024 of £15.7m.

Principal risks and uncertainties

The group is exposed to fluctuations in commodity prices as referred to above, particularly raw materials (zinc, mainly) and energy.

 

Although inflation has reduced considerably, control of some direct costs remains challenging (notably labour as referred to below) and there is a risk of negative impact on margins due to market pressure on selling prices.

 

The labour market shows little sign of improving so the difficulties in recruiting and retaining employees, particularly at factory level, are likely to persist.

 

The directors are satisfied that all available measures to monitor and manage these risks are in place.

Key performance indicators

The directors manage the main areas of the business using a broad range of key financial performance indicators designed to ensure regular, tight monitoring and control of all operational activity. These financial indicators focus mainly on revenue growth and operating margin and with regard to the latter, specific ratios to measure the effectiveness of labour and raw material consumption are analysed in detail, allowing real time management and control of key aspects of operational performance.

 

There are also non-financial key performance indicators used to ensure continuous improvement in Health & Safety, Quality and Environmental performance.

Future developments

Substantial capital investment is planned for both of the group’s operating sites and this together with increased commitment to measures to improve the development and wellbeing of people will enable strategic and operational objectives to be achieved.

On behalf of the board

A C Ashmead
Director
2 October 2024
HIGHLAND METAL DEVELOPMENTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

The directors present their report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the group through its subsidiaries is that of the supply of galvanizing, powder coating and the duplex service combining these processes, "Colourgalv".

Results and dividends

The results for the year are set out on page 8.

Dividends amounting to £233,164 (2023 - £173,572) have been paid as disclosed in note 11. The directors do not recommend payment of a further dividend.

Directors

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

J D Ashmead
A C Ashmead
P Ashmead
Auditor

The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period.

 

In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Information contained with the strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.

HIGHLAND METAL DEVELOPMENTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
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 auditor of the group and company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the group and company is aware of that information.

On behalf of the board
A C Ashmead
Director
2 October 2024
HIGHLAND METAL DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HIGHLAND METAL DEVELOPMENTS LIMITED
- 4 -
Opinion

We have audited the financial statements of Highland Metal Developments Limited ('the parent company') and its subsidiaries ('the group') for the year ended 31 March 2024 which comprise of the Group Statement of Comprehensive Income, Group Balance Sheet, Company Balance Sheet, Group Statement of Changes in Equity, Company Statement of Changes in Equity, Group Statement of Cash Flows 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and parent 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 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:

 

HIGHLAND METAL DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHLAND METAL DEVELOPMENTS LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of our knowledge and understanding of the group and the parent company and their 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 in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the Statement of directors' responsibilities set out on page 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group and parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or parent company or to cease operations, or have no realistic alternative but to do so.

Auditor 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.

 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

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.

 

We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

 

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

HIGHLAND METAL DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHLAND METAL DEVELOPMENTS LIMITED
- 6 -

We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

 

 

We gained an understanding of how the group and parent company are complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted reviews, external inspections, relevant correspondence with regulatory bodies and board meeting minutes.

 

We assessed the susceptibility of the group's and parent company's financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:

 

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:    

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

HIGHLAND METAL DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHLAND METAL DEVELOPMENTS LIMITED
- 7 -

Use of our report

This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Martin Bannerman (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
9 October 2024
Statutory Auditor
Strathlossie House
Elgin Business Park
Kirkhill Avenue
Elgin
IV30 8DE
HIGHLAND METAL DEVELOPMENTS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
13,672,375
12,244,156
Cost of sales
(8,134,864)
(7,920,645)
Gross profit
5,537,511
4,323,511
Distribution costs
(1,084,560)
(1,033,253)
Administrative expenses
(2,812,943)
(2,246,762)
Other operating income
34,340
34,340
Operating profit
4
1,674,348
1,077,836
Interest receivable and similar income
8
182,213
86,227
Interest payable and similar expenses
9
(6,124)
-
0
Fair value movement on investments
10
249,821
(285,387)
Profit before taxation
2,100,258
878,676
Tax on profit
11
(585,676)
(163,724)
Total comprehensive income for the year
1,514,582
714,952
Profit and total comprehensive income for the year is all attributable to the owners of the parent company.

