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Lothian Electric Machines No. 2 Limited

Registered number: SC382393
Annual report and consolidated financial statements
For the year ended 30 September 2024

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
COMPANY INFORMATION


Director
A R Burgess 




Company secretary
MFMAC Secretaries Limited



Registered number
SC382393



Registered office
1 Hospital Road

Haddington

East Lothian

EH41 3PD




Independent auditor
Forvis Mazars LLP
Chartered Accountants & Statutory Auditor

5th Floor

3 Wellington Place

Leeds

LS1 4AP




Bankers
Lloyds Bank plc
11 & 12 Wellington Place

Leeds

LS1 4AP




Solicitors
Morton Fraser
Quartermile Two

2 Lister Square

Edinburgh

EH3 9GL





 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

CONTENTS



Page
Group Strategic Report
 
1 - 3
Director's Report
 
4 - 7
Independent Auditor's Report
 
8 - 11
Consolidated Statement of Comprehensive Income
 
12
Consolidated Statement of Financial Position
 
13
Company Statement of Financial Position
 
14
Consolidated Statement of Changes in Equity
 
15
Company Statement of Changes in Equity
 
16
Consolidated Statement of Cash Flows
 
17
Notes to the Financial Statements
 
18 - 40


 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024

The director presents the Group Strategic Report for the year ended 30 September 2024.

Business review
 
The principal activity of the Group in the period under review continued to be the manufacture of stairlift carriages.
Financial key performance indicators
Management use a range of performance measures to monitor and manage the business. These are split into financial and non-financial key performance indicators, as set out below:

Financial key performance indicators
 

2024
2023

£
£
Turnover 
42,283,488
46,963,564
Gross profit 
1,561,144
2,516,701
Gross profit margin 
3.7%
5.4%
Operating profit 
(164,373)
924,430
Operating profit margin
(0.4)%
2.0%
Balance sheet net current assets
11,127,445
11,047,881
Balance sheet net assets
12,797,130
13,061,500


Development and financial performance during the year

As reported in the Group’s Statement of Comprehensive Income, turnover decreased from £47.0m to £42.3m in year ended 30 September 2024 due to the decrease in sales volume compared to the previous year.
Gross profit margin decreased during the year from £2.5m to £1.6m (5.4% to 3.7%) as a direct result of the increasing costs of raw materials, global shipping and energy.
Operating margins have also decreased from 2.0% to (0.4)%.

Financial position at the reporting date

Net assets have decreased from £13.1m at the start of the year to £12.8m at the year end. This is primarily due to total comprehensive income for the year of £(0.3)m.

Principal risks and uncertainties

The principal risks and uncertainties facing the Group are as follows:
Operational Risk
The key operational challenge facing the business is to ensure that its supply chain has appropriate depth and breadth of capacity whilst at the same time maintaining component quality. Our technical and purchase teams visit, and audit, both existing and prospective suppliers worldwide to ensure adherence to standards and to facilitate contingency planning should the need arise. Detailed and regular inventory and sales forecast meetings are held with customers and suppliers to ensure the Group remains able to respond to the growth requirements. The Group is accredited to ISO 9001 Quality Management and ISO 14001 Environmental Management.

Page 1

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024


Directors’ Statement of Compliance with duty to promote the success of the Group

The Director considers that for the year ended 30 September 2024 that he has acted in good faith, in order to promote the success of the Group, both in the short and long term, for the benefit of the Group’s shareholders by giving specific regard to a range of matters set out in Section 172(1) as listed below: 
a) The likely consequences of any decision in the long term; 
b) The interests of the Group’s employees; 
c) The need to foster the Group’s business relationships with suppliers, customers and others; 
d) The impact of the Group’s operations on the community and the environment; 
e) The desirability of the Group maintaining a reputation for high standards of business conduct; and 
f) The need to act fairly between members of the Group 
(a) The likely consequences of any decision in the long term;
The Director operates with a layered approach with regards to any decisions being made within the Group and any wider business strategy, whilst retaining a high level of regard for the Group values, culture and the wider community that it may influence. 
Within the Group’s core strategy, it continually seeks to invest in developing its manufacturing products, processes, employees and Group facilities. It will continue to successfully deliver on quality of products and on value to ultimately ensure the success of both the Group and its shareholder.
 
