Company registration number SC592846 (Scotland)
LHSL 1 Limited
Annual report and consolidated financial statements
for the year ended 30 September 2024
LHSL 1 Limited
Company information
Directors
GE Low
GDA Low
(Appointed 14 November 2024)
Company number
SC592846
Registered office
10 Euclid Crescent
Dundee
DD1 1AG
Auditor
Henderson Loggie LLP
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Bankers
Virgin Money
7/8 High Street
Dundee
DD1 1SS
Solicitors
Blackadders LLP
10 Euclid Crescent
Dundee
DD1 1AG
LHSL 1 Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Company statement of cash flows
14
Notes to the financial statements
15 - 35
LHSL 1 Limited
Strategic report
for the year ended 30 September 2024
- 1 -

The Director presents the strategic report for the year ended 30 September 202 4.

Review of the business

The Director is pleased with the performance of the group for the year ended 30 September 2024. Both subsidiaries reported strong profits, resulting in improved balance sheet positions at the year end.

The roof truss business has performed well with the company reporting a pre-tax profit of £1.18m (2023 - £1.73m) from a turnover of £11.1m (2023 - £13.0m).

Despite ongoing challenging conditions in the construction sector, the business ended the year with a strong balance sheet which will see the business through any potential slow-down in the construction market.

The business continues to reinvest in new plant and machinery, modernising the factory and ensuring continued improvements in productivity, efficiency and the quality of its end products.

The commercial property investment business has performed well making a pre-tax profit of £833k (2023 - £346k) from a turnover of £1.40m (2023 - £1.27m). The results delivered are within expectations based on the lease agreements in place for the company’s portfolio of investment properties and associated overheads of running the business.

Going forward, the results delivered over this and the previous financial period would be expected to be maintained.

Given the strong cash reserves and balance sheet position presented in these financial statements, coupled with strong post year end performance, both businesses are well placed to work through any downturn in activity.

Principal risks and uncertainties

The principal risks and uncertainties facing the company, as well as mitigation are:

Market Risk
The strength of the construction and commercial property rental sectors in Scotland, as this accounts for almost all revenue. The roof truss business maintains strong relations with key customers and aims to deal with a diverse product mix and range of customer types across the country. The commercial property investment business also maintains strong relationships with tenants.

Competitive Risk
The business operates in a highly competitive market. The roof truss business continues to invest in new machinery, improving productivity, cutting down on waste and becoming more efficient in an effort to maintain a competitive advantage in the market. The commercial property investment business also maintains a geographical diversified property portfolio and ensures the type of property and tenants leads to a relatively lower risk profile.

Supply Chain Risk
The roof truss business is exposed to timber and metal commodity price risk and the market is continually monitored to ensure product availability and pricing remains at commercial levels, particularly when global demand for these products remains strong. The business continues to trade with key long standing suppliers, which reduces risk for both parties.

Credit Risk
The group has implemented a policy that requires credit checks on all new and existing customers. Credit limits are regularly reviewed by the board, and the company maintains strong relationships with key customers and tenants.

LHSL 1 Limited
Strategic report (continued)
for the year ended 30 September 2024
- 2 -
Development and performance

Key areas of strategic development and performance of the group include:

Roof truss business
Continued investment in new modern plant and machinery has enabled the business to increase its productivity, expand its presence in Scotland and improve the quality of finished goods, which puts the company in a strong position going forward.

The business has generated strong cashflows during the year, and ends the year with a strong balance sheet with no borrowings. Therefore, in the opinion of the Director the business is well placed to weather any volatility within the construction sector.

Commercial property investment business
The business has generated strong cashflows during the year and ends the year with a strong balance sheet with no borrowings. Therefore, in the opinion of the Director, the business is well placed to weather any volatility within the investment property market. The Director will continue to monitor ongoing opportunities for investment to further enhance the company’s performance.

For both subsidiaries, the Director will continue to monitor ongoing opportunities for investment to further enhance their performance.