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

HIGHLAND METAL DEVELOPMENTS LIMITED
GROUP BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
13
3,131,907
3,299,284
Investments
14
3,862,490
3,585,304
6,994,397
6,884,588
Current assets
Stocks
16
1,221,983
1,295,063
Debtors
17
2,650,911
2,573,483
Investments
18
3,000,000
-
0
Cash at bank and in hand
5,226,629
6,065,457
12,099,523
9,934,003
Creditors: amounts falling due within one year
19
(2,873,255)
(1,907,841)
Net current assets
9,226,268
8,026,162
Total assets less current liabilities
16,220,665
14,910,750
Creditors: amounts falling due after more than one year
20
(184,515)
(215,355)
Provisions for liabilities
Deferred tax liability
22
314,822
265,485
(314,822)
(265,485)
Net assets
15,721,328
14,429,910
Capital and reserves
Called up share capital
24
24,796
24,796
Capital redemption reserve
25
70,205
70,205
Profit and loss reserves
15,626,327
14,334,909
Total equity
15,721,328
14,429,910
The financial statements were approved by the board of directors and authorised for issue on 2 October 2024 and are signed on its behalf by:
02 October 2024
A C Ashmead
Director
HIGHLAND METAL DEVELOPMENTS LIMITED
COMPANY BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investments
14
27,500
27,500
Current assets
-
-
Creditors: amounts falling due within one year
19
(128)
(128)
Net current liabilities
(128)
(128)
Net assets
27,372
27,372
Capital and reserves
Called up share capital
24
24,796
24,796
Capital redemption reserve
25
2,705
2,705
Profit and loss reserves
(129)
(129)
Total equity
27,372
27,372

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £223,164 (2023 - £173,572 profit).

The financial statements were approved by the board of directors and authorised for issue on 2 October 2024 and are signed on its behalf by:
02 October 2024
A C Ashmead
Director
Company Registration No. SC060107
HIGHLAND METAL DEVELOPMENTS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
24,796
70,205
13,793,529
13,888,530
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
714,952
714,952
Dividends
12
-
-
(173,572)
(173,572)
Balance at 31 March 2023
24,796
70,205
14,334,909
14,429,910
Year ended 31 March 2024:
Profit and total comprehensive income for the year
-
-
1,514,582
1,514,582
Dividends
12
-
-
(223,164)
(223,164)
Balance at 31 March 2024
24,796
70,205
15,626,327
15,721,328
HIGHLAND METAL DEVELOPMENTS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
24,796
2,705
(129)
27,372
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
173,572
173,572
Dividends
12
-
-
(173,572)
(173,572)
Balance at 31 March 2023
24,796
2,705
(129)
27,372
Year ended 31 March 2024:
Profit and total comprehensive income for the year
-
-
223,164
223,164
Dividends
12
-
-
(223,164)
(223,164)
Balance at 31 March 2024
24,796
2,705
(129)
27,372
HIGHLAND METAL DEVELOPMENTS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
29
2,861,263
793,935
Interest paid
(6,124)
-
0
Income taxes paid
(343,875)
(209,572)
Net cash inflow from operating activities
2,511,264
584,363
Investing activities
Purchase of tangible fixed assets
(290,526)
(244,473)
Proceeds on disposal of tangible fixed assets
8,750
-
Purchase of investments
(27,365)
(22,226)
Increase on cash held on deposit
(3,000,000)
-
Interest received
160,942
48,181
Dividends received
21,271
38,046
Net cash used in investing activities
(3,126,928)
(180,472)
Financing activities
Dividends paid to equity shareholders
(223,164)
(173,572)
Net cash used in financing activities
(223,164)
(173,572)
Net (decrease)/increase in cash and cash equivalents
(838,828)
230,319
Cash and cash equivalents at beginning of year
6,065,457
5,835,138
Cash and cash equivalents at end of year
5,226,629
6,065,457
HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
1
Accounting policies
Company information

Highland Metal Developments Limited ("the company") is a company limited by shares incorporated and domiciled in Scotland. The registered office is Pinefield Industrial Estate, ELGIN, IV30 6FG.

 

The group consists of Highland Metal Developments Limited and its subsidiary undertakings.

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 £.

The financial statements have been prepared on the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies 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 for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the company together with all of its subsidiary undertakings. All financial statements are made up to 31 March 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

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

 

Subsidiaries are consolidated in the group's financial statements from the date that control commences until the date that control ceases.

1.3
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the

directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Turnover represents amounts receivable for galvanizing and powder coating services net of VAT and trade discounts.

HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -

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 despatch 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 group and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Freehold buildings
- Straight line over 25 years
Plant and machinery
- Straight line over 4 to 10 years
Fixtures, fittings & equipment
- Straight line over 4 to 10 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Land is not depreciated.

1.6
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in the profit and loss account.

 

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

Listed investments are measured at fair value with any impairment losses being recognised through the profit and loss account immediately.

1.7
Impairment of fixed assets

At each reporting end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises the invoiced price of goods and materials on a first in first out basis. The cost of work in progress comprises materials, direct labour and attributable production overheads.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the profit and loss account. Reversals of impairment losses are also recognised in the profit and loss account.

1.9
Cash at bank and in hand

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments, and bank overdrafts.

HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
1.10
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, 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.

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 the profit and loss account.

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.

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 group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Basic financial liabilities

Basic financial liabilities, including creditors, are recognised at transaction price.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less.

Derecognition of financial liabilities

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

1.11
Equity instruments

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

1.12
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not they will be recovered. Deferred tax assets and liabilities are not discounted.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.14
Retirement benefits

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

1.15
Leases

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.

1.16
Government grants

Government grants are recognised in accordance with the accruals model. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 18 -
Key sources of estimation uncertainty

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

stock

The calculation of the value of the zinc held in the kettles of £867,638 (2023 - £935,838) which is included within raw materials and consumables stock, is based on the total quantity held, which remains relatively constant and which in turn is made up of the estimated tonnage of zinc itself (valued at cost) and the estimated tonnage of residues (valued at estimated realisable value).

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Galvanizing services
11,423,037
10,239,695
Powder Coating services
2,249,338
2,004,461
13,672,375
12,244,156
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
13,672,375
12,244,156
2024
2023
£
£
Other significant revenue
Interest income
160,942
48,181
Dividends received
21,271
38,046
Grants received
30,840
30,840
4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
(30,840)
(30,840)
Depreciation of owned tangible fixed assets
449,763
436,350
(Profit)/loss on disposal of tangible fixed assets
(610)
390
HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
2,500
2,250
Audit of the financial statements of the company's subsidiaries
25,550
23,500
28,050
25,750
6
Employees

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

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Administration and directors
27
24
3
3
Production
87
85
-
-
Total
114
109
3
3

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
4,319,829
3,654,644
-
0
-
0
Social security costs
450,495
397,976
-
-
Pension costs
287,764
139,598
-
0
-
0
5,058,088
4,192,218
-
0
-
0
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
326,508
201,918
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
169,767
107,087
HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
133,578
25,954
Other interest income
27,364
22,227
Total interest revenue
160,942
48,181
Other income from investments
Dividends received
21,271
38,046
Total income
182,213
86,227

Investment income includes the following:

Dividends from financial assets measured at fair value through profit or loss
21,271
38,046
9
Interest payable and similar expenses
2024
2023
£
£
Other interest
6,124
-
10
Fair value movements on investments
2024
2023
£
£
Fair value gains/(losses) on financial instruments
Amounts written back to/(written off) fair value through profit or loss
249,821
(285,387)
11
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
551,579
200,008
Adjustments in respect of prior periods
(15,240)
(93,403)
Total current tax
536,339
106,605
Deferred tax
Origination and reversal of timing differences
42,276
(36,739)
Adjustment in respect of prior periods
7,061
93,858
Total deferred tax
49,337
57,119
Total tax charge
585,676
163,724
HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
11
Taxation
(Continued)
- 21 -

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:

2024
2023
£
£
Profit before taxation
2,100,258
878,676
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
525,065
166,948
Tax effect of expenses that are not deductible in determining taxable profit
16,564
36,195
Tax effect of income not taxable in determining taxable profit
(62,605)
-
0
Change in unrecognised deferred tax assets
-
0
(16,429)
Adjustments in respect of prior years
(15,240)
(93,403)
Deferred tax adjustments in respect of prior years
7,061
93,858
Dividend income
(5,318)
(7,229)
Adjustment to brought forward values
-
0
2,266
Chargeable gains/(losses)
76,331
(37,009)
Deferred tax adjusted to the closing rate
-
0
(4,875)
Fixed asset differences
43,818
23,402
Taxation charge
585,676
163,724

An increase in the UK corporation tax rate from 19% to 25% (effective from 1 April 2023) was substantively enacted on 24 May 2021.

 

Deferred tax has been calculated using the rate effective in the period it is expected to reverse.

12
Dividends
2024
2023
£
£
Ordinary shares
Final paid
223,164
173,572
HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
13
Tangible fixed assets
Group
Freehold land and buildings
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost
At 1 April 2023
5,325,300
4,870,214
49,349
10,244,863
Additions
10,320
276,010
4,196
290,526
Disposals
-
0
(56,200)
-
0
(56,200)
At 31 March 2024
5,335,620
5,090,024
53,545
10,479,189
Depreciation and impairment
At 1 April 2023
3,210,595
3,695,121
39,863
6,945,579
Depreciation charged in the year
187,896
253,518
8,349
449,763
Eliminated in respect of disposals
-
0
(48,060)
-
0
(48,060)
At 31 March 2024
3,398,491
3,900,579
48,212
7,347,282
Carrying amount
At 31 March 2024
1,937,129
1,189,445
5,333
3,131,907
At 31 March 2023
2,114,705
1,175,093
9,486
3,299,284
The company had no tangible fixed assets at 31 March 2024 or 31 March 2023.

