Company registration number 01500533 (England and Wales)
HILLS OF LAKELAND LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
HILLS OF LAKELAND LIMITED
COMPANY INFORMATION
Directors
Mr D E Hill
Mr W M Collin
Mr P M Gatty
Mrs B Pryde
Secretary
Mr P M Gatty
Company number
01500533
Registered office
Corby Hill Garage
Corby Hill
Carlisle
CA4 8PL
Auditor
Saint & Co.
Sterling House
Wavell Drive
Rosehill
Carlisle
CA1 2SA
Bankers
Royal Bank of Scotland
151 High Street
Dumfries
DG1 2RA
Solicitors
Burnetts Solicitors
Victoria House
Wavell Drive, Rosehill Industrial Estate
Carlisle
Cumbria
CA1 2ST
HILLS OF LAKELAND LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Statement of financial position
9
Notes to the financial statements
10 - 22
HILLS OF LAKELAND LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2025
- 1 -

The directors present the strategic report for the year ended 31 March 2025.

Principal activities

The principal activities of the company continue to be those of forecourt garage and petrol station proprietors.

Review of the business

The Directors are pleased to report Profits on Ordinary Activities before taxation of £1,066,635 (2024 - £1,266,434).

Sales revenue for the year of £37,302,382 (2024 - £37,423,445) has stayed consistent with the previous year. There was a small increase in fuel volumes by 3.1% (2024 – decrease of 5.8%) although gross profits per litre were slightly down on last year, 10.72% compared with 10.85% in 2024. Forecourt shop sales improved slightly by 3.3% with shop margins at 25.16% (2024 – 24.87%). Direct wage and staff pension costs amounted to £2,335,877 (2024 - £2,124,718) an increase of 9.9%. Overall Gross Profits from Garage and petrol station trading operations amounted to £2,861,385 (2024 - £2,790,848) with profit margins improving to 7.67% (2024 – 7.46%).

Administration Overheads for 2025 amounted to £1,926,177, an increase of £253,560 over the previous year. An increase to light and heat costs of £40,119 were reported this year, our fixed term contract came to an end and therefore we saw a large increase in our electric costs. Rates and water also increased significantly by £43,795 and the remaining increase was largely due to higher management charges of £68,817.

Other operating income in 2025 amounted to £127,166 (2023 - £148,203). This reduction was largely due to the Harvest Scheme Income.

The Company’s financial position at 31 st March 2025 shows Net Assets increasing to £6,661,661 (2024 - £5,932,574) with cash and cash equivalents being £1,122,816 (2024 - £1,281,670).

Dividends paid to the parent company in the year amounted to £55,000 (2024 - £200,000).

Future Developments

The Directors report that trading conditions remain challenging and expect them to continue to be difficult due to increasing business costs and continuing and increasing reduced customer confidence in the UK economy causing our customers to be especially conscious of value for money pricing including offers and deals. Therefore, we expect to continue focusing hard on providing value for money pricing and reducing business costs where possible.

Inflation is continuing higher, and the Government may well continue and possibly increase its tax take from business’s thereby increasing the importance of continuing focus on value for money pricing and reducing costs.

Although the financial background remains bleak, the Directors are confident that they and the business continue to be in a strong financial position and thus better placed than many to withstand future financial pressures.

Principal risks and uncertainties

There has been no change in the risk profile of the Company. The identification of strategic, operational, compliance and financial risks is a key part of the management function. The Company regularly monitors its key risks and reviews its processes and controls to ensure that they are effective. Where appropriate the Company uses third party advisors to monitor compliance. General risks include loss or disruption by a major supplier in respect of fuel or shop deliveries, changes in key personnel, non-compliance with legislation, environmental and health and safety risks.

HILLS OF LAKELAND LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 2 -

On behalf of the board

.............................................
Mr P M Gatty
Director
1 December 2025
HILLS OF LAKELAND LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2025
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2025.

Results and dividends

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

Ordinary dividends were paid amounting to £55,000. 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 D E Hill
Mr W M Collin
Mr P M Gatty
Mrs B Pryde
Statement of directors' responsibilities

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

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

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.

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.

