Company registration number 02892430 (England and Wales)
HILL STEELS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
HILL STEELS LIMITED
COMPANY INFORMATION
Directors
Mr David Broadhurst
Mr J J Prescott
Company number
02892430
Registered office
Steel House
Unit 1 , Sovereign Works
Deepdale Lane
Gornal
DY3 2AF
Auditor
Sumer Auditco Limited
The Beehive Building
Beehive Ring Road
Gatwick
Crawley
United Kingdom
RH6 0PA
HILL STEELS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
HILL STEELS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
The directors present the strategic report for the year ended 31 December 2024.
Fair review of the business
The results for the year are set out on page 7. The directors consider the profit achieved on ordinary activities before taxation to be satisfactory.
Principal risks and uncertainties
Competitive pressure is a continuing risk for the company, which could result in a loss of sales to key competitors. The company manages this risk by providing added value services to its customers having fast response times not only in supplying products but also in handling all customers queries and by maintaining strong relationships with customers.
Development and performance
The group’s market has experienced significant demand throughout the year, which we have successfully supported. The group continues to invest heavily in our plant and machinery and asset base, all of which go to maintaining our position within the industry, while continuing to look for opportunities for growth.
Key performance indicators
Mr J J Prescott
Director
22 April 2025
HILL STEELS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Principal activities
The company's principal activity continues to be that of the supply and stockholding of steel.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £1,010,000. 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:
Mr David Broadhurst
Mr J J Prescott
Auditor
The auditor, Sumer Auditco Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 the review of the business and principal risks and uncertainties.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr J J Prescott
Director
22 April 2025
HILL STEELS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HILL STEELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HILL STEELS LIMITED
- 4 -
Opinion
We have audited the financial statements of Hill Steels Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 31 December 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's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HILL STEELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HILL STEELS LIMITED (CONTINUED)
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular regarding stocks and work in progress and the valuation of freehold properties.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
Testing key income lines, in particular cut-off, for evidence of management bias.
Obtaining third party confirmation of material bank and loan balances.
Documenting and verifying all significant related party balances and transactions.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
HILL STEELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HILL STEELS LIMITED (CONTINUED)
- 6 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Mr Martin Bradley FCCA (Senior Statutory Auditor)
For and on behalf of Sumer Auditco Limited, Statutory Auditor
Chartered Accountants
The Beehive Building
Beehive Ring Road
Gatwick
Crawley
RH6 0PA
United Kingdom
2 June 2025
HILL STEELS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
16,433,206
21,904,801
Cost of sales
(12,590,453)
(16,111,817)
Gross profit
3,842,753
5,792,984
Distribution costs
(387,695)
(434,533)
Administrative expenses
(2,637,528)
(2,779,162)
Other operating income
253,100
Operating profit
4
1,070,630
2,579,289
Interest payable and similar expenses
7
1
(205)
Profit before taxation
1,070,631
2,579,084
Tax on profit
8
(279,747)
(635,337)
Profit for the financial year
790,884
1,943,747
Other comprehensive income
Revaluation of tangible fixed assets
1,841,540
Tax relating to other comprehensive income
(460,385)
Total comprehensive income for the year
2,172,039
1,943,747
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HILL STEELS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
10
6,750
Tangible assets
11
5,404,973
3,668,468
5,404,973
3,675,218
Current assets
Stocks
12
4,576,916
5,068,526
Debtors
13
3,037,810
5,243,006
Cash at bank and in hand
3,195,917
1,013,697
10,810,643
11,325,229
Creditors: amounts falling due within one year
14
(1,894,582)
(2,283,470)
Net current assets
8,916,061
9,041,759
Total assets less current liabilities
14,321,034
12,716,977
Provisions for liabilities
Deferred tax liability
15
912,753
470,735
(912,753)
(470,735)
Net assets
13,408,281
12,246,242
Capital and reserves
Called up share capital
17
100
100
Revaluation reserve
2,218,019
836,864
Profit and loss reserves
11,190,162
11,409,278
Total equity
13,408,281
12,246,242
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 22 April 2025 and are signed on its behalf by:
Mr J J Prescott
