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Registered number: 00669551 HMG Paints Limited Annual Report and Financial Statements For the Year Ended 30 September 2025
HMG Paints Limited Company Information
Directors | D P Cleary
| S P Crossman
| J S Falder
| J S Falder
| S P Hutton
| M D Jennings
Company secretary | R L Bristow
Registered number | 00669551
Registered office | Riverside Works
| Collyhurst Road
| Manchester
| M40 7RU
Independent auditors | Hurst Accountants Limited
| Chartered Accountants & Statutory Auditors
| 3 Stockport Exchange
| Railway Road
| Stockport
| SK1 3GG
Bankers | Lloyds Bank Plc
| 42-46 Market Street
| Manchester
| M1 1PW
HMG Paints Limited Contents
| Page
Strategic Report | 1 - 2
Directors' Report | 3 - 4
Independent Auditors' Report | 5 - 8
Statement of Comprehensive Income | 9
Balance Sheet | 10
Statement of Changes in Equity | 11
Notes to the Financial Statements | 12 - 27
HMG Paints Limited Strategic Report For the Year Ended 30 September 2025
Introduction
The directors present their Strategic Report for the year ended 30 September 2025.
Business review
During a year of continued economic uncertainty, fuelled by increased labour costs as a result of the rise in National Insurance contributions and the minimum wage, the Company once again demonstrated its agility and adaptability in further diversifying its product range and managing to secure several new contracts, which strengthened our customer base. By continuing to monitor costs and prices throughout this challenging year, the Company was able to navigate through the difficult macro-economic environment, suceeding in increasing turnover and reporting an improvement in gross margin, which is reflected in these results. Considering the unstable economic conditions, turnover and profitability are deemed by the Board to be acceptable given the challenges faced by the Company through the year. HMG Paints Limited maintains a strategy of long-term business, at the heart of which is the aim of building security for all the company stakeholders. During 2024/25, the Company has continued to maintain its performance in line with those objectives. The Company has continued to invest heavily in the health and safety, technical training, and development of our people, along with the continuous enhancement of our working environment. Indeed, in the year, the Company invested £1.35 million in capital improvements throughout the business. Overall, as the Company approaches its 95th anniversary, we are satisfied with the performance of the business throughout 2024/25 and we believe that, because of the continued investment, we are well positioned to embrace the challenges which the financial year 2025/26 will bring.
Financial key performance indicators
The key performance indicators that are monitored on a weekly, monthly, and annual basis are revenue, profit, and cash balances, all of which are derived from the financial statements. The revenue and profit figures are stated below:
| 2025 | 2024
| £000 | £000
Revenue | 27,745 | 26,249
Gross profit | 12,613 | 11,328
Operating profit | 2,390 | 1,913
The results were acceptable throughout the year and the performance was in line with our budgeted expectations. Page 1
HMG Paints Limited Strategic Report (continued) For the Year Ended 30 September 2025
Principal risks and uncertainties
The Company’s activities expose it to several financial risks, including credit risk and liquidity risk. The factors described below highlight risks and uncertainties which affect the Company, but they are not intended to be an exhaustive analysis of all the potential risks which may arise in the ordinary course of business. The directors are of the opinion that sufficient internal controls have been implemented to monitor these factors and to enable timely management action to be taken to mitigate the risks. Political risk The wars in Ukraine and the Middle East, plus the departure of the UK from the European Union, continue to represent a period of uncertainty for the business as our supply chain relies heavily on materials from the EU. We are managing this risk by ensuring we have appropriate finance in place should it be needed, as well as increasing levels of stock so that any disruption does not leave us exposed. Financial risk Our financial risk management objectives are to ensure sufficient working capital for the Company and plans remain in line with our expectations. Financial risks are managed through internal management controls, timely and accurate management information and through careful monitoring of sales activity and margins. The Company does not feel it is necessary to hedge its currency or interest rate risk. Credit risk The Company’s principal financial assets comprise cash at bank and in hand, and trade and other receivables. Its credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The Company has a credit insurance policy in place to mitigate the credit risk from trade receivables. Liquidity risk To maintain liquidity and to ensure that sufficient funds are available for ongoing operations and future developments, the Company has a mixture of long term and short-term finance. This report was approved by the board and signed on its behalf.
