Company registration number SC369988 (Scotland)
LOCHAY HOMES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
LOCHAY HOMES LIMITED
COMPANY INFORMATION
Directors
Miss C Maclean
Mr A Reid
Mr J Thomson
Mr W Thomson
Secretary
Miss C Maclean
Company number
SC369988
Registered office
28 Stafford Street
Edinburgh
EH3 7BD
Auditor
Thomson Cooper
22 Stafford Street
Edinburgh
EH3 7BD
LOCHAY HOMES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
LOCHAY HOMES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 1 -
The directors present the strategic report for the year ended 30 September 2024.
Review of the business
In terms of residential development, the demand for housing remained strong during the year under review although seeing these sales through to completions was challenging. Sales of opening market houses especially were impacted by buyer chains due to current market conditions. Delays in the planning systems resulted in subsequent delays bring able to get our projects started, again having an impact particularly on our affordable housing program.
There were 22 open market sales of new homes (2023: 43) and 7 affordable homes were sold during (2023: 18). Average house prices for open market sales increased to £362,500 during the year (2023: £320,000).
Principal risks and uncertainties
Land
An ongoing land purchasing programme remains key to the company’s short and long term objectives. The company is continually identifying potential opportunities within its geographical target of central Scotland to deliver future homes.
Sales
As mentioned above, sales performance was challenging during the financial year however the level of demand has seen an upturn post year end. Customer affordability remains a risk to the business particularly during the uncertain economic times. Sales performance is monitored closely to address any issues which arise.
Availability and price of materials and labour
The severe material shortages post Covid have now eased, replaced by material and labour cost increases and National Insurance tax rises.
Interest rates
The recent reduction in interest rates are encouraging to a market that has become more accustomed to higher rates.
Planning
The planning application bureaucracy continues to delay projects from starting and making amendments during development to respond to changing market conditions and customer requirements. In order to ensure these delays are minimized, the company is in regular contact with local authorities.
Future developments
The group continues to look for new land opportunities for residential development, mindful of the fact that it can take several years from initial negotiations to bringing a site to development stage. Our short term position is secure but without having our financial resources tied up in multiple dormant sites awaiting development. Our efforts are currently focused on the longer term to ensure continuity.
Research and development
The group is continuing to explore alternatives to gas heating ahead of its ban in 2025. We currently fit solar panels to our housing as standard and are exploring other options such as air and ground source heat pumps to move to lower carbon alternatives.
Key performance indicators
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Private average house price | | |
LOCHAY HOMES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 2 -
Mr W Thomson
Director
16 June 2025
LOCHAY HOMES 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 continued to be that of housebuilding.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £5,547. The directors do not recommend payment of a further dividend.
Preference dividends were paid amounting to £91,000.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Miss C Maclean
Mr A Reid
Mr J Thomson
Mr W Thomson
Auditor
The auditor, Thomson Cooper, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 company’s auditor 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 company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
LOCHAY HOMES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 4 -
On behalf of the board
Mr W Thomson
Director
16 June 2025
LOCHAY HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LOCHAY HOMES LIMITED
- 5 -
Opinion
We have audited the financial statements of Lochay Homes Limited (the 'company') for the year ended 30 September 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 company's affairs as at 30 September 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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 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.
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.
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' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
LOCHAY HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LOCHAY HOMES LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas; existence and timing of recognition of income, misstatement of work in progress, posting unusual journals along with complex transactions and manipulating the Company's key performance indicators to meet targets. We discussed these risks with management, designed audit procedures to test the timing and existence of revenue, reviewed a sample of contracts focussing on cut off, tested a sample of journals to confirm they were appropriate, read minutes of Board meetings and reviewed areas of judgement for indicators of management bias to address these risks.
We reviewed areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the officers and other management (as required by the auditing standards) Whilst the company is subject to many laws and regulations, we did not identify any others where the consequence of non-compliance alone could have a material effect on amounts or disclosures in the financial statements,
We reviewed the laws and regulations in areas that directly affect the financial statements including financial and taxation legislation and considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.
With the exception of any known or possible non-compliance with relevant and significant laws and regulations, and as required by the auditing standards, our work in respect of these was limited to enquiry of the officers and management of the company.
We communicated identified law and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
LOCHAY HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LOCHAY HOMES LIMITED (CONTINUED)
- 7 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to records transactions, collusion or the provision of intentional misrepresentations,
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.
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.