(b) The interests of the Group’s employees;
The Group draws emphasis on the importance of its people and their impact they have in helping deliver the mission; whilst upholding the values of the business. We ensure that the highest standards of training and development are available to all employees and recognise high performance through reward and recognition. 
The Group strives to continue support and build upon the values and culture of our already established business and strongly encourage employee engagement and feedback to the management team.
(c) The need to foster the Group’s business relationship with suppliers, customers and others; 
The Group is driven to deliver upon its core principles in manufacturing high-quality, reliable and safe products which ultimately go on to aid and assist the end users of our goods. We understand and draw emphasis on the importance of the role that key suppliers play in our manufacturing process.
We strive to create and maintain positive, constructive relationships with all businesses within our supply-chain which includes supporting important working partnerships (both domestic and international) to achieve our business objectives and support growth. 
 
Page 2

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024

(d) The impact of the Group’s operations on the community and the environment; 
We are proud to be part of our local, and of wider communities, and acknowledge the role that the Group has played over the years in being a source of local employment which includes offering apprenticeships and internships. We also demonstrate our commitment through donations with various local charities and support employees within our business who wish to raise funds for causes close to them, their families and their local communities.
(e) The desirability of the Group maintaining a reputation for high standards of business conduct; 
We will strive in our pursuit to deliver the highest quality of manufactured product to help support the growth of our key customers.
The Group actively seeks continuous improvement in all factions of the business in order to maintain our high standards and to produce the key deliverables within our core business strategy. 
Our values uphold the integrity of our business; acting responsibly and honestly to deliver on our promises. The ambition in taking pride in all we do and achieve in pushing the business forward in a positive direction. 
All employees receive inductions and appropriate training promoting these values and have access to our handbook which includes the Group’s procedures and codes of conduct, and understand the requirement to comply with high standards of business conduct at all times. 
(f) The need to act fairly as between stakeholders of the Group; 
Our Group actively promotes inter-departmental collaboration on a continual basis in order to achieve our business objectives. We understand the processes involved and importance of acting fairly across all departments and the value of working together as one, organisational team. 
We encourage and support all communication within our core business, subsidiaries and all commonly controlled parties, within a wider Group, to ensure greater value is achieved between all stakeholders. 



This report was approved by the board on 23 May 2025 and signed on its behalf.





A R Burgess
Director

Page 3

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024

The director presents his report and the financial statements for the year ended 30 September 2024.

Director's responsibilities statement

The director is responsible for preparing the Group Strategic Report, the Director's Report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the director to prepare financial statements for each financial year. Under that law the director 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the director is required to:


select suitable accounting policies for the Group'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 Group will continue in business.

The director is 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 the Group and to enable him to ensure that the financial statements comply with the Companies Act 2006He is also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation, amounted to £117,370 (2023 -profit £949,723).

Dividends declared in the financial statements for the financial year amounted to £Nil (2023 - £Nil).

Director

The director who served during the year was:

A R Burgess 


Future developments

The director has a strong commitment to growing the business in the future. The significant capital investment made during the year, and post year-end, should allow the Group to continue to support the ambitious growth plans of its key distribution partners.

Page 4

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024


Research and development activities

The Group continues to invest in research and development to continuously innovate and technologically advance the products of its distribution partners. During the year £180,233 (2023 - £490,812) was spent on research and development projects. 


Qualifying third party indemnity provisions

The Group had Director's and Officers' insurance in place throughout the year.

Streamlined Energy & Carbon Reporting

This report summarises energy usage and associated emissions under the government policy (SECR) as implemented by the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon) Report) Regulations 2018.
Lothian Electric Machines Limited is a UK incorporated business and for the financial year 1st October 2023 to 30th September 2024 is defined as a ‘large’ company under SECR criteria for a reporting year with a turnover of £36 million or more and a balance sheet of £18 million or more and under SECR legislation are mandated to include energy consumption, emissions, and an intensity metric for the most recent financial year.
Utility and Scope                                                    UK Consumption (kWh) 

2023/24
2022/23
Grid Supplied Electricity (scope 2)
1,107,904
1,116,621
Natural Gas (scope 1)
1,419,099
1,408,926
Transportation (scope 1)
5,392
5,757


