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01863851







LESTER CONTROL SYSTEMS LIMITED

DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED
31 DECEMBER 2023

































LESTER CONTROL SYSTEMS LIMITED
 
COMPANY INFORMATION


Directors
S Davidson 
B Johnson 
M Turner 
J Bradshaw (appointed 8 April 2024)
B Davidson (appointed 8 April 2024)
B Millen (appointed 8 April 2024)
D Thomas (appointed 8 April 2024)




Company secretary
M J Phillips



Registered number
01863851



Registered office
59 Imperial Way

Croydon

England

CR0 4RR




Independent auditors
CLA Evelyn Partners Limited

Brockbourne House

77 Mount Ephraim

Tunbridge Wells

Kent

TN4 8BS





LESTER CONTROL SYSTEMS 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 - 28


LESTER CONTROL SYSTEMS LIMITED
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their strategic report for the year ended 31 December 2023.

Business review
 
Growth has remained steady throughout 2023 resulting in highest ever turnover. Confidence has returned and there has been signs of many big projects being undertaken by both the Private & Public sector. Turnover increased to £13.0m (2022 - £11.1m) and gross profit margin have returned to a more manageable 32.3% (2022 – 24.0%). These margins have now returned to normal as we have seen material costs stabilize somewhat. 2024 has continued strongly with equally strong margins but recent worries over the cost of living crisis will no doubt have some effect on our market. Our industry remains robust but we still face many challenges in the months to come with ever increasing overseas competition.

Principal risks and uncertainties
 
In managing the company the directors monitor the results against the budget and the previous year through monthly management reports and snapshots of the trading result following each period end. Risk management is an important issue to the company. The key risks to the business include: 
Laws and regulation 
No new legislation has affected our industry so far. We have all seen draft documentation for the "London Plan" which has had to be withdrawn as the consultancy time limit has now expired. There will be close reference to EN 81-76 (Evacuation for Lifts) as a new standard for lift evacuation. Both papers are very much still in "draft format. 
Economic uncertainties 
We operate across a number of market sectors in the UK and are affected by national macro-economic conditions including the effects of Brexit as well as by the investment and spending cycles that exist in many industries. Our spread across differing market sectors helps us to mitigate our exposure to short and medium term economic uncertainties. 

Financial key performance indicators
 
The company regularly reviews a number of financial and non-financial key performance indicators at both board and operational levels. The company carries out monthly detailed reviews of each operational and support function at which all aspects of each business and key performance indicators are reviewed.
                                     
2023                2022
Turnover (£'000's)                                  £12,959              £11,100
Gross profit percentage                                 32.3%            24.0% 
Average number of employees                     93             83
Average turnover per employee (£'000's)              139           133

Page 1

LESTER CONTROL SYSTEMS LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Other key performance indicators
 
The company reviews non-financial KPIs on a regular basis in a number of areas: 
Health and safety - the company aims to achieve remain below year-on-year improvement in accident incidence rate and the Health and Safety Executive benchmark for improvement in the the UK. We have achieved a significant year. 
Customer experience - the company aspires to deliver supporting a high level of customer satisfaction which is sustainable long-term growth in the sector. Feedback key to most of our customers are received during the year demonstrated that fully or mostly satisfied with our services. 
Employee welfare - the company strives to attract and group's employee retain highly motivated, high-performing teams. The group's employee turnover is low.


This report was approved by the board and signed on its behalf.



S Davidson
Director

Date: 24 July 2024

Page 2

LESTER CONTROL SYSTEMS LIMITED
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

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;

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

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 2006They 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 £1,685,665 (2022 - £455,894).

The dividends for the year amount to £149,000 (2022 - £Nil).

Directors

The directors who served during the year were:

S Davidson 
B Johnson 
M Turner 

Future developments

Development is key and is constantly being worked on. Apart from the continual product enhancements and software improvements which are working hard on the next generation of Microprocessor. There is an emphasis on using Safety Critical Components which for compliance will require extreme and rigorous testing. Our Group Destination Control has now been launched and, to date, three sites have been successfully completed.

Page 3

LESTER CONTROL SYSTEMS LIMITED
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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 auditorsCLA Evelyn Partners Limitedwill 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.
 





S Davidson
Director

Date: 24 July 2024

Page 4

LESTER CONTROL SYSTEMS LIMITED
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LESTER CONTROL SYSTEMS LIMITED

Opinion


We have audited the financial statements of Lester Control Systems Limited (the 'Company') for the year ended 31 December 2023, 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 policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 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.


Page 5

LESTER CONTROL SYSTEMS LIMITED
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LESTER CONTROL SYSTEMS LIMITED (CONTINUED)

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.