Alan Mitchell (Senior Statutory Auditor)
For and on behalf of Thomson Cooper, Statutory Auditors
Edinburgh
19 June 2025
LOCHAY HOMES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
10,049,498
15,415,971
Cost of sales
(8,690,353)
(13,407,841)
Gross profit
1,359,145
2,008,130
Administrative expenses
(480,702)
(520,255)
Other operating income
41,667
Operating profit
4
920,110
1,487,875
Interest receivable and similar income
7
37
Interest payable and similar expenses
8
(40,985)
(69,095)
Profit before taxation
879,162
1,418,780
Tax on profit
9
(158,434)
(368,061)
Profit for the financial year
720,728
1,050,719
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LOCHAY HOMES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 9 -
2024
2023
£
£
Profit for the year
720,728
1,050,719
Other comprehensive income
-
-
Total comprehensive income for the year
720,728
1,050,719
LOCHAY HOMES LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2024
30 September 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
338,166
316,509
Current assets
Stocks
13
10,403,939
7,527,854
Debtors
14
741,538
549,362
Cash at bank and in hand
44,765
1,466,612
11,190,242
9,543,828
Creditors: amounts falling due within one year
15
(3,139,382)
(2,102,109)
Net current assets
8,050,860
7,441,719
Total assets less current liabilities
8,389,026
7,758,228
Creditors: amounts falling due after more than one year
16
(484,473)
(481,496)
Provisions for liabilities
Deferred tax liability
19
52,205
48,565
(52,205)
(48,565)
Net assets
7,852,348
7,228,167
Capital and reserves
Called up share capital
20
1,300,100
1,300,100
Share premium account
62,112
62,112
Profit and loss reserves
6,490,136
5,865,955
Total equity
7,852,348
7,228,167
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 16 June 2025 and are signed on its behalf by:
Mr A Reid
Mr W Thomson
Director
Director
Company registration number SC369988 (Scotland)
LOCHAY HOMES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 October 2022
100
62,112
4,825,189
4,887,401
Year ended 30 September 2023:
Profit and total comprehensive income
-
-
1,050,719
1,050,719
Bonus issue of shares
20
1,300,000
1,300,000
Dividends
10
-
-
(9,953)
(9,953)
Balance at 30 September 2023
1,300,100
62,112
5,865,955
7,228,167
Year ended 30 September 2024:
Profit and total comprehensive income
-
-
720,728
720,728
Dividends
10
-
-
(96,547)
(96,547)
Balance at 30 September 2024
1,300,100
62,112
6,490,136
7,852,348
LOCHAY HOMES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(901,980)
(28,224)
Interest paid
(40,985)
(69,095)
Income taxes paid
(253,032)
(322,198)
Net cash outflow from operating activities
(1,195,997)
(419,517)
Investing activities
Purchase of tangible fixed assets
(165,020)
(99,007)
Proceeds from disposal of tangible fixed assets
42,000
70,012
Interest received
37
Net cash used in investing activities
(122,983)
(28,995)
Financing activities
Proceeds from issue of shares
1,300,000
Proceeds of borrowings
350,000
Repayment of bank loans
(10,183)
(9,813)
Payment of finance leases obligations
3,863
(96,730)
Dividends paid
(96,547)
(9,953)
Net cash (used in)/generated from financing activities
(102,867)
1,533,504
Net (decrease)/increase in cash and cash equivalents
(1,421,847)
1,084,992
Cash and cash equivalents at beginning of year
1,466,612
381,620
Cash and cash equivalents at end of year
44,765
1,466,612
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 13 -
1
Accounting policies
Company information
Lochay Homes Limited is a private company limited by shares incorporated in Scotland. The registered office is 28 Stafford Street, Edinburgh, EH3 7BD.
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 amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for a period of not less than twelve months. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable during the period, exclusive of value added tax, where there is a right to consideration from property trading activities.
1.4
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.
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:
Plant and equipment
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 credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
1.6
Work in progress
Work in progress is valued on the basis of direct costs plus attributable overheads including financing costs. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.8
Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Debt instruments are subsequently measured at amortised cost.
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 entity after deducting all of its financial liabilities.
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classified as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
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 company 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.
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company 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 company.
1.10
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 when the company has 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.
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 16 -
1.11
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.
1.12
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are 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 estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are addressed below:
Useful economic lives of tangible assets
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 advancements, future investments, economic utilisation and the physical conditions of the assets. See note 7 for carrying amounts of tangible assets.
Work in progress
At the end of each reporting period the company assess the level of work in progress for impairment. If an item of work in progress is impaired, a charge is recognised in the Statement of Income and Retained Earnings.
Impairment of debtors
The company makes an estimate of the recoverable value of trade and other debtors. When assessing the impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience See note 8 for carrying amount of debtors.
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 17 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
10,049,498
15,415,971
2024
2023
£
£
Other revenue
Interest income
37
-
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
17,000
8,000
Depreciation of owned tangible fixed assets
7,573
10,313
Depreciation of tangible fixed assets held under finance leases
118,478
84,311
Profit on disposal of tangible fixed assets
(24,688)
(29,002)
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
14
12
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
377,645
182,585
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
377,645
182,585
No other remuneration was paid to any key management personnel.