Utility and Scope                                                 UK Consumption (tCO2e) 

2023/24
2022/23
Grid Supplied Electricity (scope 2)
229.39
215.93
Natural Gas (scope 1)
259.04
257.18
Transportation (scope 1)
1.37
1.55


Intensity Metric                                                     UK Intensity Metric  

2023/24
2022/23
tCO2e per £m of Turnover
11.58
10.11
tCO2e per £m of production
0.0099
0.0083

Reporting Methodology:

CO2e emissions data has been calculated with use of the Government conversion factors for company reporting of greenhouse gas emissions 2024 for the reporting period 01/10/2023 to 30/09/2024 and following government guidance. 

Energy consumptions reports were provided by the energy suppliers for the 12 month period for gas and electricity.   

Transportation fuels were based on historical and available MOT mileage data for the small fleet of 5 company vehicles: 3 company vehicles are full electric with zero emissions and are predominantly charged on site. 2 Company vans are (Class II – Diesel) with total estimated annual business miles of 4,500 which converts to 7,657 kWh. 
Page 5

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024


Energy Efficiency Initiatives & Improvements
The Company has implemented the following:
 
On site recycling area for returned metals, cardboard and plastics in operation. 
Ongoing evaluation of carriage battery refurbishment opportunities with supplier. 
Site buildings lighting upgraded to LED units in 2023-2024. 
New gas boilers for factory and offices fitted in Aug-Sept 2023 to replace old and inefficient units. Expected reduction in gas consumption of between 10 to 15% per annum.
Currently evaluating switch from standard (brown) power and gas to (green) carbon neutral sources.
A suppliers carbon reduction awareness, commitment and activity will be a point of review and consideration as part of a new supplier audit and selection process.
New windows being installed in main office building to support more efficient use of heating and A/C.

Matters covered in the Group Strategic Report

Certain information is not shown in the Directors' Report is shown in the Strategic Report on pages 1 and 2
instead in accordance with Section 414C(11) of the Companies Act 2006. This includes a business review and
principal risks and uncertainties.

Going concern
The financial statements have been prepared on a going concern basis. Having given careful consideration to the anticipated future performance and financial position of the Company and the Group, the Director has not identified any material uncertainties which might cast doubt on the going concern assumption. 
The director has prepared forecasts for a period in excess of 12 months from the date of approval of these financial statements which indicate that the Company and the Group will have sufficient funds to meet their liabilities as they fall due for that period.

Disclosure of information to auditor

The persons who is the director at the time when this Director's Report is approved has confirmed that:
 
so far as he is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and

he 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 and the Group's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditor

The auditor, Forvis Mazars LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 6

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024

This report was approved by the board on 23 May 2025 and signed on its behalf.
 



A R Burgess
Director

Page 7

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

Opinion

We have audited the financial statements of Lothian Electric Machines No.2 Limited (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended 30 September 2024 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statement of Financial Position, the Consolidated and Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, 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 FRS 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 of the Parent Company’s affairs as at 30 September 2024 and of the Group's loss 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 the 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 director's 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 the 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 director 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 director is 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.
Page 8

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:
 
the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Director's 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 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 director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

Page 9

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

Responsibilities of Director

As explained more fully in the Director's Responsibilities Statement set out on page 4, the director is 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 director determines 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 director is responsible for assessing the Group's and 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 Group or the Parent Company or to cease operations, or has 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 the financial statements. 
 
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
 
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. 

Based on our understanding of the Group and the Parent Company and their industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, and health and safety regulation. 

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the group and the parent Company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the Group and the Parent Company which were contrary to applicable laws and regulations, including fraud.  

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.  
Page 10

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to entries in relation to the defined benefit pension scheme, revenue recognition (which we pinpointed to the cut off assertion) and significant one-off or unusual transactions. 

Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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 auditor’s report.

Use of the audit 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.