Key performance indicators

Key financial performance indicators include the monitoring of the management of profitability and working capital.
| 202 4 | 202 3 | Measure
Return on capital | 1 1.0% | 1 2.3% | Profit before tax/net assets
Current ratio | 3.0:1 | 2.9:1 | Current assets:current liabilities
Debtors days | 62 | 51 | Trade debtors/average turnover

On behalf of the board

GE Low
Director
7 February 2025
LHSL 1 Limited
Directors' report
for the year ended 30 September 2024
- 3 -

The Directors present their annual report and financial statements for the year ended 30 September 2024.

Principal activities

The principal activity of the company and group continued to be the holding of investment property and the manufacture and supply of roof trusses to the construction industry.

Results and dividends

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

Ordinary dividends were paid amounting to £50,000. The Directors do not recommend payment of a further dividend.

Ordinary dividends amounting to £60,000 were paid during the year by subsidiary companies to minority interests. The Directors of these subsidiary companies do not recommend payment of a further dividend.

Directors

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

GE Low
GDA Low
(Appointed 14 November 2024)
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Strategic report

Included within the strategic report is an indication of the principal risks and uncertainties including the risks associated with the market conditions, competition, supply chain, and credit risks.

Medium-sized companies exemption

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

On behalf of the board
GE Low
Director
7 February 2025
LHSL 1 Limited
Directors' responsibilities statement
for the year ended 30 September 2024
- 4 -

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the Directors are required to:

- select suitable accounting policies and then apply them consistently;

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

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

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

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

LHSL 1 Limited
Independent auditor's report
to the members of LHSL 1 Limited
- 5 -
Opinion

We have audited the financial statements of LHSL 1 Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

- give a true and fair view of the state of the group's and the parent company's affairs as at 30 September 2024 and of the group's profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

LHSL 1 Limited
Independent auditor's report (continued)
to the members of LHSL 1 Limited
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

- the information given in the strategic report and the Directors' r eport for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- the strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report and the Directors' r eport.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

- the parent company financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of directors' remuneration specified by law are not made.

Responsibilities of Directors

As explained more fully in the Directors' r esponsibilities s tatement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below.

As part of our planning process:

- We enquired of management the systems and controls the group and company have in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. Management informed us that there were no instances of known, suspected or alleged fraud;

- We obtained an understanding of the legal and regulatory frameworks applicable to the group and company. We determined that the following were most relevant: health and safety, membership with relevant bodies, driving hours laws, operating lease terms & conditions, Data Protection Act 2018, employment law regulations, and compliance with the UK Companies Act;

- We considered the incentives and opportunities that exist in the group and company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetrated, and tailored our risk assessment accordingly; and

LHSL 1 Limited
Independent auditor's report (continued)
to the members of LHSL 1 Limited
- 7 -

- Using our knowledge of the group and company, together with the discussions held with management at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

- Enquiries with management about any known or suspected instances of non-compliance with laws and regulations and fraud;

- Confirming no breaches in relation to the terms & conditions of operating lease agreements;

- Reviewing membership and the internal audit report with Certification and Timber Grading;

- Reviewing membership with the Truss Rafter Association;

- Discussions to confirm compliance with driving hours laws;

- Reviewing the nature of legal and professional fees incurred;

- Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to the carrying value of investments, investment properties, tangible fixed assets and stock, the recoverability of debtors, and the valuation of accruals and deferred income; and