J S Falder Director
Date: 3 March 2026
Page 2
HMG Paints Limited Directors' Report For the Year Ended 30 September 2025 The directors present their report and the financial statements for the year ended 30 September 2025.
Directors' responsibilities statement
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the company's financial statements and then apply them consistently; ∙make judgments and accounting estimates that are reasonable and prudent; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Results and dividends
The profit for the year, after taxation, amounted to £1,801,577 (2024 - £1,604,291). During the year the directors declared dividends totaling £462,023 (2024: £391,950).
Directors
The directors who served during the year were:
D P Cleary
S P Crossman
J S Falder
J S Falder
S P Hutton
M D Jennings
Environmental matters
The Company will seek to minimise adverse impacts on the environment from its activities, whilst continuing to address health, safety and economic issues. The Company has complied with all applicable legislation and regulations.
Future developments
The directors consider that the forthcoming financial year will be another year of solid performance building further security for all our stakeholders. Page 3
HMG Paints Limited Directors' Report (continued) For the Year Ended 30 September 2025
Research and development activities
The Company will continue to invest heavily in research and development activities in the forthcoming year to ensure that it stays at the forefront of innovation in the coatings industry. The continued investment will enable the business to offer unique innovative products for its customers.
Disclosure of information to auditors
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.
Post balance sheet events
There have been no significant events affecting the Company since the year end.
Auditors
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board and signed on its behalf.
J S Falder Director
Date: 3 March 2026
Page 4
HMG Paints Limited Independent Auditors' Report to the Members of HMG Paints Limited
Opinion
We have audited the financial statements of HMG Paints Limited (the 'company') for the year ended 30 September 2025, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of 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 30 September 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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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 Auditors' 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. Page 5
HMG Paints Limited Independent Auditors' Report to the Members of HMG Paints Limited (continued)
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit: ∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and ∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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 set out on page 3, 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. Page 6
HMG Paints Limited Independent Auditors' Report to the Members of HMG Paints Limited (continued)
Auditors' 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 Auditors' 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: Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: ∙The nature of the industry and sector in which the Company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. ∙The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge if any actual, suspected, or alleged fraud. ∙Supporting documentation relating to the Company's policies and procedures for: °Identifying, evaluating, and complying with laws and regulations. °Detecting and responding to the risks of fraud. ∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. ∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. ∙The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements and Anti-bribery and Corruption. Audit response to risks identified Our procedures to respond to the risks identified included the following: ∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. ∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud. ∙Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities. ∙Enquiring of management about any actual and potential litigation and claims. ∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud. ∙Reading minutes of meetings of those charged with governance. Page 7
HMG Paints Limited Independent Auditors' Report to the Members of HMG Paints Limited (continued) We have also considered the risk of fraud through management override of controls by: ∙Testing the appropriateness of journal entries and other adjustments; we have used data analytics software to run tests designed to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error; ∙Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and ∙Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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. Ryan Tattler (senior statutory auditor) for and on behalf of Hurst Accountants Limited Chartered Accountants & Statutory Auditors 3 Stockport Exchange Railway Road Stockport SK1 3GG 3 March 2026 Page 8
HMG Paints Limited Statement of Comprehensive Income For the Year Ended 30 September 2025
| 2025 | 2024
Note | £ | £
Turnover | 4 | 27,744,934 | 26,248,972
Cost of sales |  | (15,132,002) | (14,920,886)
Gross profit |  | 12,612,932 | 11,328,086
Distribution costs |  | (3,480,364) | (3,232,220)
Administrative expenses |  | (6,924,991) | (6,182,939)
Other operating income | 5 | 182,488 | -
Operating profit | 6 | 2,390,065 | 1,912,927
Interest receivable and similar income | 10 | 51,768 | 50,772
Interest payable and similar expenses | 11 | (8,364) | (2,861)
Profit before tax |  | 2,433,469 | 1,960,838
Tax on profit | 12 | (631,892) | (356,547)
Profit for the financial year |  | 1,801,577 | 1,604,291
There was no other comprehensive income for 2025 (2024:£NIL).