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

LESTER CONTROL SYSTEMS LIMITED
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LESTER CONTROL SYSTEMS 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:

We obtained a general understanding of the Company’s legal and regulatory framework through enquiry of management concerning their understanding of relevant laws and regulations, the entity’s policies and procedures regarding compliance, and how they identify, evaluate and account for litigation claims. We also drew on our existing understanding of the Company’s industry and regulation. 

We understand that the Company complies with the framework through: 
Outsourcing accounting services, accounts preparation and tax compliance to external experts. 
Subscribing to relevant updates from external experts, and making changes to internal procedures and controls as necessary. 

In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements, which are central to the Company’s ability to conduct its business, and/or where there is a risk that failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the Company: 

The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements.
UK taxation law.

The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. The areas identified in this discussion were: 
Revenue recognition, in particular cut-off and completeness, which is an inherent risk common to owner
managed companies. 
Manipulation of the financial statements, especially transactions with directors and management override,
via fraudulent journal entries, particularly as the size of the company means that there is little opportunity
for segregation of duties. 

The procedures we carried out to gain evidence in the above areas included:
Challenging management regarding the nature and appropriateness of unexpected or unusual accounting
adjustments. 
Substantive testing on material areas affecting timing of and completeness of revenue postings. 
Testing journal entries, focusing particularly on postings to unexpected or unusual accounts and those
posted at unusual times. 

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.


Page 7

LESTER CONTROL SYSTEMS LIMITED
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LESTER CONTROL SYSTEMS LIMITED (CONTINUED)

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 2006Our 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.





Matthew Neill BA (Hons) MA FCA (Senior Statutory Auditor)
  
for and on behalf of
CLA Evelyn Partners Limited
 
Statutory Auditors
  
Brockbourne House
77 Mount Ephraim
Tunbridge Wells
Kent
TN4 8BS

Date: 25 July 2024
Page 8

LESTER CONTROL SYSTEMS LIMITED
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
12,959,559
11,100,652

Cost of sales
  
(9,018,596)
(8,437,019)

Exceptional cost of sales
 13 
247,474
-

Gross profit
  
4,188,437
2,663,633

Administrative expenses
  
(2,352,369)
(2,089,112)

Exceptional administrative expenses
 13 
160,000
-

Other operating income
  
1,204
7,053

Fair value movements
  
977
(78,786)

Other operating charges
  
(15,944)
(16,053)

Operating profit
 5 
1,982,305
486,735

Income from fixed assets investments
  
7,155
9,239

Amounts written off investments
  
4,558
(51,043)

Interest receivable and similar income
 10 
79,198
10,963

Profit before tax
  
2,073,216
455,894

Tax on profit
  
(387,551)
-

Profit for the financial year
  
1,685,665
455,894

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 12 to 28 form part of these financial statements.

Page 9

LESTER CONTROL SYSTEMS LIMITED
REGISTERED NUMBER:01863851

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 14 
21,319
22,394

Tangible assets
 15 
130,599
129,067

Investments
 16 
261,044
985,286

  
412,962
1,136,747

Current assets
  

Stocks
 17 
1,627,774
1,560,991

Debtors: amounts falling due within one year
 18 
2,017,340
2,085,318

Bank and cash balances
  
4,813,776
2,666,770

  
8,458,890
6,313,079

Creditors: amounts falling due within one year
 19 
(2,517,394)
(2,530,929)

Net current assets
  
 
 
5,941,496
 
 
3,782,150

Total assets less current liabilities
  
6,354,458
4,918,897

Provisions for liabilities
  

Deferred tax
 20 
(4,685)
(28,286)

Other provisions
 21 
(234,534)
(312,037)

  
 
 
(239,219)
 
 
(340,323)

Net assets
  
6,115,239
4,578,574


Capital and reserves
  

Called up share capital 
 22 
50,000
50,000

Profit and loss account
 23 
6,065,239
4,528,574

  
6,115,239
4,578,574


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


S Davidson
Director

Date: 24 July 2024

The notes on pages 12 to 28 form part of these financial statements.

Page 10

LESTER CONTROL SYSTEMS LIMITED

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
50,000
4,072,680
4,122,680


Comprehensive income for the year

Profit for the year
-
455,894
455,894



At 1 January 2023
50,000
4,528,574
4,578,574


Comprehensive income for the year

Profit for the year
-
1,685,665
1,685,665

Dividends
-
(149,000)
(149,000)


At 31 December 2023
50,000
6,065,239
6,115,239


The notes on pages 12 to 28 form part of these financial statements.

Page 11

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Lester Control Systems Limited is a private company, limited by shares, registered in England and Wales. The company's registered number is 01863851 and registered office address is 59 Imperial Way, Croydon, England, CRO 4RR. 
The principal activity of the company is that of manufacture and supply of lift control equipment.

