DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023 |
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their strategic report for the year ended 31 December 2023.
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.
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 We have all seen draft documentation for the "London Plan" which has had to be withdrawn as the consultancy time limit has now expired.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.
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
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
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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.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
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 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.
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).
The directors who served during the year were:
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.
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LESTER CONTROL SYSTEMS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
There have been no significant events affecting the Company since the year end.
The auditors, CLA Evelyn Partners 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LESTER CONTROL SYSTEMS LIMITED
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 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).
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.
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.
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LESTER CONTROL SYSTEMS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LESTER CONTROL SYSTEMS LIMITED (CONTINUED)
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.
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.
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.
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LESTER CONTROL SYSTEMS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LESTER CONTROL SYSTEMS LIMITED (CONTINUED)
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.
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LESTER CONTROL SYSTEMS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LESTER CONTROL SYSTEMS LIMITED (CONTINUED)
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.
for and on behalf of
Statutory Auditors
Brockbourne House
77 Mount Ephraim
Kent
TN4 8BS
Date:
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 28 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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
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:
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (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:
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
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