The notes on pages 12 to 27 form part of these financial statements.
Page 9
HMG Paints Limited Registered number: 00669551 Balance Sheet As at 30 September 2025
|  | 2025 |  | 2024
Note |  | £ |  | £
Fixed assets |  |  |  |  |
Tangible assets | 14 |  | 4,536,977 |  | 3,828,175
Current assets |  |  |  |  |
Stocks | 15 | 5,100,969 |  | 4,977,619 |
Debtors: amounts falling due after more than one year | 16 | 36,205 |  | 53,714 |
Debtors: amounts falling due within one year | 16 | 5,850,597 |  | 5,899,577 |
Cash at bank and in hand | 17 | 3,451,282 |  | 3,104,051 |
|  | 14,439,053 |  | 14,034,961 |
Creditors: amounts falling due within one year | 18 | (5,002,167) |  | (5,300,961) |
Net current assets |  |  | 9,436,886 |  | 8,734,000
Total assets less current liabilities |  |  | 13,973,863 |  | 12,562,175
Provisions for liabilities |  |  |  |  |
Deferred tax | 19 |  | (704,688) |  | (632,554)
Net assets |  |  | 13,269,175 |  | 11,929,621
Capital and reserves |  |  |  |  |
Called up share capital | 20 |  | 2,000,000 |  | 2,000,000
Profit and loss account | 21 |  | 11,269,175 |  | 9,929,621
|  |  | 13,269,175 |  | 11,929,621
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
J S Falder
Director
Date: 3 March 2026
The notes on pages 12 to 27 form part of these financial statements. Page 10
HMG Paints Limited Statement of Changes in Equity For the Year Ended 30 September 2025
| Called up share capital | Profit and loss account | Total equity
| £ | £ | £
At 1 October 2024 | 2,000,000 | 9,929,621 | 11,929,621
Comprehensive income for the year |  |  |
Profit for the year | - | 1,801,577 | 1,801,577
Total comprehensive income for the year | - | 1,801,577 | 1,801,577
Dividends: Equity capital | - | (462,023) | (462,023)
At 30 September 2025 | 2,000,000 | 11,269,175 | 13,269,175
Statement of Changes in Equity For the Year Ended 30 September 2024
| Called up share capital | Profit and loss account | Total equity
| £ | £ | £
At 1 October 2023 | 2,000,000 | 8,717,280 | 10,717,280
Comprehensive income for the year |  |  |
Profit for the year | - | 1,604,291 | 1,604,291
Total comprehensive income for the year | - | 1,604,291 | 1,604,291
Dividends: Equity capital | - | (391,950) | (391,950)
At 30 September 2024 | 2,000,000 | 9,929,621 | 11,929,621
| The notes on pages 12 to 27 form part of these financial statements.
Page 11
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
1. | General information
HMG Paints Limited is a private company limited by shares and incorporated in England and Wales. The address of the registered office and principal place of business is Riverside Works, Collyhurst Road, Manchester, M40 7RU. The company's registered number is 00669551. The nature of the Company's operations and its principal activity continues to be the manufacture of paints, surface coatings and related products and services. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3). The following principal accounting policies have been applied:
| 2.2 | Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": ∙the requirements of Section 7 Statement of Cash Flows; ∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); ∙the requirements of Section 33 Related Party Disclosures paragraph 33.7. This information is included in the consolidated financial statements of H. Marcel Guest, Limited as at 30 September 2025 and these financial statements may be obtained from the Registrar.
| 2.3 | Foreign currency translation
Functional and presentation currency The company's functional and presentational currency is GBP. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. Page 12
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025 2.Accounting policies (continued)
| 2.4 | Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised: Sale of goods Revenue from the sale of goods is recognised when all of the following conditions are satisfied: ∙the company has transferred the significant risks and rewards of ownership to the buyer; ∙the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; ∙the amount of revenue can be measured reliably; ∙it is probable that the company will receive the consideration due under the transaction; and ∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
| 2.5 | Operating leases: the company as lessee
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
| 2.6 | Interest income
Interest income is recognised in profit or loss using the effective interest method.