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 18 -
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
37
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
37
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
466
1,327
Other interest on financial liabilities
31,563
61,464
32,029
62,791
Other finance costs:
Interest on finance leases and hire purchase contracts
8,956
6,304
40,985
69,095
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
230,680
284,532
Adjustments in respect of prior periods
(75,886)
55,500
Total current tax
154,794
340,032
Deferred tax
Origination and reversal of timing differences
3,640
28,029
Total tax charge
158,434
368,061
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
9
Taxation
(Continued)
- 19 -
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
879,162
1,418,780
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.00%)
219,791
312,132
Tax effect of expenses that are not deductible in determining taxable profit
164
662
Adjustments in respect of prior years
(75,886)
55,500
Effect of change in corporation tax rate
3,354
Permanent capital allowances in excess of depreciation
(3,707)
Other non-reversing timing differences
120
Other tax adjustments - Deferred Tax
14,365
Taxation charge for the year
158,434
368,061
10
Dividends
2024
2023
£
£
Final paid
96,547
9,953
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 20 -
11
Tangible fixed assets
Plant and equipment
£
Cost
At 1 October 2023
485,390
Additions
165,020
Disposals
(69,250)
At 30 September 2024
581,160
Depreciation and impairment
At 1 October 2023
168,881
Depreciation charged in the year
126,051
Eliminated in respect of disposals
(51,938)
At 30 September 2024
242,994
Carrying amount
At 30 September 2024
338,166
At 30 September 2023
316,509
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and equipment
323,158
293,929
12
Financial instruments
2024
2023
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
555,334
455,001
Carrying amount of financial liabilities
Measured at amortised cost
3,570,627
2,452,820
13
Stocks
2024
2023
£
£
Work in progress
10,403,939
7,527,854
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 21 -
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
362,465
170,168
Corporation tax recoverable
27,206
Other debtors
333,007
379,194
Prepayments and accrued income
18,860
741,538
549,362
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
17
10,311
18,265
Obligations under finance leases
18
73,649
74,992
Trade creditors
1,151,750
966,294
Amounts owed to group undertakings
850,000
Corporation tax
71,032
Other taxation and social security
53,228
59,753
Other creditors
263,300
272,472
Accruals and deferred income
737,144
639,301
3,139,382
2,102,109
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
17
7,771
10,000
Obligations under finance leases
18
126,702
121,496
Other borrowings
17
350,000
350,000
484,473
481,496
17
Loans and overdrafts
2024
2023
£
£
Bank loans
18,082
28,265
Other loans
350,000
350,000
368,082
378,265
Payable within one year
10,311
18,265
Payable after one year
357,771
360,000
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
17
Loans and overdrafts
(Continued)
- 22 -
The other loans are secured by a charge granted by the company.
The other loan is repayable over 15 months and interest is charged at 7% per annum.
18
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
73,649
74,992
In two to five years
126,702
121,496
200,351
196,488
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
52,205
48,565
2024
Movements in the year:
£
Liability at 1 October 2023
48,565
Charge to profit or loss
3,640
Liability at 30 September 2024
52,205
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 23 -
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
90
90
90
90
B Ordinary shares of £1 each
10
10
10
10
100
100
100
100
2024
2023
2024
2023
Preference share capital
Number
Number
£
£
Issued and fully paid
Preference shares of £1 each
1,300,000
1,300,000
1,300,000
1,300,000
Preference shares classified as equity
1,300,000
1,300,000
Total equity share capital
1,300,100
1,300,100
The company has A and B ordinary shares. Both these classes of shares hold full voting rights, and give entitlement to appoint directors, receive dividends and participate in distributions on winding up. These shares are not redeemable.
The preference shares only hold voting rights upon (i) preferential dividends being in arrears or (ii) a resolution being proposed to wind up the company, reduce share capital or vary rights attaching to preference shares. Additionally, these give entitlement to preferential dividends, priority return of amount paid up upon a return of capital in the event of liquidation, reduction of capital or otherwise (except redemption or purchase of own shares) and are not redeemable.
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, who are also directors is £377,645 (2023: £338,300).
Transactions with related parties
Included in creditors is £350,000 (2023: £350,000) payable to a director and £850,000 (2023: £nil) due to the parent company, Lochay Group.
During the year, management fees of £250,000 (2023 £307,125) and salary recharges of £nil (2023: £100,836) were payable to Lochay Group.
At 30 September 2024 £83,324 (2023: £87,562) was payable by the company to a director.
22
Directors' transactions
Dividends totalling £5,547 (2023 - £5,964) were paid in the year in respect of shares held by the company's directors.
LOCHAY HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 24 -
23
Cash absorbed by operations
2024
2023
£
£
Profit for the year after tax
720,728
1,050,719
Adjustments for:
Taxation charged
158,434
368,061
Finance costs
40,985
69,095
Investment income
(37)
Gain on disposal of tangible fixed assets
(24,688)
(29,002)
Depreciation and impairment of tangible fixed assets
126,051
94,624
Movements in working capital:
(Increase)/decrease in stocks
(2,876,085)
695,091
Increase in debtors
(164,970)
(42,894)
Increase/(decrease) in creditors
1,117,602
(2,233,918)
Cash absorbed by operations
(901,980)
(28,224)
24
Analysis of changes in net funds/(debt)
1 October 2023
Cash flows
30 September 2024
£
£
£
Cash at bank and in hand
1,466,612
(1,421,847)
44,765
Borrowings excluding overdrafts
(378,265)
10,183
(368,082)
Obligations under finance leases
(196,488)
(3,863)
(200,351)
891,859
(1,415,527)
(523,668)
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