Company Registration No. SC061436 (Scotland)
HIGHLAND METALS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
HIGHLAND METALS LIMITED
COMPANY INFORMATION
Directors
R G Steel
G C Bulloch
J D Ashmead
A C Ashmead
J Macintosh
(Appointed 24 January 2024)
Secretary
R G Steel
Company number
SC061436
Registered office
Pinefield Industrial Estate
ELGIN
IV30 6FG
Auditor
Johnston Carmichael LLP
Strathlossie House
Elgin Business Park
Kirkhill Avenue
Elgin
IV30 8DE
HIGHLAND METALS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
HIGHLAND METALS 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
Galvanizing turnover for the year to 31 March 2024 increased by 15.8% - from £3.9m to £4.5m as a result of growth in both volumes and in market prices.
Gross margin increased to 40.9% as a result of inflationary pressure on direct costs easing together with positive measures to improve efficiency and manage the cost base.
This improved business performance together with considerably better returns on cash and other investments ensured that profit before taxation, including a dividend received from the subsidiary company, increased to £1.9m.
At 31 March 2024, the company had net assets of £12.1m and a balance sheet reflecting a very strong financial position.
Principal risks and uncertainties
The company 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
The company has embarked on a major asset refurbishment programme designed to extend the life of the site and to improve the working environment and operational efficiency.
This together with increased commitment to measures to improve the development and wellbeing of people will enable strategic and operational objectives to be achieved.
R G Steel
Director
2 October 2024
HIGHLAND METALS 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 company is that of the supply of galvanizing processes.
Results and dividends
The results for the year are set out on page 8.
A dividend amounting to £233,164 has been paid as disclosed in note 10. 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:
R G Steel
G C Bulloch
J D Ashmead
A C Ashmead
J Macintosh
(Appointed 24 January 2024)
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 strategic report, 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 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HIGHLAND METALS 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 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.
Information contained within the Strategic Report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by 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.
On behalf of the board
R G Steel
Director
2 October 2024
HIGHLAND METALS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HIGHLAND METALS LIMITED
- 4 -
Opinion
We have audited the financial statements of Highland Metals Limited ('the company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, 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 31 March 2024 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 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 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.
HIGHLAND METALS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHLAND METALS LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of our 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 in relation to which 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, 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 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.
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 METALS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHLAND METALS LIMITED
- 6 -
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and the sector in which it operates, 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:
UK Generally Accepted Accounting Practices
Companies Act 2006
Corporation Tax Act 2010
Scottish Environment Protection Agency (SEPA)
Health and Safety Regulations.
We gained an understanding of how the company is 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 returns, external inspections, relevant correspondence with regulatory bodies and board meeting minutes.
We assessed the susceptibility of the 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:
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the company's procurement of legal and professional services;
Performing audit work procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management and those charged with governance in their calculation of accounting estimates for potential management bias;
Performing audit work procedures to confirm the completeness and cut off of revenue;
Performing audit work procedures over the risk of zinc stock valuation, including testing of the relevant usage adjustments;
Completion of appropriate checklists and use of our experience to assess the company's compliance with the Companies Act 2006; and,
Agreement of the financial statement disclosures to supporting documentation.
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 METALS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHLAND METALS LIMITED
- 7 -
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.