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 judgment 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 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Lester Controls Systems (Holdings) Limited as at 31 December 2023 and these financial statements may be obtained from Companies House.

Page 12

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
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.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

 
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.

Revenue of sale of goods are therefore recognised when the goods have been despatched.
Revenue received in respect of deposits are fully refundable until the goods have entered the design and build phase. Where an order is cancelled part way through, the amount of unfinished work in progress is deemed refundable on the deposit.
Page 13

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.4
Revenue (continued)

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract 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.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
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.

 
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.

Page 14

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
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.

 
2.10

 Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

 
2.11

 Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Software
-
4
years

 
2.12

 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.

Page 15

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.12
 Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.

Depreciation is provided on the following basis:

Plant and machinery
-
25%
on reducing balance
Motor vehicles
-
25%
on reducing balance
Fixtures and fittings
-
25%
on reducing balance
Office equipment
-
25%
on reducing balance
Computer equipment
-
25%
on reducing balance

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.

 
2.13

 Valuation of investments

Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.

 
2.14

 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.

 
2.15

 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.

 
2.16

 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 16

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.17

 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.

 
2.18

 Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.

 
2.19

 Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

Page 17

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.19
 Financial instruments (continued)

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.

 
2.20

 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.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the Company's accounting policies, the Directors are required to make judgements, estimates and assumption about the carrying values of assets and liabilities that are not readily apparent from other sources. 
The estimates and associated assumptions are based on historical experiences and other factors that are considered relevant. Actual results may differ from these estimates. 
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. 
The key assumptions and other key sources of uncertainty that have a significant effect of the amount recognised in the financial statements are described below: 
Warranty provisions 
Provisions for damaged or faulty products are calculated and provided for based on historic trends, management's knowledge of products and technological improvements in components. The directors have concluded that the valuations of provisions are appropriate. 
WIP valuation
Work in progress within stock is estimated at: 60% of the final sales value whilst being assembled; 62% once production is complete; and 68% once the product is tested and awaiting delivery. These estimates broadly reflect gross profit margins on the products.

Page 18

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Turnover
12,959,559
11,100,652


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
12,431,663
10,362,004

Rest of Europe
527,896
737,195

Rest of the world
-
1,453

12,959,559
11,100,652



5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Exchange differences
1,396
15,878

Other operating lease rentals
263,238
249,471

Depreciation
57,735
70,999


6.


Auditors' remuneration

2023
2022
£
£


Fees payable to the Company's auditors in respect of the audit of the Company's financial statements
16,500
36,900

Page 19

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
3,807,077
3,336,775

Social security costs
390,670
364,703

Cost of defined contribution scheme
193,784
189,071

4,391,531
3,890,549


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Employees
93
83


8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
406,950
402,350

Company contributions to defined contribution pension schemes
96,200
67,933

503,150
470,283


During the year retirement benefits were accruing to 2 directors (2022 - 2) in respect of defined contribution pension schemes.

The highest-paid director received remuneration of £152,950 (2022 - £145,500).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £7,250.


9.


Income from investments

2023
2022
£
£



Income from current asset investments
7,155
9,239




Page 20

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Interest receivable

2023
2022
£
£


Other interest receivable
79,198
10,963


11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
411,152
-


Origination and reversal of timing differences
(23,601)
-


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
2,073,216
455,894


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
487,632
86,620

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
10,890
22,360

Capital allowances for year in excess of depreciation
(11,351)
(4,874)

Increase or decrease in pension fund prepayment leading to an increase (decrease) in tax
-
2,023

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
(96,193)
(120,339)

Chargeble gains
9,607
-

Changes in provisions leading to an increase (decrease) in the tax charge
(829)
9,500

Dividends from UK companies
(2,615)
(1,755)

Movement in deferred tax not recognised
(9,590)
-

Group relief
-
6,465

Total tax charge for the year
387,551
-

Page 21

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Dividends

2023
2022
£
£


Dividends
149,000
-


13.


Exceptional items

2023
£


Reversal of dilapidation provision
(160,000)

Repayment of employer's National Insurance contributions
(247,474)

The above repayment of employer's National Insurance contributions is a correction of an adjustment which was presented in the director's loan account for the year ended 31 December 2021.


14.