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

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

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Blair Davidson (Senior Statutory Auditor)
For and on behalf of Henderson Loggie LLP
7 February 2025
Chartered Accountants
Statutory Auditor
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
LHSL 1 Limited
Group statement of comprehensive income
for the year ended 30 September 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
12,195,584
14,027,343
Cost of sales
(8,209,942)
(9,732,246)
Gross profit
3,985,642
4,295,097
Administrative expenses
(2,267,675)
(2,405,711)
Operating profit
4
1,717,967
1,889,386
Interest receivable and similar income
8
131,663
22,073
Interest payable and similar expenses
9
(2,101)
(2,521)
Profit before taxation
1,847,529
1,908,938
Tax on profit
10
(468,030)
(420,748)
Profit for the financial year
27
1,379,499
1,488,190
Profit for the financial year is attributable to:
- Owner of the parent company
1,114,356
1,083,246
- Non-controlling interests
265,143
404,944
1,379,499
1,488,190
Total comprehensive income for the year is attributable to:
- Owner of the parent company
1,114,356
1,083,246
- Non-controlling interests
265,143
404,944
1,379,499
1,488,190
LHSL 1 Limited
Group balance sheet
as at 30 September 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
13
2,013,817
1,969,830
Investment property
14
8,742,020
8,590,235
10,755,837
10,560,065
Current assets
Stocks
17
522,313
437,260
Debtors
18
2,368,788
2,493,829
Cash at bank and in hand
6,442,612
4,891,301
9,333,713
7,822,390
Creditors: amounts falling due within one year
19
(3,089,307)
(2,674,972)
Net current assets
6,244,406
5,147,418
Total assets less current liabilities
17,000,243
15,707,483
Provisions for liabilities
Deferred tax liability
21
(169,734)
(146,473)
(169,734)
(146,473)
Net assets
16,830,509
15,561,010
Capital and reserves
Called up share capital
23
13,563,900
13,563,900
Revaluation reserve
24
2,183,099
2,183,099
Merger reserve
25
(13,563,600)
(13,563,600)
Distributable profit and loss reserves
27
13,079,473
12,015,117
Equity attributable to owner of the parent company
15,262,872
14,198,516
Non-controlling interests
1,567,637
1,362,494
16,830,509
15,561,010

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

The financial statements were approved by the board of directors and authorised for issue on 7 February 2025 and are signed on its behalf by:
07 February 2025
GE Low
Director
Company registration number SC592846 (Scotland)
LHSL 1 Limited
Company balance sheet
as at 30 September 2024
30 September 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investments
15
10,360,236
10,360,236
Capital and reserves
Called up share capital
23
13,563,900
13,563,900
Non-distributable profits reserve
26
(3,203,664)
(3,203,664)
Total equity
10,360,236
10,360,236

As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £50,000 (2023 - £0 profit).