| 2.7 | Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument. Page 13
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025 2.Accounting policies (continued)
| 2.8 | Pensions
Defined contribution pension plan The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the company in independently administered funds. Scheme membership and benefits The company also operates a hybrid arrangement scheme with both benefit and defined contribution elements. The benefits of "director members" are provided on a money purchase basis, but such benefits are restricted to the net assets available, having first made full provision for the benefits of all defined benefit members. The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The company is a participating employer with the principal employer being H. Marcel Guest, Limited, its ultimate parent company.
| 2.9 | Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Page 14
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025 2.Accounting policies (continued)
| 2.10 | Research and development
Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.
| 2.11 | Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, either on a reducing balance basis or a straight-line basis. Depreciation is provided on the following basis:
|  |  |  | Leasehold improvements | - | 10% | reducing balance
|  |  |  | Plant and machinery | - | 15% | reducing balance
|  |  |  | Motor vehicles | - | 25% | reducing balance
|  |  |  | Fixtures and fittings | - | 20% | reducing balance / 33.33% straight line
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
| 2.12 | Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads. At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
| 2.13 | Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
| 2.14 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. Page 15
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025 2.Accounting policies (continued)
| 2.15 | Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
| 2.16 | Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.
| 2.17 | Provisions for liabilities
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties. Increases in provisions are generally charged as an expense to profit or loss.
| 2.18 | Financial instruments
The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments. Basic financial assets Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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. Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments. Impairment of financial assets At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate. Page 16
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025 2.Accounting policies (continued)
| 2.18 | Financial instruments (continued)
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss. Basic 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 the deduction of all its liabilities. Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Derecognition of financial assets Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained. Derecognition of financial liabilities Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.
| 2.19 | Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Page 17
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
3. | Judgements in applying accounting policies and key sources of estimation uncertainty
Preparation of the financial statements requires management to make significant judgements, estimates and assumptions that affect the amounts reported for assets and liabilities at the balance sheet date and amounts reported for revenues and expenses during the year. The nature of estimation means that actual outcomes could be different from those estimates. The items in the financial statements where these judgements and estimates have been made include: Stock provision Stock is reviewed to assess obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in profit and loss, the company makes judgements as to whether there is any observable data indicating that there is future saleability of the product and the estimated net realisable value for such product. Accordingly, provision for impairment is made where net realisable value is less than the cost based on best estimates by the management. The provision for obsolescence of stock is based on the ageing and historical sales pattern. As at 30 September 2025, the value of stock net of provision was £5,100,969 (2024: £4,977,619). Stock valuation and overhead absorption Stock is valued including raw material costs, production labour and an allocation of production related overheads. The overhead calculation is based on a judgement of the production element of certain overheads which may differ from the actual. As at 30 September 2025, the value of labour and overheads in stock was £727,603 (2024: £738,005).
4. | Turnover
The whole of the turnover is attributable to the sale of paint products. Analysis of turnover by country of destination:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| United Kingdom | 26,629,431 | 25,126,695
| Rest of Europe | 1,030,009 | 988,754
| Rest of the World | 85,494 | 133,523
|  | 27,744,934 | 26,248,972
5. | Other operating income
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| R&D expenditure credit | 182,488 | -
Page 18
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
6. | Operating profit
| The operating profit is stated after charging:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Research & development charged as an expense | 8,202 | 18,951
| Depreciation | 636,742 | 576,602
| Exchange differences | 24,724 | 24,666
| Other operating lease rentals | 374,108 | 375,607
| Defined contribution pension cost | 297,044 | 471,992
7. | Auditors' remuneration
| During the year, the company obtained the following services from the company's auditors:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Fees payable to the company's auditors for the audit of the company's financial statements | 31,700 | 29,650
| Fees payable to the company's auditors in connection with the company's pension scheme(s) in respect of: |  |
| The auditing of accounts of the scheme(s) | 8,700 | 8,300
| The company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent company.