Christopher Hudson (Senior statutory auditor)

  
for and on behalf of

Forvis Mazars LLP
Chartered Accountants and Statutory Auditor 
5th Floor
3 Wellington Place
Leeds
LS1 4AP

23 May 2025
Page 11

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2024
2023
Note
£
£

  

Turnover
 4 
42,283,488
46,963,564

Cost of sales
  
(40,722,344)
(44,446,863)

Gross profit
  
1,561,144
2,516,701

Administrative expenses
  
(1,725,517)
(1,592,271)

Operating (loss)/profit
 5 
(164,373)
924,430

Interest receivable and similar income
 9 
23,720
-

Net interest on defined benefit pension scheme liability
 10 
47,000
18,000

(Loss)/profit before taxation
  
(93,653)
942,430

Tax on (loss)/profit
 11 
(23,717)
7,293

(Loss)/profit for the financial year
  
(117,370)
949,723

  

Actuarial gains on defined benefit pension scheme
 22 
111,000
345,000

Pension scheme asset ceiling
 22 
(258,000)
(743,000)

Other comprehensive income for the year
  
(147,000)
(398,000)

Total comprehensive income for the year
  
(264,370)
551,723

  

There were no recognised gains and losses for 2024 or 2023 other than those included in the consolidated statement of comprehensive income.

The notes on pages 18 to 40 form part of these financial statements.

Page 12

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
REGISTERED NUMBER: SC382393

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 12 
2,136,617
2,456,841

  
2,136,617
2,456,841

Current assets
  

Stocks
 14 
13,891,873
14,646,551

Debtors: amounts falling due within one year
 15 
2,182,329
2,452,251

Cash at bank and in hand
 16 
469,800
168,956

  
16,544,002
17,267,758

Creditors: amounts falling due within one year
 17 
(5,416,557)
(6,219,877)

Net current assets
  
 
 
11,127,445
 
 
11,047,881

Total assets less current liabilities
  
13,264,062
13,504,722

Provisions for liabilities
  

Deferred taxation
 18 
(466,932)
(443,222)

  
 
 
(466,932)
 
 
(443,222)

Net assets
  
12,797,130
13,061,500


Capital and reserves
  

Called up share capital 
 19 
2,042
2,042

Foreign exchange reserve
 20 
2,809
2,809

Profit and loss account
 20 
12,792,279
13,056,649

  
12,797,130
13,061,500


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 23 May 2025.




A R Burgess
Director

The notes on pages 18 to 40 form part of these financial statements.

Page 13

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
REGISTERED NUMBER: SC382393

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024

2024
2023
Note
£
£

Fixed assets
  

Investments
 13 
2,041
2,041

  
2,041
2,041

Current assets
  

Debtors: amounts falling due within one year
 15 
99,460
99,460

Cash at bank and in hand
 16 
21
21

  
99,481
99,481

Total assets less current liabilities
  
 
 
101,522
 
 
101,522

  

  

Net assets
  
101,522
101,522


Capital and reserves
  

Called up share capital 
 19 
2,042
2,042

Profit and loss account
 20 
99,480
99,480

  
101,522
101,522


The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the Company for the year was £Nil (2023: £Nil).
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 23 May 2025.


A R Burgess
Director

The notes on pages 18 to 40 form part of these financial statements.

Page 14

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024


Called up share capital
Foreign exchange reserve
Profit and loss account
Total equity

£
£
£
£


At 1 October 2022
2,042
2,809
12,504,926
12,509,777


Comprehensive income for the year

Profit for the year
-
-
949,723
949,723

Actuarial gains on pension scheme
-
-
345,000
345,000

Adjustment to pension scheme asset ceiling
-
-
(743,000)
(743,000)
Total comprehensive income for the year
-
-
551,723
551,723



At 1 October 2023
2,042
2,809
13,056,649
13,061,500


Comprehensive income for the year

Loss for the year
-
-
(117,370)
(117,370)

Actuarial gains on pension scheme
-
-
111,000
111,000

Adjustment to pension scheme asset ceiling
-
-
(258,000)
(258,000)
Total comprehensive income for the year
-
-
(264,370)
(264,370)


At 30 September 2024
2,042
2,809
12,792,279
12,797,130


The notes on pages 18 to 40 form part of these financial statements.

Page 15

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 October 2022
2,042
99,480
101,522

Profit for the year
-
-
-
Total comprehensive income for the year
-
-
-



At 1 October 2023
2,042
99,480
101,522

Profit for the year
-
-
-
Total comprehensive income for the year
-
-
-


At 30 September 2024
2,042
99,480
101,522


The notes on pages 18 to 40 form part of these financial statements.