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

The financial statements were approved by the board of directors and authorised for issue on 7 February 2025 and are signed on its behalf by:
07 February 2025
GE Low
Director
Company registration number SC592846 (Scotland)
LHSL 1 Limited
Group statement of changes in equity
for the year ended 30 September 2024
- 11 -
Share capital
Revaluation reserve
Merger Reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
£
Balance at 1 October 2022
13,563,900
2,183,099
(13,563,600)
10,931,871
13,115,270
1,017,550
14,132,820
Year ended 30 September 2023:
Profit and total comprehensive income
-
-
-
1,083,246
1,083,246
404,944
1,488,190
Dividends
11
-
-
-
-
-
(60,000)
(60,000)
Balance at 30 September 2023
13,563,900
2,183,099
(13,563,600)
12,015,117
14,198,516
1,362,494
15,561,010
Year ended 30 September 2024:
Profit and total comprehensive income
-
-
-
1,114,356
1,114,356
265,143
1,379,499
Dividends
11
-
-
-
(50,000)
(50,000)
(60,000)
(110,000)
Balance at 30 September 2024
13,563,900
2,183,099
(13,563,600)
13,079,473
15,262,872
1,567,637
16,830,509
LHSL 1 Limited
Company statement of changes in equity
for the year ended 30 September 2024
- 12 -
Share capital
Non-distri-butable profits
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 October 2022
13,563,900
3,203,664
-
0
10,360,236
Year ended 30 September 2023:
Profit and total comprehensive income for the year
-
-
-
-
0
Balance at 30 September 2023
13,563,900
(3,203,664)
-
0
10,360,236
Year ended 30 September 2024:
Profit and total comprehensive income
-
-
50,000
50,000
Dividends
11
-
-
(50,000)
(50,000)
Balance at 30 September 2024
13,563,900
(3,203,664)
-
0
10,360,236
LHSL 1 Limited
Group statement of cash flows
for the year ended 30 September 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
34
1,871,352
2,109,582
Interest paid
(2,101)
(2,521)
Income taxes refunded/(paid)
74,692
(147,193)
Net cash inflow from operating activities
1,943,943
1,959,868
Investing activities
Purchase of tangible fixed assets
(239,684)
(275,853)
Purchase of investment property
(151,785)
(224,273)
Amounts received on directors' loan accounts
-
18,764
Interest received
131,663
22,073
Net cash used in investing activities
(259,806)
(459,289)
Financing activities
Payment of finance leases obligations
(22,826)
(27,392)
Dividends paid to equity shareholders
(50,000)
-
0
Dividends paid to non-controlling interests
(60,000)
(60,000)
Net cash used in financing activities
(132,826)
(87,392)
Net increase in cash and cash equivalents
1,551,311
1,413,187
Cash and cash equivalents at beginning of year
4,891,301
3,478,114
Cash and cash equivalents at end of year
6,442,612
4,891,301
LHSL 1 Limited
Company statement of cash flows
for the year ended 30 September 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
33
-
0
-
0
Investing activities
Dividends received
50,000
-
0
Net cash generated from/(used in) investing activities
50,000
-
Financing activities
Dividends paid to equity shareholders
(50,000)
-
Net cash used in financing activities
(50,000)
-
Net increase in cash and cash equivalents
-
-
Cash and cash equivalents at beginning of year
-
0
-
0
Cash and cash equivalents at end of year
-
0
-
0
LHSL 1 Limited
Notes to the group financial statements
for the year ended 30 September 2024
- 15 -
1
Accounting policies
Company information

LHSL 1 Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 10 Euclid Crescent, Dundee, DD1 1AG.

The group consists of LHSL 1 Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary a mounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, t he cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. I nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company LHSL 1 Limited together with all entities controlled by the parent company (its subsidiaries).

All financial statements are made up to 30 September 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 16 -
1.4
Going concern

The financial statements have been prepared on a going concern basis. The directors have considered relevant information, including the financial projections, forecast future cash flows and the impact of subsequent events in making their assessment. The directors have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from rising input costs and the economic conditions in the UK. This analysis also considers the effectiveness of available measures to assist in mitigating the impact.

Based on these assessments and having regard to the resources available to the group, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

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

Rental income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Rental income is accrued on a time basis, by reference to the lease agreement.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is five years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
Tangible fixed assets

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

LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 17 -

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

Freehold land and buildings
2% straight line
Leasehold improvements
10% straight line
Plant and machinery
10% - 25% straight line
Fixtures and fittings
33.3% straight line
Computer equipment
33.3% straight line
Motor vehicles
25% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.8
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value a t the reporting end date. Changes in fair value are recognised in profit or loss.

1.9
Fixed asset investments

I n the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.10
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 18 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.11
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.12
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, and deposits held at call with banks.

1.13
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments' o f FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest m ethod unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 19 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

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

1.14
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.15
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 20 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.16
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17
Retirement benefits

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

1.18
Leases

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

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

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

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 21 -
1.19
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Tangible assets and Investment property values

As part of the year end process the director has made an assessment as to the fair value of land and buildings and investment properties. Whilst no formal valuations have been carried out in the year, the director has a good working knowledge of current market values. Although there is some degree of estimation involved in arriving at the fair values the director is content that any potential differences are wholly immaterial.
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

Carrying value of investments

As detailed in note 1.9, the fixed asset investments in Low Holdings Limited and Kingdom Timber Engineering limited are measured as cost less impairment. Management therefore carry out an annual impairment review in relation to these investments in order to ensure any required write down to the balance is correctly applied. As at 30 September 202 4, no impairment was deemed necessary.

