Company registration number 00921133 (England and Wales)
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
COMPANY INFORMATION
Directors
Mr H James
Mrs M Eyles
(Appointed 1 August 2024)
Mr E Smith
(Appointed 1 August 2024)
Mr A Holthouse
(Appointed 1 August 2024)
Secretary
Mr H James
Company number
00921133
Registered office
Grange Road
Cwmbran
Gwent
NP44 3XU
Auditor
UHY Hacker Young
Bradbury House
Mission Court
Newport
Gwent
United Kingdom
NP20 2DW
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
CONTENTS
Page(s)
Strategic report
1
Directors' report
2 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 20
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
The directors present their strategic report on the affairs of the company, together with the financial statements, directors' report and independent auditor's report, for the year ended 31 December 2024.
The directors, in preparing this strategic report, have complied with s414c of the Companies Act 2006.
Principal activities, business review and future developments
The principal activity of the company is that of a holding vehicle for various investments.
There has been no changes to the company's investments in the period and no further changes are expected in the foreseeable future.
The company generated a loss after tax of £14,000 (2023: £43,000).
Principal risks and uncertainties
The company is exposed to potential impairments of its underlying investments and intercompany loans. Underlying net worth of investments and intercompany debtor counterparties are regularly monitored by the directors in order to assess any potential impairments should they arise. The company has invested in operations outside of the United Kingdom. As a result the value of underlying investments can be affected by movements in exchange rates.
In assessing the net worth of investments together with the recoverability of intercompany debtors, the directors have used the latest available financial information together with any forecasts alongside other factors such as the overall economy and future prospects in determining whether any impairment is necessary.
Key performance indicators
The reported loss in the year was £14,000 (2023: £43,000) as noted on page 9.
There were no impairments to fixed asset investments recognised in the current year or prior period.
Owing to the straightforward nature of the business, the directors do not use any key performance indicators other than those already disclosed in these financial statements.
Approved by the board and signed on its behalf by:
Mr H James
Director
30 June 2025
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who served throughout the year and thereafter were as follows:
Mr H James
Mr J Ramos
(Resigned 1 August 2024)
Mrs M Eyles
(Appointed 1 August 2024)
Mr E Smith
(Appointed 1 August 2024)
Mr A Holthouse
(Appointed 1 August 2024)
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date. These provisions apply to directors of parent and subsidiary entities also.
Financial risk management objectives and policies
The Company is a holding company of a group of companies and consequently the most significant financial risk is that associated with liquidity. The Company is however part of the Cummins, Inc. group (“the Group”) and is part of the Group’s cash pooling scheme which ensures sufficient funds are available to maintain liquidity.
Post reporting date events
The company has not identified any post balance sheet events which would necessitate disclosure in the financial statements.
Future developments
Details of future developments can be found in the strategic report on page 1 and form part of this report by cross reference.
Auditor
The auditor, UHY Hacker Young, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
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), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland”. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
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
Each of the persons who is a director at the date of approval of this report confirms that:
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware; and
the director has taken all the steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the company’s auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act.
Going concern
The company has made a loss of £14,000 and has net assets of £13,038,000 represented largely by investments in fellow group undertakings offset by amounts due to fellow group undertakings. The company itself does not generate income but incurs modest professional service fees each year which are settled by fellow Cummins group companies. The directors are confident that this arrangement will continue for the foreseeable future and for at least twelve months from the date of signing the financial statements.
The directors have concluded that the company has sufficient resources to continue to trade for at least twelve months from the date of signing the financial statements and meet any liabilities as they fall due. In drawing this conclusion the directors note that:
Cummins, Inc. group has cash and financing resources available to it of approximately $2,264m, revolving credit facilities of $2,741m and other credit facilities of $628m (per the most recent 10k filing).
the company is in a net assets positions; and
the company does not manufacture and has limited overheads which the directors are confident can be met as they fall due.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
On behalf of the board
Mr H James
Director
30 June 2025
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
- 5 -
Opinion
We have audited the financial statements of Meritor Heavy Vehicle Systems (Manufacturing) Limited (the 'company') for the year ended 31 December 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 31 December 2024 and of its 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 qualified opinion
With respect to the carrying value of the company's investment in Meritor Holdings (Barbados) Limited of £13,237,000 as at 31 December 2024 and 31 December 2023, the audit evidence available to us was limited because Meritor Holdings (Barbados) Limited does not prepare publicly available audited accounts. We were unable to obtain sufficient appropriate audit evidence regarding the investment carrying value as at 31 December 2024 and 31 December 2023 by using other audit procedures.
Consequently, we were unable to determine whether any adjustments to these amounts were necessary. In addition, were any adjustment to the carrying amount of investment be required, the strategic report and directors’ report would also need to be amended.
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 Financial Reporting Council’s (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 qualified 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.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
- 6 -
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.
As described in the basis for qualified opinion section of our report, we are unable to satisfy ourselves concerning the carrying amount of company's investment in Meritor Holdings (Barbados) Limited as at 31 December 2024 and 31 December 2023. We have concluded that where the other information refers to the carrying amount of investment, it may be materially misstated for the same reason.
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.
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, 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 any material misstatements in the strategic report of the directors' report.
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.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
- 7 -
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.
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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the relevant sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
- 8 -
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.