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 METALS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
4,483,896
3,872,294
Cost of sales
(2,650,195)
(2,643,281)
Gross profit
1,833,701
1,229,013
Distribution costs
(351,359)
(328,845)
Administrative expenses
(1,386,484)
(1,053,424)
Other operating income
387,742
261,209
Operating profit
4
483,600
107,953
Interest receivable and similar income
7
1,212,213
1,116,227
Fair value movement on investments
8
249,821
(285,387)
Profit before taxation
1,945,634
938,793
Tax on profit
9
(272,883)
13,877
Profit for the financial year
1,672,751
952,670
Total comprehensive income for the year
1,672,751
952,670
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
HIGHLAND METALS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
625,233
632,968
Investments
12
4,862,488
4,585,302
5,487,721
5,218,270
Current assets
Stocks
14
571,247
598,949
Debtors
15
997,166
910,120
Investments
16
3,000,000
Cash at bank and in hand
3,602,779
4,774,255
8,171,192
6,283,324
Creditors: amounts falling due within one year
17
(1,442,644)
(787,703)
Net current assets
6,728,548
5,495,621
Total assets less current liabilities
12,216,269
10,713,891
Provisions for liabilities
Deferred tax liability
18
161,184
108,393
(161,184)
(108,393)
Net assets
12,055,085
10,605,498
Capital and reserves
Called up share capital
20
27,501
27,501
Capital redemption reserve
21
94,999
94,999
Profit and loss reserves
11,932,585
10,482,998
Total equity
12,055,085
10,605,498
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:
G C Bulloch
Director
Company Registration No. SC061436
HIGHLAND METALS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
27,501
94,999
9,703,900
9,826,400
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
952,670
952,670
Dividends
10
-
-
(173,572)
(173,572)
Balance at 31 March 2023
27,501
94,999
10,482,998
10,605,498
Year ended 31 March 2024:
Profit and total comprehensive income for the year
-
-
1,672,751
1,672,751
Dividends
10
-
-
(223,164)
(223,164)
Balance at 31 March 2024
27,501
94,999
11,932,585
12,055,085
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
1
Accounting policies
Company information
Highland Metals Limited is a private company limited by shares incorporated and domiciled in Scotland. The registered office is Pinefield Industrial Estate, ELGIN, IV30 6FG.
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 adopted are set out below.
This 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 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Highland Metals Limited is a wholly owned subsidiary of Highland Metal Developments Limited and the results of Highland Metals Limited are included in the consolidated financial statements of that entity, which are publicly available.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.
1.3
Turnover
Turnover represents amounts receivable for galvanizing services performed net of VAT and trade discounts. Turnover is recognised at the point of despatch.
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 entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
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
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 credited or charged to the profit and loss account.
1.5
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 company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
Listed investments are measured at fair value through the profit and loss account with any impairment losses being recognised through the profit and loss account immediately.
1.6
Impairment of fixed assets
At each reporting end date, the company 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).
1.7
Stocks
Stocks and work in progress 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.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and, other short-term liquid investments.
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
1.9
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 measured at transaction price including transaction costs.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, 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, 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.
Impairment of financial assets
Financial assets, other than those held at fair value through the profit and loss account, 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 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, 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. Amounts 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 company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
1.11
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 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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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.
1.15
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 company’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 METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 15 -
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 kettle of £443,768 (2023 - £480,268), 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 company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Galvanizing services
4,483,896
3,872,294
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
4,483,896
3,872,294
2024
2023
£
£
Other significant revenue
Interest income
190,942
78,181
Dividends received
1,021,271
1,038,046
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
28,600
13,000
Depreciation of owned tangible fixed assets
124,815
119,411
The company has taken advantage of the exemption from the disclosure of remuneration paid to its auditors for non-audit services. This exemption is available to the company as it prepares consolidated accounts which are required to include such disclosures in those accounts.
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Administration and directors
12
12
Production
22
24
Total
34
36
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,524,187
1,280,072
Social security costs
184,571
158,415
Pension costs
155,460
60,504
1,864,218
1,498,991
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
464,507
342,184
Company pension contributions to defined contribution schemes
109,079
15,672
573,586
357,856
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
150,478
155,239
Company pension contributions to defined contribution schemes
39,092
11,571
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
133,578
25,954
Other interest income
57,364
52,227
Total interest revenue
190,942
78,181
Other income from investments
Dividends received
21,271
38,046
Total income
212,213
116,227
Income from fixed asset investments
Income from shares in group undertakings
1,000,000
1,000,000
Total income
1,212,213
1,116,227
Investment income includes the following:
Dividends from financial assets measured at fair value through profit or loss
21,271
38,046
8
Fair value movement 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)
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
219,981
839
Adjustments in respect of prior periods
111
(62,700)
Total current tax
220,092
(61,861)
Deferred tax
Origination and reversal of timing differences
45,715
(45,874)
Adjustment in respect of prior periods
7,076
93,858
Total deferred tax
52,791
47,984
Total tax charge/(credit)
272,883
(13,877)
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Taxation
(Continued)
- 18 -
The actual charge/(credit) 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
1,945,634
938,793
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
486,409
178,371
Tax effect of expenses that are not deductible in determining taxable profit
16,564
36,194
Tax effect of income not taxable in determining taxable profit
(62,605)
Change in unrecognised deferred tax assets
(16,429)
Adjustments in respect of prior years
111
(62,700)
Deferred tax adjustments in respect of prior years
7,076
93,858
Dividend income
(255,318)
(197,229)
Chargeable gains/(losses)
76,331
(37,009)
Deferred tax adjusted to closing rate
(7,067)
Fixed asset differences
4,315
(1,866)
Taxation charge/(credit) for the year
272,883
(13,877)
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.