Stock provision

Stock is valued at the lower of cost and net realisable value. Management will write down obsolete and damaged stock items throughout the year but in addition at the year end they will consider whether the stock value is appropriate and where required they will apply a stock provision to bring the value down to net realisable value in line with accounting standards. The provision is calculated by management based on their knowledge of the market they sell to and their products.

LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
2
Judgements and key sources of estimation uncertainty (continued)
- 22 -
Trade debtor recovery

Credit control is an important function within the group which requires management to assess on an ongoing basis the recoverability of amounts due from trade debtors. Where recovery is in doubt management will adequately provide against this debt and will arrive at such conclusions based on internal and external knowledge of that customers performance and "ability to pay". Management adopt a prudent approach to credit control.

Accruals & Deferred income

Management estimate requirements for accruals using post year end information and information available from detailed budgets. This identifies cost and income that are expected to be incurred. Accruals are only released where there is a reasonable expectation that these costs will not be invoiced in the future.

Deferred income relates to rental and recharge invoices which cover a period spanning the year end. Management estimate the deferred income in relation to invoices by pro rating the amounts over the period covered.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Roof trusses
11,050,749
13,046,703
Rental income
1,069,106
921,510
Other income
75,729
59,130
12,195,584
14,027,343
2024
2023
£
£
Other revenue
Interest income
131,663
22,073
4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging:
Depreciation of owned tangible fixed assets
195,697
150,723
Depreciation of tangible fixed assets held under finance leases
-
15,303
Operating lease charges
159,924
136,781
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
- 23 -
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
4,500
4,200
Audit of the financial statements of the company's subsidiaries
17,700
16,625
22,200
20,825
6
Employees

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

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Office and management
20
20
-
-
Sales staff
37
46
-
-
Total
57
66
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
2,167,571
2,257,233
-
0
-
0
Social security costs
222,717
228,481
-
-
Pension costs
88,513
87,484
-
0
-
0
2,478,801
2,573,198
-
0
-
0
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
205,238
167,780
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
7
Directors' remuneration (continued)
- 24 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
205,238
167,780
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
131,663
22,073
9
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
2,101
2,521
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
444,273
404,232
Adjustments in respect of prior periods
496
(7,608)
Total current tax
444,769
396,624
Deferred tax
Origination and reversal of timing differences
23,568
21,646
Adjustment in respect of prior periods
(307)
2,478
Total deferred tax
23,261
24,124
Total tax charge
468,030
420,748
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
10
Taxation (continued)
- 25 -

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

2024
2023
£
£
Profit before taxation
1,847,529
1,908,938
Expected tax charge based on the standard rate of corporation tax in the UK of 25% (2023: 22%)
461,882
420,123
Tax effect of expenses that are not deductible in determining taxable profit
2,362
974
Adjustments in respect of prior years
496
(7,608)
Depreciation on assets not qualifying for tax allowances
6,295
7,283
Adjustments in respect of financial assets
(2,698)
-
0
Deferred tax adjustments in respect of prior years
(307)
2,478
Difference between local corporation and deferred tax rates
-
0
2,592
Super-deduction expenditure adjustment
-
(5,094)
Taxation charge
468,030
420,748

At the Spring Budget 2021, the government announced that the corporation tax main rate for profits would increase to 25%. Following Royal Assent this was enacted from 1 April 2023 and as a result the corporation tax rate effective in the period has been set at 25% (2023 - 22%).