HILLS OF LAKELAND LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 4 -
On behalf of the board
..............................................
Mr P M Gatty
Director
1 December 2025
HILLS OF LAKELAND LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HILLS OF LAKELAND LIMITED
- 5 -
Opinion

We have audited the financial statements of Hills of Lakeland Limited (the 'company') for the year ended 31 March 2025 which comprise the statement of income and retained earnings, the statement of financial position 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 2025 and of its profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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.

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' r eport 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.

HILLS OF LAKELAND LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HILLS OF LAKELAND LIMITED (CONTINUED)
- 6 -
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 identifie d material misstatements in the strategic report or the directors' r eport.

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' r esponsibilities s tatement, 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.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management;

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

HILLS OF LAKELAND LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HILLS OF LAKELAND LIMITED (CONTINUED)
- 7 -

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

- to address the risk of fraud through management bias and override of controls, we:

  - performed analytical procedures to identify any unusual or unexpected relationships;

  - tested journal entries to identify unusual transactions;

  - assessed whether judgements and assumptions made in determining the accounting estimates set out in the accounting policies were indicative of potential bias; and

  - investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- reading the minutes of meetings with those charged with governance;

- enquiring of management as to actual and potential litigation and claims; and

- reviewing correspondence with HMRC, relevant regulators and the company's legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

Lindsay Farrer (Senior Statutory Auditor)
For and on behalf of Saint & Co., Statutory Auditor
Chartered Accountants
Sterling House
Wavell Drive
Rosehill
Carlisle
CA1 2SA
3 December 2025
HILLS OF LAKELAND LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2025
- 8 -
2025
2024
Notes
£
£
Turnover
3
37,302,382
37,423,445
Cost of sales
(34,440,997)
(34,632,597)
Gross profit
2,861,385
2,790,848
Administrative expenses
(1,926,177)
(1,672,617)
Other operating income
127,166
148,203
Operating profit
4
1,062,374
1,266,434
Interest receivable and similar income
6
8,115
-
0
Interest payable and similar expenses
7
(3,854)
-
0
Profit before taxation
1,066,635
1,266,434
Tax on profit
8
(282,548)
(332,444)
Profit for the financial year
784,087
933,990
Retained earnings brought forward
5,931,252
5,197,262
Dividends
9
(55,000)
(200,000)
Retained earnings carried forward
6,660,339
5,931,252

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

The notes on pages 10 to 22 form part of these financial statements.

HILLS OF LAKELAND LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2025
31 March 2025
- 9 -
2025
2024
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,395,081
2,530,634
Investment property
12
210,000
210,000
2,605,081
2,740,634
Current assets
Stocks
13
728,933
692,585
Debtors
14
4,473,165
3,862,161
Cash at bank and in hand
1,122,816
1,281,670
6,324,914
5,836,416
Creditors: amounts falling due within one year
15
(2,159,334)
(2,518,476)
Net current assets
4,165,580
3,317,940
Total assets less current liabilities
6,770,661
6,058,574
Provisions for liabilities
Deferred tax liability
16
109,000
126,000
(109,000)
(126,000)
Net assets
6,661,661
5,932,574
Capital and reserves
Called up share capital
17
982
982
Capital redemption reserve
18
340
340
Profit and loss reserves
19
6,660,339
5,931,252
Total equity
6,661,661
5,932,574

The notes on pages 10 to 22 form part of these financial statements.

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 1 December 2025 and are signed on its behalf by:
..............................................
Mr P M Gatty
Director
Company registration number 01500533 (England and Wales)
HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
- 10 -
1
Accounting policies
Company information

Hills of Lakeland Limited is a private company limited by shares incorporated in England and Wales. The registered office is Corby Hill Garage, Corby Hill, Carlisle, CA4 8PL.

1.1
Basis of preparation

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 a mounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and 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. T he company has therefore taken advantage of e xemptions 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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of HOCH Group Limited. These consolidated financial statements are available from its registered office, Corby Hill Garage, Corby Hill, Carlisle, CA4 8PL..

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.

Hills of Lakeland Limited is a wholly owned subsidiary of HOCH Group Limited and the results of Hills of Lakeland Limited are included in the consolidated financial statements of HOCH Group Limited which are available from Corby Hill Garage, Corby Hill, Carlisle, CA4 8PL.