Director
Company registration number 02892430 (England and Wales)
HILL STEELS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2023
100
836,864
11,075,531
11,912,495
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
1,943,747
1,943,747
Dividends
9
-
-
(1,610,000)
(1,610,000)
Balance at 31 December 2023
100
836,864
11,409,278
12,246,242
Year ended 31 December 2024:
Profit
-
-
790,884
790,884
Other comprehensive income:
Revaluation of tangible fixed assets
-
1,841,540
-
1,841,540
Tax relating to other comprehensive income
-
(460,385)
-
(460,385)
Total comprehensive income
-
1,381,155
790,884
2,172,039
Dividends
9
-
-
(1,010,000)
(1,010,000)
Balance at 31 December 2024
100
2,218,019
11,190,162
13,408,281
HILL STEELS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
3,787,007
2,404,648
Interest paid
1
(205)
Income taxes paid
(519,891)
(805,791)
Net cash inflow from operating activities
3,267,117
1,598,652
Investing activities
Purchase of tangible fixed assets
(105,396)
(401,431)
Proceeds from disposal of tangible fixed assets
30,499
76,964
Net cash used in investing activities
(74,897)
(324,467)
Financing activities
Dividends paid
(1,010,000)
(1,610,000)
Net cash used in financing activities
(1,010,000)
(1,610,000)
Net increase/(decrease) in cash and cash equivalents
2,182,220
(335,815)
Cash and cash equivalents at beginning of year
1,013,697
1,349,512
Cash and cash equivalents at end of year
3,195,917
1,013,697
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 11 -
1
Accounting policies
Company information
Hill Steels Limited is a private company limited by shares incorporated in England and Wales. The registered office is Steel House, Unit 1 , Sovereign Works, Deepdale Lane, Gornal, DY3 2AF.
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 under the historical cost convention. The principal accounting policies adopted are set out below.
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 is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% straight line
Plant and equipment
15% reducing balance
Motor vehicles
25% reducing balance
Livestock
Not currently depreciated
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 profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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 profit or loss. Reversals of impairment losses are also recognised in profit or loss.
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, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 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 initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
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.
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.
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
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 valuation
Stock is shown in these financial statements less a provision for devaluation, as well as provisions for slow moving or obsolete stock. This provision is based on market conditions and directors' judgements. The total provision for devaluation as at 31 December 2024 was £1,525,639 (2023: £1,689,508)
Property valuation
The company's freehold properties are held at their valuation, taking into account the most reliable evidence at each reporting date. The details of any such valuation is shown in note 11 to these financial statements. The total revaluation reserve generated from any such revaluations, including the deferred tax consideration on the revaluation, is £2,218,019 (2023: £836,864), as shown on the balance sheet.
Deferred taxation
Deferred tax is provided on temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets and liabilities are measured at the tax rates that apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
The deferred tax liability as at 31 December 2024 has been calculated based on a 25% tax rate, reflecting the expected timing of reversal of the related temporary differences.
3
Turnover
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
15,911,253
21,130,458
Overseas
521,953
774,343
16,433,206
21,904,801
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
10,500
10,300
Depreciation of owned tangible fixed assets
178,570
221,710
Loss/(profit) on disposal of tangible fixed assets
1,362
(19,539)
Amortisation of intangible assets
6,750
6,750
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production staff
60
63
Administrative staff
24
26
Management staff
2
2
Total
86
91
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,383,626
2,307,929
Social security costs
226,768
206,375
Pension costs
51,804
49,735
2,662,198
2,564,039
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
59,727
47,812
Company pension contributions to defined contribution schemes
3,514
3,501
63,241
51,313
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
7
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Other interest
(1)
205
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
298,114
589,892
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
8
Taxation
2024
2023
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
(18,367)
45,445