Intangible assets




Computer software

£



Cost


At 1 January 2023
85,640


Additions
18,270



At 31 December 2023

103,910



Amortisation


At 1 January 2023
63,246


Charge for the year on owned assets
19,345



At 31 December 2023

82,591



Net book value



At 31 December 2023
21,319



At 31 December 2022
22,394



Page 22

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Tangible fixed assets





Plant and machinery
Motor vehicles
Office equipment
Total

£
£
£
£



Cost or valuation


At 1 January 2023
305,695
43,901
27,519
377,115


Additions
2,500
59,450
3,626
65,576


Disposals
-
(17,401)
-
(17,401)



At 31 December 2023

308,195
85,950
31,145
425,290



Depreciation


At 1 January 2023
192,623
39,604
15,821
248,048


Charge for the year on owned assets
37,609
15,627
4,499
57,735


Disposals
-
(11,092)
-
(11,092)



At 31 December 2023

230,232
44,139
20,320
294,691



Net book value



At 31 December 2023
77,963
41,811
10,825
130,599



At 31 December 2022
113,072
4,297
11,698
129,067

Page 23

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Fixed asset investments





Unlisted investments
Other fixed asset investments
Total

£
£
£



Cost or valuation


At 1 January 2023
100,000
985,286
1,085,286


Additions
-
379,287
379,287


Disposals
-
(1,104,506)
(1,104,506)


Revaluations
-
977
977



At 31 December 2023

100,000
261,044
361,044



Impairment


At 1 January 2023
100,000
-
100,000



At 31 December 2023

100,000
-
100,000



Net book value



At 31 December 2023
-
261,044
261,044



At 31 December 2022
-
985,286
985,286

All other fixed asset investments were disposed of after the year-end.


17.


Stocks

2023
2022
£
£

Raw materials and consumables
1,326,811
1,322,696

Work in progress
300,963
238,295

1,627,774
1,560,991


Page 24

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Debtors

2023
2022
£
£


Trade debtors
1,707,754
1,826,439

Amounts owed by group undertakings
10,009
2,809

Other debtors
123,561
86,801

Prepayments and accrued income
176,016
169,269

2,017,340
2,085,318



19.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
1,257,831
1,703,512

Corporation tax
411,152
-

Other taxation and social security
516,686
406,264

Other creditors
197,209
415,253

Accruals and deferred income
134,516
5,900

2,517,394
2,530,929



20.


Deferred taxation




2023


£






At beginning of year
(28,286)


Charged to profit or loss
23,601



At end of year
(4,685)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(4,685)
(28,286)

Page 25

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Provisions




Warranty provisions
Dilap-idations
Total

£
£
£





At 1 January 2023
152,037
160,000
312,037


Charged to profit or loss
82,497
-
82,497


Released in year
-
(160,000)
(160,000)



At 31 December 2023
234,534
-
234,534


22.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



50,000 (2022 - 50,000) Ordinary shares of £1.00 each
50,000
50,000



23.


Reserves

Profit and loss account

Retained earnings records the company's accumulated profits and losses up to the balance sheet date.


24.


Capital commitments


At 31 December 2023 the Company had capital commitments as follows:

2023
2022
£
£


Contracted for but not provided in these financial statements
51,156
-

The Company has entered into a website and system contract for a value of £73,080, of which £51,156 is payable after the year end. 

Page 26

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

25.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
216,438
151,500

Later than 1 year and not later than 5 years
763,955
606,000

Later than 5 years
429,250
606,000

1,409,643
1,363,500


26.Other financial commitments and guarantees

The Company has a Bonds, Guarantees, Indemnities & Standby LC's facility of £60,000.
Barclays Bank Plc holds a guarantee for £60,000 on the Company's account in favour of HMRC.


27.


Transactions with directors

2023
2022
        £
        £

Balance brought forward

(231,957)

(165,253)

Advances in the year

278,917

(66,704)

Repayments in the year

-

-

Balance carried forward

46,960

(231,957)


Amounts due from the directors are held within other debtors and are interest-free and repayable on demand.


28.


Related party transactions

The Company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", not to disclose related party transactions with wholly owned subsidiaries within the group. 
At the balance sheet date, £Nil (2022: £242,913) was due to the directors.
At the balance sheet date the company was owed £7,250 (2022:£50) by a fellow subsidiary which is not wholly owned. During the year, the company made sales of £6,000 (2022: £Nil) to this subsidiary.
Key management personnel received remuneration totalling £1,059,209 (2022: £1,084,479).
Close family members of key management personnel received remuneration of £193,505 (2022: £190,010), which is higher than the market-rate for their roles.

Page 27

LESTER CONTROL SYSTEMS LIMITED
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

29.


Controlling party

The immediate parent company is Lester Control Systems (Holdings) Limited. The ultimate controlling party is Mr S Davidson, a director. 
Lester Control Systems (Holdings) Limited is the parent company of the smallest and largest group for which consolidated accounts are prepared and of which Lester Control Systems Limited are included. The financial statements of Lester Control Systems (Holdings) Limited are publicly available and can be obtained from Companies House.

 
Page 28