Page 16

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2024
2023
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(117,370)
949,723

Adjustments for:

Depreciation of tangible assets
651,999
656,485

(Loss)/profit on disposal of tangible assets
2,096
(14,126)

Interest payable
(47,000)
(18,000)

Interest received
(23,720)
-

Taxation charge
23,717
(7,293)

Decrease in stocks
754,678
732,651

(Increase)/decrease in debtors
(95,443)
339,624

Decrease/(increase) in amounts owed by connected companies
365,365
(1,453,656)

(Decrease)/increase in creditors
(803,320)
774,028

Decrease in amounts owed to connected companies
-
(711,969)

Contributions to defined benefit pension scheme
(100,000)
(380,000)

Corporation tax (paid)
(7)
(135,275)

Net cash generated from operating activities

610,995
732,192


Cash flows from investing activities

Purchase of tangible fixed assets
(333,872)
(1,298,969)

Sale of tangible fixed assets
1
57,438

Interest received
23,720
-

Net cash from investing activities

(310,151)
(1,241,531)


Net increase/(decrease) in cash and cash equivalents
300,844
(509,339)

Cash and cash equivalents at beginning of year
168,956
678,295

Cash and cash equivalents at the end of year
469,800
168,956


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
469,800
168,956

469,800
168,956


Page 17

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

1.


General information

Lothian Electric Machines No.2 Limited ("the Company") is a limited company incorporated in Scotland. The Company’s registered number is SC382393.
The legal form of the Company is that of a company limited by shares.
The address of the registered office and principal place of business is:
Hospital Road
Haddington
East Lothian
EH41 3PD
The principal activity of the Company in the year under review was that of a holding company.
The principal activity of the Group's trading company in the year under review was the manufacture of stairlift carriages.
These financial statements have been presented in Pounds Sterling rounded to the nearest whole pound as this is the currency of the primary economic environment in which the Company operates.

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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 18

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.3

Going concern

The financial statements have been prepared on a going concern basis. Having given careful consideration to the anticipated future performance and financial position of the Company and the Group, the Director has not identified any material uncertainties which might cast doubt on the going concern assumption. 
The director has prepared forecasts for a period in excess of 12 months from the date of approval of these financial statements which indicate that the Company and the Group will have sufficient funds to meet their liabilities as they fall due for that period.

 
2.4

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 Consolidated 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'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 19

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group 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 Group has transferred the significant risks and rewards of ownership to the buyer;
the Group 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 Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.6

Operating leases: the Group as lessor

Rental income from operating leases is credited to profit or loss on a straight-line basis over the lease term.

 
2.7

Operating leases: the Group 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.

 
2.8

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.9

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 20

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

  
2.10

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 Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
Defined benefit pension plan
The Company operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.
The liability recognised in the Statement of Financial Position in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of plan assets at the reporting date (if any) out of which the obligations are to be settled.
The defined benefit obligation is calculated using the projected unit credit method. Annually the Company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').
The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.
 
Page 21

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:
a) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of plan introductions, benefit changes, curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'Net interest expense'.

 
2.11

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 reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting 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 reporting date.

 
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 22

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

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, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property & leasehold
-
10%
Straight line
Plant & machinery
-
10%
Straight line
Motor vehicles
-
25%
Straight line
Fixtures & fittings
-
10%
Straight line
Other fixed assets
-
33%
Straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
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 standard cost basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting 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.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

Page 23

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

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

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the reporting date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the reporting date.

 
2.19

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 24

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.20

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Group's Statement of Financial Position when the Group becomes party to the contractual provisions of the instrument.

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

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
 
Page 25

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)


2.20
Financial instruments (continued)


Financial liabilities

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

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

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

Page 26

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Critical judgements in applying the Group’s accounting policies
In applying the Group's accounting policies, the director is required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The director's judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
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 revision and future periods, if the revision affects both current and future periods.
 
The director does not believe that there are any critical judgements.
Key sources of estimation uncertainty
(i)     Defined benefit pension scheme
The pension scheme assets and liabilities are valued using an actuarial valuation incorporating a number of assumptions. The assumptions can be seen in note 22.


