The directors present the strategic report for the year ended 28 February 2025.

Despite the ongoing challenges affecting the wider industry, the group has maintained strong trading performance throughout the financial year. Our solid foundations in leadership and our reputation for exceptional customer service continue to position us well to navigate the current environment.

Looking ahead, we remain focused on investing for the future. A new router, representing an investment of approximately £1 million, is currently on order and scheduled for installation in early 2026. This upgrade will significantly enhance capacity, efficiency, and resilience within our core vinyl wrapped door production area.

Our e-commerce channel continues to deliver robust results and will soon be further strengthened by the launch of an upgraded website, offering an improved user experience and expanded functionality. Additionally, our recently refreshed suite of marketing literature will support our continued commercial success.

Performance across the business is underpinned by a particularly stable sales team and a loyal wider workforce. While recruitment and retention challenges have been widely reported across many sectors, we have successfully maintained a strong and experienced team. Encouragingly, there are signs that the employment market is shifting back in favour of employers.

We are also preparing for several exciting new product launches, most notably the introduction of flooring, a new category within our range. This will include the prestigious Karndean brand, bringing immediate credibility and access to new customer segments. Furthermore, we plan to explore vertical opportunities within our existing product lines to identify and serve currently underrepresented niches.

The results set out in the profit and loss account show that the turnover for the year ended 28 February 2025 was £33.2 million (2024: £34.4 million). The gross profit margin for the year was 25.01% (2024: 25.8%).

Earnings before exceptional costs, interest, tax, depreciation and amortisation (EBITDA) were £0.7 million (2024: £2.7 million) reflecting continued customer development, performance and cost control.

The group has robust systems in place and continues to work flexibly to be able to react to any changes arising as a result of the current global and domestic situations and their continued impact on the United Kingdom economy.

The group does not actively use financial instruments as part of its financial risk management. The group is exposed to the usual credit and cash flow risks associated with selling on credit and manages this through credit control procedures and where possible insures against such risks. The group finances working capital through retained earnings, an invoice discounting facility, an asset based lending facility and a cash flow loan facility..

The financial position of the group at the year end is considered to be strong by the directors.

On behalf of the board

The directors present their annual report and financial statements for the year ended 28 February 2025.

The company's principal activity since incorporation has been that of a holding company co-ordinating the activities of the subsidiaries.

The principal activity of the group during the year has been that of the manufacture of kitchen units, doors and panel products.

The results for the year are set out on page 7.

Preference dividends were paid amounting to £60,000. The directors do not recommend payment of a final dividend.

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

In accordance with the company's articles, a resolution proposing that Pierce C A Limited be reappointed as auditor of the group will be put at a General Meeting.

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 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 company is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

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:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

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 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.

We have audited the financial statements of Scotfield Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 28 February 2025 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the 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:

• give a true and fair view of the state of the group's and the parent company's affairs as at 28 February 2025 and of the group's loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

• 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.

In the light of the 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 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company 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.

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 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 parent company or to cease operations, or have no realistic alternative but to do so.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

In identifying and assessing risks of material misstatements in respect of irregularities (including fraud) we considered the following:

• The nature of the industry, the group’s control environment, the significant laws and regulations relevant to the group, and the group's policies on detection of fraud;

• Results of our enquiries of management, those charged with governance, and of staff in compliance roles;

• Our review of disclosures included in the financial statements; and

• Engagement team discussions in respect of any potential indicators of non-compliance or fraud.

We have also performed specific procedures to consider the risk of management override and of fraud arising in significant transactions outside the normal course of business.

We did not identify a material risk of non-compliance with laws and regulations or of fraud.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 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.

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,500 (2024 - £3,202,728 profit).

Scotfield Limited ("the company") is a private limited company domiciled and incorporated in England and Wales. The registered office is c/o Hill's Panel Products Limited, Scottfield Road, Oldham, Lancashire, OL8 1LA.

The Group consists of Scotfield Limited and all of its subsidiaries.

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.

The consolidated financial statements incorporate those of Scotfield Limited and all of its subsidiaries (i.e. entities that the Group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the period are consolidated using the purchase method. Their results are incorporated from the date that control passes. All financial statements are made up to 28 February 2025.

All intra-group transactions, 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.

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.

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

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.

The group has an invoice discounting facility, an inventory facility, a plant and machinery loan facility and a cash flow loan facility available to finance trading operations and ongoing capital investment. The directors are not aware of any reasons why these facilities will not be maintained.

As a result the directors have continued to adopt the going concern basis in preparing the financial statements.

Turnover presents amounts receivable for goods and services net of VAT and trade discounts.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of ten years.

Negative goodwill, being the excess of the fair value of net assets acquired over the fair value of the purchase consideration, is capitalised and credited to the profit and loss account over its estimated useful economic life.

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

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

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.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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.

At each reporting period end date, the group 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.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

Stock is valued at the lower of cost and net realisable value on a first in first out (FIFO) basis after making due allowances for obsolete and slow moving stock.

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.

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 and 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, 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, 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.

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.

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.

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 group after deducting all of its 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.

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.

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

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.

The tax expense represents the sum of the tax currently payable and deferred 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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax 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.

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.

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

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

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.

Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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.

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

Their aggregate remuneration comprised:

The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

Preference dividends in arrears total £2,652,098 (2024: £2,652,098).

The holders of the 8% preference shares of £1 each have waived their right to receive the dividends payable on these shares for the year ended 28 February 2025.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Details of the company's subsidiaries at 28 February 2025 are as follows:

Registered office addresses (all UK unless otherwise indicated):

The individual company accounts for Alexlake Limited (company number 12473377), HPP Pinnacle Limited (company number 06550917) and Poolbase Limited (company number 04302760) have not been subject to audit. All of the companies are entitled to the exemption from audit under Section 479A of the Companies Act 2006 relating to subsidiary companies.

Scotfield Limited has guaranteed all the outstanding liabilities to which the above companies are subject to, at 28 February 2025, until such liabilities are satisfied in full. The amount of these liabilities at the balance sheet date was as follows:

Alexlake Limited                 £nil

HPP Pinnacle Limited            £nil

Poolbase Limited                £20

Included within Other debtors for the company are 8% fixed rate secured loan notes of £9,135,039 (2024: £9,135,039) issued by Redbeam Limited.

The holders of the 1,000,000 redeemable preference shares of £1 each in issue have the right to call upon the company to redeem a maximum of 200,000 such shares in any financial year.

Included in Other borrowings are 8% fixed rate secured loan notes of £1,999,999. These loan notes are secured by debentures and guarantees provided over the assets of the group. The loan notes are due for repayment on the tenth anniversary of their issue date - 9 March 2030.

The 8,344,962 8% preference shares of £1 each in issue, reclassified as liabilities, will only be repaid on a liquidation or otherwise of the company.

Dividends accruing on the 8% preference shares of £1 each will only be paid on a liquidation or otherwise of the company.

The invoice discounting advance and other borrowings are secured by a fixed and floating charge provided over the assets of the group.

Other borrowings relate to amounts advanced under an asset based lending facility.

A deed of priority and subordination provides that the floating charges held by the asset based lending facility have priority over the floating charge held by the company's bankers. The floating charges held by the bank have priority over the floating charges held by the holders of the loan note instruments in issue.

Finance lease payments represent rentals payable by the group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Obligations under finance leases are secured on the assets concerned.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The deferred tax liability set out above is expected to reverse within five years and relates to accelerated capital allowances and unrelieved contributions that are expected to mature within the same period.

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.

During the year the company granted options to certain directors of Hill's Panel Products Limited, under the EMI option scheme, to acquire up to 5,100 A Ordinary shares of £1 each in this company for an exercise price of £15.60 per share.

The options can be exercised on an Exit, disposal of the assets or shares in the company or a listing.

The A Ordinary shares rank pari passu with the Ordinary shares.

The assessed fair value of the options granted in the year is £nil.

The holders of the redeemable preference shares and the preference shares have the right to receive notice of all general meetings of the company, but have no right to attend and vote at such meetings. The holders of the ordinary shares have the right to attend and vote at such meetings.

The profits in respect of any financial period shall be applied firstly in paying to the holders of the redeemable preference shares a quarterly cumulative preferential dividend of 6% per annum, secondly in paying any arrears of dividend due, but unpaid in respect of the redeemable preference shares, thirdly in accruing an amount equal to the dividend due, but unpaid on the preference shares and finally in distributing the balance of such profits as the company determines to distribute amongst the holders of the ordinary shares.

On a return of capital on liquidation, capital reduction or otherwise the assets of the company remaining after the payment of its liabilities shall be applied firstly in the payment of any arrears of the preferential dividends, secondly in repaying an amount equal to the amount paid up on the redeemable preference shares, thirdly in repaying an amount equal to the amount paid up on the preference shares including any accrued, but unpaid dividends, fourthly in repaying an amount equal to the amount paid up on the ordinary shares and finally the balance of such assets shall be distributed pro-rata amongst the holders of the ordinary shares.

The holders of the redeemable preference shares have the right to call upon the company to redeem a maximum of 200,000 shares in any financial year.

The redeemable preference shares and the preference shares have been classified as financial liabilities in accordance with the provisions of the Financial Reporting Standard (FRS 102).

The Employee Benefit Trust holds shares for distribution to employees. During a previous period the Trust purchased 25,000 A £1 ordinary shares in the group and the company. In accordance with the provisions of FRS 102 the cost of these shares was deducted from shareholders' funds. The costs of running the Trust are charged to the group's profit and loss account as they occur.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The group has the option to break the lease re Crown Works, Sheffield on 15 September 2027.

Amounts contracted for but not provided in the financial statements:

The remuneration of key management personnel is as follows.

All of the directors of Scotfield Limited are considered to be key management personnel by virtue of their authority and responsibility for planning, directing and controlling the activities of the group.

During the year the group entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The group has declared and paid dividends of £45,000 in respect of its issued £1 redeemable preference share capital after the balance sheet date.

Included in Other debtors in the previous year were loans made by the group to its directors. The total opening balances on these loans was £380,802. In the current year £290,233 has been repaid. The closing balance on the loans was £90,569. No interest has been charged in respect of these loans in the year.

The company is under the control of the directors, S M Hill and M S Hill.