11
Dividends
2024
2023
Recognised as distributions to equity holders:
£
£
Final paid
50,000
-
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
- 26 -
12
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 October 2023 and 30 September 2024
83,973
Amortisation and impairment
At 1 October 2023 and 30 September 2024
83,973
Carrying amount
At 30 September 2024
-
0
At 30 September 2023
-
0
The company had no intangible fixed assets at 30 September 2024 or 30 September 2023.
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
- 27 -
13
Tangible fixed assets
Group
Freehold land and buildings
Leasehold improvements
Plant and machinery
Fixtures and fittings
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 October 2023
1,114,456
567,898
955,622
46,854
51,697
47,779
2,784,306
Additions
-
0
26,136
199,207
2,165
12,176
-
0
239,684
At 30 September 2024
1,114,456
594,034
1,154,829
49,019
63,873
47,779
3,023,990
Depreciation and impairment
At 1 October 2023
108,420
160,766
476,208
34,645
32,446
1,991
814,476
Depreciation charged in the year
22,289
57,742
83,108
9,679
10,934
11,945
195,697
At 30 September 2024
130,709
218,508
559,316
44,324
43,380
13,936
1,010,173
Carrying amount
At 30 September 2024
983,747
375,526
595,513
4,695
20,493
33,843
2,013,817
At 30 September 2023
1,006,036
407,132
479,414
12,209
19,251
45,788
1,969,830
The company had no tangible fixed assets at 30 September 2024 or 30 September 2023.
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
13
Tangible fixed assets (continued)
- 28 -

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

Group
Company
2024
2023
2024
2023
£
£
£
£
Plant and machinery
-
0
85,439
-
0
-
0
14
Investment property
Group
Company
2024
2024
£
£
Fair value
At 1 October 2023 and 30 September 2024
8,590,235
-
Additions through external acquisition
151,785
-
At 30 September 2024
8,742,020
-

Investment property comprises a number of commercial units which the group let out. The fair value of the investment property has been arrived at on the basis of a valuation carried out at May 2018 by Graham & Sibbald Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. Additional purchases of investment property after May 2018 have been initially measured at cost and subsequently measured at Director's valuation.

In the opinion of the Director these valuations still represent an accurate fair value as at 30 September 202 4.

The carrying value of investment properties comprises the following land:

Group
Company
2024
2023
2024
2023
£
£
£
£
Freehold
266,611
266,611
-
-
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
- 29 -
15
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
10,360,236
10,360,236
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 October 2023 and 30 September 2024
10,360,236
Carrying amount
At 30 September 2024
10,360,236
At 30 September 2023
10,360,236
16
Subsidiaries

Details of the company's subsidiaries at 30 September 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Low Holdings (Scotland) Limited
Scotland
Ordinary
100.00
Kingdom Timber Engineering Limited
Scotland
Ordinary
70.00
17
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
479,527
382,789
-
-
Work in progress
42,786
54,471
-
-
522,313
437,260
-
-
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
- 30 -
18
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,079,521
1,952,299
-
0
-
0
Corporation tax recoverable
-
0
240,438
-
0
-
0
Other debtors
151,905
153,224
-
0
-
0
Prepayments and accrued income
137,362
147,868
-
0
-
0
2,368,788
2,493,829
-
-
19
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Obligations under finance leases
20
-
0
22,826
-
0
-
0
Trade creditors
1,694,440
1,549,577
-
0
-
0
Corporation tax payable
279,023
-
0
-
0
-
0
Other taxation and social security
436,146
384,350
-
-
Other creditors
36,245
63,513
-
0
-
0
Accruals and deferred income
643,453
654,706
-
0
-
0
3,089,307
2,674,972
-
0
-
0
20
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
-
0
22,826
-
0
-
0

Finance lease payments represent s rentals payable by the company for certain items of plant and machinery. These were settled during the year, and the l eases include d purchase options at the end of the lease period. No restrictions wer e placed on the use of the assets and t he average lease term was 5 years. All leases wer e on a fixed repayment basis and no arrangements were entered into for contingent rental payments.

These leases were secured against the assets concerned.

LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
- 31 -
21
Deferred taxation

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

Liabilities
Liabilities
2024
2023
Group
£
£
Accelerated capital allowances
139,876
118,716
Revaluations
31,094
31,094
Provisions
(1,236)
(3,337)
169,734
146,473
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 October 2023
146,473
-
Charge to profit or loss
23,261
-
Liability at 30 September 2024
169,734
-

The deferred tax balance in relation to revaluations represents the potential taxation on the revaluation of the investment properties.

22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
88,513
87,484

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
- 32 -
23
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
13,563,900
13,563,900
13,563,900
13,563,900

Each ordinary A share carries one vote and is entitled to participate pari passu with other ordinary A shares in any dividend or capital distribution.

24
Revaluation reserve

Non-distributable reserves represent the revaluation of investment property less any associated deferred tax amounts and are not distributable to shareholders.

25
Merger reserve

The merger reserve represents the investment value of the subsidiaries acquired as part of the de-merger process and subsequent consolidation using merger accounting.

26
Non-distributable profits reserve

The non-distributable profits reserve within the company include prior year downward revaluations on fixed asset investments.

27
Profit and loss reserves

Profit and loss reserves include all current and prior year retained profit and losses.

28
Financial commitments, guarantees and contingent liabilities

Virgin Money has a floating charge over the assets and undertakings of one of the subsidiary companies.

29
Operating lease commitments
Lessee

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

Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
198,719
163,492
-
-
Between two and five years
410,191
288,753
-
-
In over five years
1,751,167
1,770,167
-
-
2,360,077
2,222,412
-
-
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
29
Operating lease commitments (continued)
- 33 -
Lessor

The operating leases represent leases of commercial properties to third parties. The leases are negotiated over terms of 4 - 20 years. All leases include a provision for upward rent reviews on a periodic basis according to prevailing market conditions.

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
1,087,100
1,057,100
-
-
Between two and five years
2,915,838
3,159,088
-
-
In over five years
2,103,028
2,646,878
-
-
6,105,966
6,863,066
-
-
30
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2024
2023
£
£
Aggregate compensation
301,376
353,070
Transactions with related parties

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

Purchase of properties
Services received
2024
2023
2024
2023
£
£
£
£
Group
Other related parties
150,000
-
19,332
24,076

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2024
2023
£
£
Group
Other related parties
90
-
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
30
Related party transactions (continued)
- 34 -

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2024
2023
Balance
Balance
£
£
Group
Other related parties
-
679
31
Directors' transactions
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Director 1 Loan
-
(132)
916
(4,350)
(3,566)
(132)
916
(4,350)
(3,566)
32
Controlling party

The company is controlled by GE Low.

The party with the ultimate control of the group is GE Low.

33
Cash generated from operations - company
2024
2023
£
£
Profit for the year after tax
50,000
-
Adjustments for:
Investment income
(50,000)
-
0
Cash generated from operations
-
-
LHSL 1 Limited
Notes to the group financial statements (continued)
for the year ended 30 September 2024
- 35 -
34
Cash generated from group operations
2024
2023
£
£
Profit for the year after tax
1,379,499
1,488,190
Adjustments for:
Taxation charged
468,030
420,748
Finance costs
2,101
2,521
Investment income
(131,663)
(22,073)
Depreciation and impairment of tangible fixed assets
195,697
166,026
Movements in working capital:
(Increase)/decrease in stocks
(85,053)
53,281
(Increase)/decrease in debtors
(115,397)
905,012
Increase/(decrease) in creditors
158,138
(904,123)
Cash generated from operations
1,871,352
2,109,582
35
Analysis of changes in net funds - company
1 October 2023
Cash flows
30 September 2024
£
£
£
Cash at bank and in hand
-
-
-
-
-
-
36
Analysis of changes in net funds - group
1 October 2023
Cash flows
30 September 2024
£
£
£
Cash at bank and in hand
4,891,301
1,551,311
6,442,612
Obligations under finance leases
(22,826)
22,826
-
4,868,475
1,574,137
6,442,612
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