4.


Turnover

2024
2023
£
£

United Kingdom
42,283,488
46,963,564


The whole of the turnover in the year relates to the manufacture and sale of stairlift carriages.


5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2024
2023
£
£

Research & development charged as an expense
180,233
490,812

Exchange differences
(27,242)
(61,124)

Other operating lease rentals
230,113
205,606

Depreciation of tangible fixed assets
651,999
656,485

Page 27

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

6.


Auditor's remuneration

During the year, the Group obtained the following services from the Group's auditor:


2024
2023
£
£

Fees payable to the Group's auditor for the audit of the consolidated and parent Company's financial statements
37,500
35,000

Fees payable to the Group's auditor in respect of:

Preparation of financial statements and iXBRL tagging services
7,160
6,955


7.


Employees

Staff costs, including director's remuneration, were as follows:


Group
Group
2024
2023
£
£


Wages and salaries
4,908,159
4,735,987

Social security costs
433,559
403,710

Cost of defined contribution scheme
274,274
248,198

5,615,992
5,387,895


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


        2024
        2023
            No.
            No.







Production
155
161



Administration
15
17

170
178

Page 28

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

8.


Director's remuneration

2024
2023
£
£

Director's emoluments
74,902
72,777

Group contributions to defined contribution pension schemes
13,500
13,208

88,402
85,985


During the year retirement benefits were accruing to 1 director (2023 -1) in respect of defined contribution pension schemes.


9.


Interest receivable

2024
2023
£
£


Other interest receivable
23,720
-


10.


Net interest on defined benefit pension scheme liability

2024
2023
£
£

Net interest on defined benefit pension scheme liability (Note 22)
47,000
18,000



11.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
-
(89,010)

Adjustments in respect of previous periods
-
(88,717)


Total current tax
-
(177,727)

Deferred tax


Origination and reversal of timing differences
23,717
170,434

Total deferred tax
23,717
170,434


Taxation on profit on ordinary activities
23,717
(7,293)
Page 29

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 -lower than) the standard rate of corporation tax in the UK of25% (2023 -22%). The differences are explained below:

2024
2023
£
£


(Loss)/profit on ordinary activities before tax
(93,653)
942,430


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 -22%)
(23,413)
207,335

Effects of:


Difference between CT rate and DT rate on current year timing differences
-
(10,691)

Pension scheme contributions
(36,007)
(91,168)

Adjustments in respect of prior periods
-
(88,717)

Other differences leading to a decrease in the tax charge
83,137
(24,052)

Total tax charge for the year
23,717
(7,293)


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 30

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

12.


Tangible fixed assets

Group






Long term leasehold property
Plant & machinery
Motor vehicles
Other fixed assets
Total

£
£
£
£
£



Cost


At 1 October 2023
943,204
6,572,023
116,341
733,366
8,364,934


Additions
87,719
201,698
-
44,455
333,872


Disposals
-
(206,209)
-
-
(206,209)



At 30 September 2024

1,030,923
6,567,512
116,341
777,821
8,492,597



Depreciation


At 1 October 2023
457,879
4,786,615
112,115
551,484
5,908,093


Charge for the year on owned assets
88,537
491,853
4,226
67,383
651,999


Disposals
-
(204,112)
-
-
(204,112)



At 30 September 2024

546,416
5,074,356
116,341
618,867
6,355,980



Net book value



At 30 September 2024
484,507
1,493,156
-
158,954
2,136,617



At 30 September 2023
485,325
1,785,408
4,226
181,882
2,456,841

Page 31

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

13.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost and net book value


At 1 October 2023
2,041



At 30 September 2024
2,041





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Lothian Electric Machines Limited
1 Hospital Road, Haddington, 
East Lothian, Scotland, EH41 3PD.
Ordinary
100%
Lemac Marine Limited *
Telecom House, Millennium Business Park, Station Road, 
Steeton, Bradford, West Yorkshire, 
BD20 6RB.
Ordinary
100%
Lemac Taiwan Incorporated *
19F.-2, No.629, Sec. 1, Chongde Road, North District, Taichung City 40452, Taiwan, Republic of China.
Ordinary
100%

* the above subsidiaries are indirectly held and are 100% subsidiaries of Lothian Electric Machines Limited. During the year both of these subsidiaries were dormant.