Page 19
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
8. | Employees
| Staff costs, including directors' remuneration, were as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Wages and salaries | 7,207,768 | 6,514,684
| Social security costs | 742,558 | 623,380
| Cost of defined contribution scheme | 297,044 | 471,992
|  | 8,247,370 | 7,610,056
| The average monthly number of employees, including the directors, during the year was as follows:
|  |  | 2025 | 2024
|  |  | No. | No.
|  | Production | 78 | 77
|  | Selling and distribution | 75 | 72
|  | Administration | 30 | 31
|  | Maintenance | 18 | 16
|  |  | 201 | 196
9. | Directors' remuneration
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Directors' emoluments | 706,425 | 749,825
| Company contributions to defined contribution pension schemes | 54,118 | 57,961
|  | 760,543 | 807,786
| During the year retirement benefits were accruing to 5 directors (2024 - 6) in respect of defined contribution pension schemes.
| The highest paid director received remuneration of £132,654 (2024 - £119,955).
| The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £15,525 (2024 - £11,278).
| The total accrued pension provision of the highest paid director at 30 September 2025 amounted to £1,164 (2024 - £1,130).
Page 20
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
10. | Interest receivable
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Other interest receivable | 51,768 | 50,772
11. | Interest payable and similar expenses
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Bank interest payable | 1,309 | 1,078
| Other interest payable | 1,634 | 1,783
| Interest on corporation tax | 5,421 | -
|  | 8,364 | 2,861
12. | Taxation
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Corporation tax |  |
| Current tax on profits for the year | 559,758 | 266,636
| Total current tax | 559,758 | 266,636
| Deferred tax |  |
| Origination and reversal of timing differences | 72,134 | 89,911
| Total deferred tax | 72,134 | 89,911
| Tax on profit | 631,892 | 356,547
Page 21
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025 12.Taxation (continued)
| Factors affecting tax charge for the year
| The tax assessed for the year is higher than (2024 - lower than) the standard rate of corporation tax in the UK of 25% (2024 - 25%). The differences are explained below:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Profit on ordinary activities before tax | 2,433,469 | 1,960,838
| Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%) | 608,367 | 490,210
| Effects of: |  |
| Expenses not deductible for tax purposes | 9,170 | 3,175
| Fixed asset timing differences | 14,355 | 14,898
| Adjustment in research and development tax credit leading to a increase/(decrease) in the tax charge | - | (151,736)
| Total tax charge for the year | 631,892 | 356,547
| Factors that may affect future tax charges
There were no factors that may affect future tax charges.
13. | Dividends
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Dividends paid on equity capital | 462,023 | 391,950
Page 22
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
14. | Tangible fixed assets
|  | Leasehold improvements | Plant and machinery | Motor vehicles | Fixtures and fittings | Total
|  | £ | £ | £ | £ | £
| Cost or valuation |  |  |  |  |
| At 1 October 2024 | 2,118,031 | 6,784,931 | 472,063 | 1,362,964 | 10,737,989
| Additions | 629,067 | 674,804 | - | 41,673 | 1,345,544
| At 30 September 2025 | 2,747,098 | 7,459,735 | 472,063 | 1,404,637 | 12,083,533
| Depreciation |  |  |  |  |
| At 1 October 2024 | 703,073 | 4,663,809 | 254,707 | 1,288,225 | 6,909,814
| Charge for the year on owned assets | 158,867 | 364,353 | 62,610 | 50,912 | 636,742
| At 30 September 2025 | 861,940 | 5,028,162 | 317,317 | 1,339,137 | 7,546,556
| Net book value |  |  |  |  |
| At 30 September 2025 | 1,885,158 | 2,431,573 | 154,746 | 65,500 | 4,536,977
| At 30 September 2024 | 1,414,958 | 2,121,122 | 217,356 | 74,739 | 3,828,175
Page 23
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
15. | Stocks
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Raw materials and consumables | 2,909,501 | 2,834,224
| Finished goods and goods for resale | 2,191,468 | 2,143,395
|  | 5,100,969 | 4,977,619
| The carrying value of stocks are stated net of impairment losses totaling £240,673 (2024: £306,291).