Freehold land with a value of £185,618 (2023 - £185,618) has not been depreciated.

14
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
27,500
27,500
Listed investments
3,862,490
3,585,304
-
0
-
0
3,862,490
3,585,304
27,500
27,500
Listed investments carrying amount
3,862,490
3,585,304
-
-
Fixed asset investments revalued

Listed investments comprise of publicly traded shares which are held at their fair value. The historic cost of these investments are £3,209,022 (2023 - £3,181,658).

 

The change in fair value of these investments has been established through assessing the market value of the investments at the year-end.

HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
14
Fixed asset investments
(Continued)
- 23 -
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 April 2023
3,585,304
Additions
27,365
Valuation changes
249,821
At 31 March 2024
3,862,490
Carrying amount
At 31 March 2024
3,862,490
At 31 March 2023
3,585,304
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 April 2023 and 31 March 2024
27,500
Carrying amount
At 31 March 2024
27,500
At 31 March 2023
27,500
15
Subsidiaries

Details of the company's subsidiaries at 31 March 2024 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Highland Metals Limited
See below
Galvanizing services
Ordinary
100.00
-
Highland Colour Coaters Limited
See below
Galvanizing services
Ordinary/Preference
-
100.00
Highland Galvanizers Limited
See below
Dormant
Ordinary
-
100.00

The registered office address of the subsidiaries is Pinefield Industrial Estate, Elgin, IV30 6FG.

HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
16
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
1,214,123
1,279,330
-
-
Work in progress
7,860
15,733
-
-
1,221,983
1,295,063
-
-
17
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,479,362
2,420,347
-
0
-
0
Other debtors
171,549
153,136
-
0
-
0
2,650,911
2,573,483
-
-
18
Current asset investments
Group
Company
2024
2023
2024
2023
£
£
£
£
Short term deposits
3,000,000
-
-
-
19
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Trade creditors
963,072
592,176
-
0
-
0
Corporation tax payable
392,104
199,640
-
0
-
0
Other taxation and social security
467,796
393,631
-
-
Other creditors
670,382
425,440
128
128
Accruals and deferred income
379,901
296,954
-
0
-
0
2,873,255
1,907,841
128
128
20
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Government grants
21
184,515
215,355
-
0
-
0
HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
21
Government grants
Group
Company
2024
2023
2024
2023
£
£
£
£
Arising from government grants
184,515
215,355
-
-
184,515
215,355
-
-

The group received an initial government grant in 2003 of £480,000, which is amortised over 25 years, with a balance of £93,992 included in the total above at the year end. The conditions of the grant have been satisfied.

 

A further grant was received in 2012 of £187,500, which has also been amortised over 25 years, with a balance of £90,523 included in the total above at the year end.

22
Deferred taxation

Deferred tax assets and liabilities are offset where the group or 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
2024
2023
Group
£
£
ACAs
269,376
266,260
Capital gains
123,846
43,834
Other timing differences
(78,400)
(44,609)
314,822
265,485
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 April 2023
265,485
-
Charge to profit or loss
49,337
-
Liability at 31 March 2024
314,822
-
HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 26 -
23
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
287,764
139,598

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

24
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
24,796
24,796
24,796
24,796
25
Capital redemption reserve
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning and end of the year
70,205
70,205
2,705
2,705

The capital redemption reserve records the nominal value of shares repurchased by the company.

26
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2024
2023
2024
2023
£
£
£
£
Acquisition of tangible fixed assets
143,000
-
-
-
27
Related party transactions

The company has taken advantage of the exemption with FRS 102 Section 33 paragraph 33.1A, not to disclose transactions entered into between two or more members of the group, as the company is the parent of the group to which it is party to the transactions.

28
Directors' transactions

Dividends totalling £223,164 (2023 - £173,572) were paid in the year in respect of shares held by the company's directors.

HIGHLAND METAL DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 27 -
29
Cash generated from group operations
2024
2023
£
£
Profit for the year after tax
1,514,582
714,952
Adjustments for:
Taxation charged
585,676
163,724
Finance costs
6,124
-
0
Investment income
(182,213)
(86,227)
(Gain)/loss on disposal of tangible fixed assets
(610)
390
Depreciation and impairment of tangible fixed assets
449,763
436,350
Fair value movement on investments
(249,821)
285,387
Movements in working capital:
Decrease/(increase) in stocks
73,080
(78,622)
(Increase) in debtors
(77,428)
(33,738)
Increase/(decrease) in creditors
772,950
(577,441)
(Decrease) in deferred income
(30,840)
(30,840)
Cash generated from operations
2,861,263
793,935
30
Analysis of changes in net funds - group
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
6,065,457
(838,828)
5,226,629
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