1.2
Going concern

A true t the time of approving the financial statements, t he directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus t he directors continue to adopt the going concern basis of accounting in preparing the financial statements.

HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 11 -
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.

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. Goodwill is fully amortised.

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.

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 property
2% straight line
Short leasehold property
5% straight line
Plant and machinery
15% reducing balance

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
Investment property

Investment property is initially recorded at cost, which includes purchase price and any directly attributable expenditure.

Investment property is revalued to its fair value at each reporting date and any changes in fair value are recognised in profit or loss.

HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 12 -
1.7
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.

1.8
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.

1.9
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.

HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 13 -
1.10
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 statement of financial position 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.

HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
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 paymen ts 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. A m ounts 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 s ubsequently 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 th r ough 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.

1.11
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.

1.12
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 income statement 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.

HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
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 income statement, 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.

1.13
Leases
As lessee

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 lease s asset are consumed.

2
Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Judgements and estimates are continually evaluated and are based on historical experiences and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have significant risk of causing a material adjustment to the carrying value of assets and liabilities within the next financial year are discussed below:-

(a)Establishing useful economic lives for depreciation purposes of tangible fixed assets

Long-lived assets, consisting primarily of tangible fixed assets, comprise a significant portion of the total fixed assets. The annual depreciation charge depends primarily on the estimated useful economic lives of each type of asset and estimates of residual values. The directors regularly review these assets' useful economic lives and change them as necessary to reflect current thinking o remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on depreciation charges for the period. Details of the depreciation policies based on useful economic lives are included in the accounting policies.

3
Turnover and other revenue
2025
2024
£
£
Turnover analysed by class of business
Sale of goods
37,302,382
37,423,445
HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
3
Turnover and other revenue
(Continued)
- 16 -
2025
2024
£
£
Other revenue
Interest income
8,115
-
Commissions received
82,242
87,140
Rental income arising from investment properties
6,600
6,600
Harvest Scheme income
16,873
31,361
Post Office income
16,513
16,973
Other income
4,938
32,220

The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.

4
Operating profit
2025
2024
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
10,700
10,000
Depreciation of tangible fixed assets
128,425
132,084
Loss/(profit) on disposal of tangible fixed assets
30,255
(208)
Operating lease charges
305,241
202,821
5
Employees

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

2025
2024
Number
Number
Total
0
0

Included in the accounts is £2,335,877 (2024: £2,124,718) relating to gross wages, employers national insurance and pension costs relating to staff used by the company but employed by another group company, Hills of Corby Hill Limited.

6
Interest receivable and similar income
2025
2024
£
£
Interest income
Other interest income
8,115
-
0
HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 17 -
7
Interest payable and similar expenses
2025
2024
£
£
Other interest
3,854
-
0
8
Taxation
2025
2024
£
£
Current tax
UK corporation tax on profits for the current period
299,548
325,444
Deferred tax
Origination and reversal of timing differences
(17,000)
7,000
Total tax charge
282,548
332,444

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:

2025
2024
£
£
Profit before taxation
1,066,635
1,266,434
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%)
266,659
316,609
Tax effect of expenses that are not deductible in determining taxable profit
14,899
14,985
Permanent capital allowances in excess of depreciation
990
(6,150)
Movement in deferred tax
-
0
7,000
Taxation charge for the year
282,548
332,444
9
Dividends
2025
2024
£
£
Final paid
55,000
200,000
HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 18 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2024 and 31 March 2025
170,000
Amortisation and impairment
At 1 April 2024 and 31 March 2025
170,000
Carrying amount
At 31 March 2025
-
0
At 31 March 2024
-
0
11
Tangible fixed assets
Freehold property
Short leasehold property
Plant and machinery
Total
£
£
£
£
Cost
At 1 April 2024
2,732,938
386,987
1,478,211
4,598,136
Additions
-
0
-
0
23,127
23,127
Disposals
-
0
-
0
(234,413)
(234,413)
At 31 March 2025
2,732,938
386,987
1,266,925
4,386,850
Depreciation and impairment
At 1 April 2024
731,472
309,977
1,026,053
2,067,502
Depreciation charged in the year
41,194
18,310
68,921
128,425
Eliminated in respect of disposals
-
0
-
0
(204,158)
(204,158)
At 31 March 2025
772,666
328,287
890,816
1,991,769
Carrying amount
At 31 March 2025
1,960,272
58,700
376,109
2,395,081
At 31 March 2024
2,001,466
77,010
452,158
2,530,634
12
Investment property
2025
£
Fair value
At 1 April 2024 and 31 March 2025
210,000
HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
12
Investment property
(Continued)
- 19 -

The fair value of the investment property has been arrived at on the basis of a valuation carried out at 1 April 2023 by John Taylor Chartered Surveyors, Valuers & Estate Agents who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

The directors do not believe any change in value of the investment property has occurred since the last formal valuation on 1 April 2023.