10
Dividends
2024
2023
£
£
Final paid
223,164
173,572
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
11
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Total
£
£
£
Cost
At 1 April 2023
651,766
1,741,635
2,393,401
Additions
10,320
106,760
117,080
Disposals
(47,320)
(47,320)
At 31 March 2024
662,086
1,801,075
2,463,161
Depreciation and impairment
At 1 April 2023
552,371
1,208,062
1,760,433
Depreciation charged in the year
6,916
117,899
124,815
Eliminated in respect of disposals
(47,320)
(47,320)
At 31 March 2024
559,287
1,278,641
1,837,928
Carrying amount
At 31 March 2024
102,799
522,434
625,233
At 31 March 2023
99,395
533,573
632,968
Freehold land with a value of £7,220 (2023 - £7,220) has not been depreciated.
12
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
13
999,998
999,998
Listed investments
3,862,490
3,585,304
4,862,488
4,585,302
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 METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
12
Fixed asset investments
(Continued)
- 20 -
Movements in fixed asset investments
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 1 April 2023
999,998
3,585,304
4,585,302
Additions
-
27,365
27,365
Valuation changes
-
249,821
249,821
At 31 March 2024
999,998
3,862,490
4,862,488
Carrying amount
At 31 March 2024
999,998
3,862,490
4,862,488
At 31 March 2023
999,998
3,585,304
4,585,302
13
Subsidiaries
These financial statements are separate company financial statements for Highland Metals Limited.
Details of the company's subsidiaries at 31 March 2024 are as follows:
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Highland Colour Coaters Limited
See below
Galvanizing services
Preference
100.00
-
Highland Colour Coaters Limited
See below
Galvanizing services
Ordinary
98.00
-
Highland Galvanizers Limited
See below
Dormant
Ordinary
-
98.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Highland Colour Coaters Limited
4,666,372
847,955
Highland Galvanizers Limited
100
The registered address of the subsidiaries is Pinefield Industrial Estate, Elgin, IV30 6FG.
The shareholding in Highland Galvanizers Limited is held by Highland Colour Coaters Limited.
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
14
Stocks
2024
2023
£
£
Raw materials and consumables
571,247
598,949
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
879,385
750,361
Amounts owed by group undertakings
52,007
Other debtors
117,781
107,752
997,166
910,120
16
Current asset investments
2024
2023
£
£
Short term deposits
3,000,000
17
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
214,664
235,607
Amounts owed to group undertakings
164,916
Corporation tax
219,981
728
Other taxation and social security
172,832
126,059
Other creditors
670,251
425,309
1,442,644
787,703
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
18
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
2024
2023
Balances:
£
£
Accelerated capital allowances
109,741
108,117
Capital gains
123,846
43,834
Other timing differences
(72,403)
(43,558)
161,184
108,393
2024
Movements in the year:
£
Liability at 1 April 2023
108,393
Charge to profit or loss
52,791
Liability at 31 March 2024
161,184
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
155,460
60,504
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.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
27,501
27,501
27,501
27,501
21
Capital redemption reserve
2024
2023
£
£
At the beginning and end of the year
94,999
94,999
The capital redemption reserve records the nominal value of shares repurchased by the company.
HIGHLAND METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
22
Related party transactions
The company has taken advantage of the exemption available within FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
23
Ultimate controlling party
The ultimate parent company and controlling party is Highland Metal Developments Limited. Highland Metal Developments Limited heads the only group for which consolidated financial statements have been prepared. Copies of these results are publicly available and can be obtained from the Registrar of Companies at Companies House using https://find-and-update.company-information.service.gov.uk/.
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