16. | Debtors
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Due after more than one year |  |
| Amounts owed by associated undertakings | 36,205 | -
| Other debtors | - | 53,714
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Due within one year |  |
| Trade debtors | 4,388,639 | 4,584,490
| Amounts owed by group undertakings | 980,801 | 488,261
| Amounts owed by associated undertakings | 136,759 | 129,202
| Other debtors | 24,339 | 93,288
| Prepayments and accrued income | 320,059 | 604,336
|  | 5,850,597 | 5,899,577
| Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand. Amounts owed by associated undertakings are unsecured. Interest is charged at 3% per annum on part of the balance, with the remainder interest free. There is no fixed repayment schedule and the balance is repayable no later than 15 January 2027. The loan includes an option to convert the outstanding balance into shares.
17. | Cash and cash equivalents
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Cash at bank and in hand | 3,451,282 | 3,104,051
Page 24
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
18. | Creditors: Amounts falling due within one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Trade creditors | 2,917,152 | 3,384,702
| Amounts owed to group undertakings | 233,878 | 191,415
| Corporation tax | 186,452 | 266,636
| Other taxation and social security | 810,392 | 691,456
| Other creditors | 76,533 | 81,395
| Accruals and deferred income | 777,760 | 685,357
|  | 5,002,167 | 5,300,961
| Amounts owed to group undertakings comprise dividends declared but unpaid at the year end.
19. | Deferred taxation
|  | 2025 | 2024
|  | £ | £
| At beginning of year | (632,554) | (542,643)
| (Charged) to profit or loss | (72,134) | (89,911)
| At end of year | (704,688) | (632,554)
| The provision for deferred taxation is made up as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Accelerated capital allowances | (717,698) | (644,939)
| Other timing differences | 13,010 | 12,385
|  | (704,688) | (632,554)
20. | Share capital
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
|  | Allotted, called up and fully paid |  |
|  | 2,000,000 (2024 - 2,000,000) Ordinary shares of £1.00 each | 2,000,000 | 2,000,000
Page 25
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
21. | Reserves
Profit and loss account The profit and loss account includes all current and prior period retained profits and losses after dividends paid.
22. | Pension commitments
The company operates a defined contribution pension scheme and also a hybrid arrangement with both defined benefit and defined contribution elements. The assets of the schemes are held separately from those of the company in individual independently administered funds. The pension cost charge represents contributions payable by the company to the funds and amounted to £297,044 (2024: £471,992). Contributions totaling £52,038 (2024: £49,543) were payable to the funds at the balance sheet date.
23. | Commitments under operating leases
| At 30 September 2025 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Not later than 1 year | 363,930 | 381,377
| Later than 1 year and not later than 5 years | 375,897 | 651,659
|  | 739,827 | 1,033,036
24. | Directors' advances, credit and guarantees
Included within other debtors falling due within one year at 30 September 2024 was an interest-free loan to a director of £5,000. This was in relation to the purchase of a new car, used by the director for personal and business reasons. The loan was fully repaid during the year, and the balance outstanding at 30 September 2025 was £Nil. Page 26
HMG Paints Limited Notes to the Financial Statements For the Year Ended 30 September 2025
25. | Related party transactions
| The Company has taken advantage of the exemption available under FRS 102 section 33 "Related Party Transactions" not to disclose transactions with other wholly owned group companies. During the year the Company entered into transactions with associates and with other related parties by virtue of common directorships. The Company made sales to an associated company, totalling £281,030 (2024: £210,128). Amounts due from this company at the year end totalled £172,964 (2024: £129,202). The Company made purchases from entities in which a director also holds a directorship totalling £29,814 (2024: £26,047). At the year end, amounts due from related parties by virtue of common directorship totalled £3,176 (2024: 1,890). The directors consider the members of the Company’s operational board, including the statutory directors, to be key management personnel as defined by FRS 102. Total key management personnel remuneration amounted to £2,206,294 for the year, relating to 32 personnel (2024: £2,101,754, personnel:32).
26. | Ultimate parent undertaking and controlling party
The immediate and ultimate parent company is H. Marcel Guest, Limited, a company registered in England and Wales, company number 00251148. The consolidated financial statements of the group are available to the public and may be obtained from H Marcel Guest Limited at Riverside Works, Collyhurst Road, Manchester, M40 7RU. In the opinion of the directors, the ultimate controlling party, by virtue of their shareholding in the ultimate parent company, are the Falder family.
Page 27