Page 32

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

14.


Stocks

Group
Group
2024
2023
£
£

Raw materials and consumables
9,028,145
7,969,312

Work in progress (goods to be sold)
162,674
1,062,968

Finished goods and goods for resale
4,701,054
5,614,271

13,891,873
14,646,551


The difference between purchase price or production cost of stocks and their replacement cost is not material.


15.


Debtors

Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£


Trade debtors
41,727
50,997
-
-

Amounts owed by group undertakings
-
-
99,460
99,460

Amounts owed by connected companies
1,103,241
1,468,606
-
-

Other debtors
704,488
622,878
-
-

Prepayments and accrued income
332,873
309,770
-
-

2,182,329
2,452,251
99,460
99,460


The amounts owed by Group companies are interest free and repayable on demand.


16.


Cash and cash equivalents

Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£

Cash at bank and in hand
469,800
168,956
21
21

469,800
168,956
21
21


Page 33

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

17.


Creditors: Amounts falling due within one year

Group
Group
2024
2023
£
£

Trade creditors
1,500,420
2,831,450

Other taxation and social security
901,619
566,673

Other creditors
160,107
475,043

Accruals and deferred income
2,854,411
2,346,711

5,416,557
6,219,877


The Group has granted a debenture in the form of a bond and floating charge on its assets to secure
all sums and obligations due, or to become due, to Lloyds Bank PLC.
The Group has granted an import guarantee to HM Revenue & Customs to the value of £600,000.


18.


Deferred taxation


Group



2024
2023


£

£






At beginning of year
(443,222)
(361,798)


Charged to profit or loss
(23,710)
(81,424)



At end of year
(466,932)
(443,222)

Group
Group
2024
2023
£
£

Accelerated capital allowances
(466,932)
(532,232)

Tax losses carried forward
-
89,010

(466,932)
(443,222)

Page 34

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

19.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



1,742 Ordinary shares of £1.00 each
1,742
1,742
300 Preference shares of £1.00 each
300
300

2,042

2,042

The Preference shares shall rank on a return of capital of liquidation or otherwise in priority to any other shares of the Company. The Preference shares have no right to receive notice of, nor attend or vote at any general meeting of the Company.
The Preference shares have a non-cumulative right to a preferential dividend of 8% in priority to all other dividends, which has been waived for the year ended 30 September 2024.



20.


Reserves

Foreign exchange reserve

The foreign exchange reserve represents the cumulative movement in foreign currencies of the subsidiary undertakings, when translating into the Group's reporting currency for consolidation.

Profit & loss account

The accumulated profit for the Company less dividends declared.


21.


Capital commitments




At 30 September 2024 the Group had capital commitments as follows:


Group
Group
2024
2023
£
£

Contracted for but not provided in these financial statements
313,209
229,816

Page 35

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

22.


Pension commitments

The Group operates a defined contribution pension scheme separately from the defined benefit scheme. The assets of the defined contribution scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £274,274 (2023 - £248,198). Contributions totalling £58,222 were owed by the fund at the balance sheet date (2023 - £37,845 owed to) and are included in creditors.

The Group operates a Defined Benefit Pension Scheme.

The defined benefit pension scheme is closed to new entrants and the future accrual of existing members.
The valuation is based on the most recent Actuarial valuation at 30 September 2024. Scheme assets are stated at their market values at the respective balance sheet dates and overall expected rates of return are established by applying published broker's forecasts to each category of scheme assets.