If investment properties were stated on an historical cost basis rather than a fair value basis, the amounts would have been included as follows:
2025
2024
£
£
Cost
197,903
197,903
Accumulated depreciation
-
-
Carrying amount
197,903
197,903
13
Stocks
2025
2024
£
£
Goods for resale
728,933
692,585
14
Debtors
2025
2024
Amounts falling due within one year:
£
£
Trade debtors
210,717
275,227
Amounts owed by group undertakings
3,956,649
3,303,048
Other debtors
19,483
17,520
Prepayments and accrued income
286,316
266,366
4,473,165
3,862,161
HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 20 -
15
Creditors: amounts falling due within one year
2025
2024
£
£
Trade creditors
1,642,755
1,929,150
Amounts owed to group undertakings
55,000
-
0
Corporation tax
78,067
325,444
Other taxation and social security
223,474
206,804
Other creditors
12,123
15,989
Accruals and deferred income
147,915
41,089
2,159,334
2,518,476
16
Deferred taxation

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

Liabilities
Liabilities
2025
2024
Balances:
£
£
Accelerated capital allowances
108,000
125,000
Revaluations
1,000
1,000
109,000
126,000
2025
Movements in the year:
£
Liability at 1 April 2024
126,000
Credit to profit or loss
(17,000)
Liability at 31 March 2025
109,000

The net amount of deferred tax assets and liabilities that are expected to reverse within one year of the balance sheet date is £17,000 (2024: £14,000) relating to the reversal of existing timing differences on tangible and fixed assets.

17
Share capital
2025
2024
2025
2024
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
982
982
982
982

Ordinary shares have full voting, dividend, capital distribution rights and are not redeemable.

HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 21 -
18
Capital redemption reserve

Capital redemption reserve - This reserve records the nominal value of shares repurchased by the company.

19
Profit and loss reserves

Profit and loss account - This reserve records retained earnings and accumulated losses.

Included within the profit and loss reserve is £12,000 (2024: £11,000) of undistributable reserves relating to the revaluation of investment properties, net of associated deferred tax.

20
Operating lease commitments
As lessee

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

2025
2024
£
£
Within 1 year
191,448
206,448
Years 2-5
98,000
241,000
289,448
447,448
21
Contingencies

At the year end there is a total of £146,676 for deferred consideration payable to Hills of Lakeland Limited by H & H Bakeries Limited for the shares in Gretna Bakery Limited. This is contingent on Gretna Bakery making a profit with the amount receivable in any deferred consideration period being based on a percentage of EBITDA. At the year end the amount receivable for the year ended 31 March 2025 can not be reliably measured and has therefore not been included within accrued income at the end of the year.

22
Related party transactions

The Hills Trust is a self-administered defined benefit pension scheme operated for the benefit of the company directors and senior management.

During the year, rent totalling £188,000 (2024: £98,000) was charged by The Hills Trust. At the balance sheet date £90,000 was included within accruals being the amount owed to The Hills Trust in respect of backdated rent following a rent review.

As a wholly-owned subsidiary undertaking, exemption has been taken from disclosing the related party transactions of the group as the details of the Company are included in the consolidated accounts of the Parent.

23
Ultimate controlling party

The company is a wholly owned subsidiary of HOCH Group Limited. Registered office, Corby Hill Garage, Corby Hill, Carlisle, CA4 8PL, which is incorporated in England and Wales.

HILLS OF LAKELAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
23
Ultimate controlling party
(Continued)
- 22 -

The ultimate controlling party is Mr D Hill throughout the current and previous year. Mr D Hill is a Director and majority shareholder in HOCH Group Limited, the parent company (through his direct and indirect holdings).

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