Total tax charge
279,747
635,337
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
1,070,631
2,579,084
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
267,658
606,615
Tax effect of expenses that are not deductible in determining taxable profit
10,402
8,994
Permanent capital allowances in excess of depreciation
1,687
2,646
Depreciation on assets not qualifying for tax allowances
17,082
Taxation charge for the year
279,747
635,337
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2024
2023
£
£
Deferred tax arising on:
Revaluation of property
460,385
-
9
Dividends
2024
2023
£
£
Final paid
1,010,000
1,610,000
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2024 and 31 December 2024
82,765
Amortisation and impairment
At 1 January 2024
76,015
Amortisation charged for the year
6,750
At 31 December 2024
82,765
Carrying amount
At 31 December 2024
At 31 December 2023
6,750
11
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Motor vehicles
Livestock
Total
£
£
£
£
£
Cost or valuation
At 1 January 2024
3,631,259
1,769,016
606,558
47,350
6,054,183
Additions
6,621
98,775
105,396
Disposals
(42,477)
(42,477)
Revaluation
2,467,116
2,467,116
At 31 December 2024
6,098,375
1,775,637
662,856
47,350
8,584,218
Depreciation and impairment
At 1 January 2024
939,762
1,152,589
293,364
2,385,715
Depreciation charged in the year
94,079
84,491
178,570
Eliminated in respect of disposals
(10,616)
(10,616)
Revaluation
625,576
625,576
At 31 December 2024
1,565,338
1,246,668
367,239
3,179,245
Carrying amount
At 31 December 2024
4,533,037
528,969
295,617
47,350
5,404,973
At 31 December 2023
2,691,497
616,427
313,194
47,350
3,668,468
The carrying value of land and buildings comprises:
2024
2023
£
£
Freehold
4,533,037
2,691,497
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
11
Tangible fixed assets
(Continued)
- 20 -
The director considers that the difference between the carrying value and market values of freehold land and buildings is not significant.
Livestock are currently not being depreciated.
Land and buildings were revalued in July 2024 by Colliers International Valuation UK LLP, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Freehold property
2024
2023
£
£
Cost
2,237,130
2,237,130
Accumulated depreciation
(592,349)
(547,606)
Carrying value
1,644,781
1,689,524
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
4,576,916
5,068,526
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,630,746
4,117,351
Amounts owed by group undertakings
963,736
Other debtors
44,000
56,000
Prepayments and accrued income
363,064
105,919
3,037,810
5,243,006
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 21 -
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
1,489,190
1,770,692
Amounts owed to group undertakings
75,258
Corporation tax
38,114
259,892
Other taxation and social security
260,707
212,471
Other creditors
194
12
Accruals and deferred income
31,119
40,403
1,894,582
2,283,470
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
173,413
191,780
Revaluations
739,340
278,955
912,753
470,735
2024
Movements in the year:
£
Liability at 1 January 2024
470,735
Credit to profit or loss
(18,367)
Charge to equity
460,385
Liability at 31 December 2024
912,753
Of the deferred tax liability set out above, £36,348 is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period. The deferred tax on revaluations will only be realised when the assets are sold, which is not expected to be within 12 months.
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
51,804
49,735
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.
HILL STEELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
18
Related party transactions
The company has taken advantage of the exemption under paragraph 33.1A of FRS102 relating to subsidiaries where 100% of the voting rights are controlled within the group not to disclose transactions and balances between the company and fellow group undertakings.
19
Ultimate controlling party
The ultimate parent company is Ensen Limited, a company incorporated in England. Its registered office is Steel House, Unit 1, Sovereign Works, Deepdale Lane, Gornal, Dudley, DY3 2AF.
The entity will be consolidated into the accounts of Ensen Limited.
The controlling parties are Mr J J Prescott and Miss F Broadhurst by virtue of their controlling interest in the issued share capital of the ultimate parent company.
20
Cash generated from operations
2024
2023
£
£
Profit after taxation
790,884
1,943,747
Adjustments for:
Taxation charged
279,747
635,337
Finance costs
(1)
205
Loss/(gain) on disposal of tangible fixed assets
1,362
(19,539)
Amortisation and impairment of intangible assets
6,750
6,750
Depreciation and impairment of tangible fixed assets
178,570
221,710
Movements in working capital:
Decrease in stocks
491,610
536,061
Decrease in debtors
2,205,196
53,579
Decrease in creditors
(167,111)
(973,202)
Cash generated from operations
3,787,007
2,404,648
21
Analysis of changes in net funds
1 January 2024
Cash flows
31 December 2024
£
£
£
Cash at bank and in hand
1,013,697
2,182,220
3,195,917
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