Reconciliation of present value of plan liabilities:


2024
2023
£
£

Reconciliation of present value of plan liabilities


At the beginning of the year
6,854,000
7,444,000

Expenses paid
(13,000)
(8,000)

Interest cost
325,000
340,000

Actuarial changes
167,000
(326,000)

Benefits paid
(449,000)
(404,000)

Experience adjustments
54,000
(192,000)

At the end of the year
6,938,000
6,854,000



Reconciliation of present value of plan assets:


2024
2023
£
£


At the beginning of the year
6,854,000
7,444,000

Return on plan assets
332,000
(173,000)

Interest income
372,000
358,000

Expenses paid
(13,000)
(8,000)

Contributions
100,000
380,000

Benefits paid
(449,000)
(404,000)

Adjustment to asset ceiling
(258,000)
(743,000)

At the end of the year
6,938,000
6,854,000

Page 36

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
 
22.Pension commitments (continued)


Composition of plan assets:


2024
2023
£
£


Equities
2,765,000
4,656,000

Property
3,120,000
2,170,000

Amount due from sponsor
100,000
380,000

Cash at bank
2,064,000
253,000

Loan
-
250,000

Insured pensions
75,000
73,000

Adjustment to asset ceiling
(1,186,000)
(928,000)

Total plan assets
6,938,000
6,854,000

2024
2023
£
£


Fair value of plan assets
6,938,000
6,854,000

Present value of plan liabilities
(6,938,000)
(6,854,000)

Net pension scheme liability
-
-


The amounts recognised in profit or loss are as follows:

2024
2023
£
£


Interest on obligation
47,000
18,000

Total
47,000
18,000


Amounts recognised in other comprehensive income
111,000
345,000

111,000
345,000


The Group expects to contribute £100,000 to its Defined Benefit Pension Scheme in 2025.




Page 37

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
 
22.Pension commitments (continued)


Principal actuarial assumptions at the reporting date (expressed as weighted averages):

2024
2023
%
%
Discount rate


4.55

4.90
 
RPI inflation


3.15

3.60
 
CPI inflation


2.45

2.90
 
Revaluation of pensions in deferment: CPI max 5.0% p.a.


2.45

2.90
 
Pension increases in payment: RPI min 3.0% p.a. max 5.0% p.a.


3.00

3.00
 
Mortality rates



 
- for a male aged 65 now


21.3

21.4
 
- at 65 for a male aged 45 now


22.6

22.6
 
- for a female aged 65 now


23.9

23.8
 
- at 65 for a female member aged 45 now


25.3

25.2
 



Amounts for the current and previous four periods are as follows:


Defined benefit pension schemes

2024
2023
2022
2021
2020
£
£
£
£
£
Defined benefit obligation

(6,938,000)

(6,854,000)

(7,444,000)
 
(10,363,000)
 
(12,175,000)

Scheme assets

6,938,000

6,854,000

7,444,000
 
8,293,000
 
7,429,000

Surplus
-

-

-
 
(2,070,000)
 
(4,746,000)





2024
2023
2022
2021
2020
£
£
£
£
£
Adjustments on scheme liabilities

(84,000)

590,000

2,919,000
 
1,812,000
 
(513,000)

Adjustments on scheme assets

84,000

(590,000)

(849,000)
 
864,000
 
85,000

-

-

2,070,000
 
2,676,000
 
(428,000)


Page 38

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

23.


Commitments under operating leases

At 30 September 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2024
2023
£
£

Not later than 1 year
250,000
132,708

Later than 1 year and not later than 5 years
875,000
-

1,125,000
132,708

24.


Analysis of net debt




At 1 October 2023
Cash flows
At 30 September 2024
£

£

£

Cash at bank and in hand

168,956

300,844

469,800



25.


Related party transactions

The Company has taken advantage of the exemption conferred by FRS 102 Section 33 not to disclose transactions with wholly owned members of the Group headed by Lothian Electric Machines Limited No.2 Limited.
During the year, the Group sold goods and recharged expenses to the value of £42,172,085 (2023: £46,867,637) and purchased goods and services to the value of £Nil (2023: £Nil) to and from entities under common control.
The Group sub-lets land and buildings to an entity under common control for £2,900 per annum.
Costs incurred on behalf of the Company's pension scheme totalled £146,774 (2023: £172,583).
Balances with related parties at the year end are as follows:


2024
2023
£
£

Balances due from entities under common control
1,103,241
1,468,606
Balances due from the Company pension scheme
167,126
-
Balances due from the ultimate controlling party
120,274
192,843

The Company has commitments under operating leases totalling £1,125,000 as at 30 September 2024 with an entity under common control.

Page 39

 
LOTHIAN ELECTRIC MACHINES NO. 2 LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

26.


Controlling party

The ultimate controlling party is J Jakes. 

Page 40