Mr John Griffiths
Senior Statutory Auditor
For and on behalf of UHY Hacker Young
30 June 2025
Chartered Accountants
Statutory Auditor
Newport
Gwent
United Kingdom
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
2024
2023
Notes
£ 000
£ 000
Turnover
-
1
Administrative expenses
(815)
(778)
Operating loss
3
(815)
(777)
Interest receivable and similar income
6
810
740
Interest payable and similar expenses
7
(9)
(6)
Loss before taxation
(14)
(43)
Tax on loss
8
Loss for the financial year
(14)
(43)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
2024
2023
£ 000
£ 000
Loss for the year
(14)
(43)
Other comprehensive income
-
-
Total comprehensive income for the year
(14)
(43)
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 11 -
2024
2023
Notes
£ 000
£ 000
£ 000
£ 000
Fixed assets
Investments
9
13,237
13,237
Creditors: amounts falling due within one year
11
(199)
(185)
Net current liabilities
(199)
(185)
Net assets
13,038
13,052
Capital and reserves
Called up share capital
12
27,559
27,559
Share premium account
150
150
Profit and loss reserves
(14,671)
(14,657)
Total equity
13,038
13,052
The financial statements were approved by the board of directors and authorised for issue on 30 June 2025 and are signed on its behalf by:
Mr H James
Director
Company registration number 00921133 (England and Wales)
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
£ 000
£ 000
£ 000
£ 000
Balance at 1 January 2023
27,559
150
(14,614)
13,095
Period ended 31 December 2023:
Loss and total comprehensive expense
-
-
(43)
(43)
Balance at 31 December 2023
27,559
150
(14,657)
13,052
Year ended 31 December 2024:
Loss and total comprehensive expense
-
-
(14)
(14)
Balance at 31 December 2024
27,559
150
(14,671)
13,038
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 13 -
1
Accounting policies
The principal accounting policies are summarised below. They have all been applied consistently throughout the year and to the preceding year.
Company information
Meritor Heavy Vehicle Systems (Manufacturing) Limited is a private Company limited by shares incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company’s registered office is shown on the company information page.
The principal activity of the company is stated in the Strategic Report on page 1.
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 £000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements; and
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel and related party transactions.
The financial statements of the company are consolidated in the financial statements of Cummins, Inc. These consolidated financial statements are available from its registered office, 500 Jackson Street Box 3005 Columbus, IN 47201 United States. They can also be downloaded from the website www.cummins.com.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.2
Going concern
The company has made a loss of £14,000 and has net assets of £13,038,000 represented largely by investments in fellow group undertakings offset by amounts due to fellow group undertakings. The company itself does not generate income but incurs modest professional service fees each year which are settled by fellow Cummins group companies. The directors are confident that this arrangement will continue for the foreseeable future and for at least twelve months from the date of signing the financial statements.true
The directors have concluded that the company has sufficient resources to continue to trade for at least twelve months from the date of signing the financial statements and meet any liabilities as they fall due. In drawing this conclusion the directors note that:
Cummins, Inc. group has cash and financing resources available to it of approximately $2,264m, revolving credit facilities of $2,741m and other credit facilities of $628m (per the most recent 10k filing).
the company is in a net assets positions; and
the company does not manufacture and has limited overheads which the directors are confident can be met as they fall due.
1.3
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long-term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.4
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.
1.5
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company 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.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
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.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.6
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.
1.7
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.8
The company has taken the exemption provided by Section 401 of the Companies Act 2006 and has not prepared consolidated financial statements on the basis that the company is included in the consolidated financial statements of a larger group and those consolidated financial statements meet the criteria set out in section 401 (2) of the act. These financial statements therefore present information about the company as an individual undertaking and not about its group.
1.9
Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
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.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in the profit or loss as follows: for financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset it if it were to be sold at the reporting date.
The carrying value of the fixed asset investments at the balance sheet date was £13,237,000 (2023: £13,237,000), no impairments were recognised in the current or prior year.
The directors believe that owing to the straightforward nature of the business there are no key sources of estimation uncertainty.
3
Operating loss
2024
2023
Operating loss for the year is stated after charging:
£ 000
£ 000
Fees payable to the company's auditor for the audit of the company's financial statements
4
4
Provision against intercompany receivable
810
740
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Total
5
Directors' remuneration
All directors who were in office during the period are paid directly by other Meritor, Inc. group companies. They received no remuneration for their services to Meritor Heavy Vehicle Systems (Manufacturing) Limited. No emoluments for these directors were charged to the company during the period (2023: £nil).
6
Interest receivable and similar income
2024
2023
£ 000
£ 000
Interest income
Interest receivable from group companies
810
740
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 18 -
7
Interest payable and similar expenses
2024
2023
£ 000
£ 000
Interest payable to group undertakings
9
6
8
Taxation
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£ 000
£ 000
Loss before taxation
(14)
(43)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
(4)
(10)
Tax effect of expenses that are not deductible in determining taxable profit
202
174
Group relief
1
8
Transfer pricing and thin capitalisation adjustments
(200)
(172)
Taxation charge for the year
-
-
In December 2021, the Organisation for Economic Co-operation and Development (OECD) released the Pillar Two model rules to reform international corporate taxation. Large multinational enterprises within the scope of the rules are required to calculate their effective tax rate for each jurisdiction where they operate. They will be liable to pay a top-up tax for the difference between their effective tax rate per jurisdiction and the 15% minimum rate. Meritor Heavy Vehicle Systems (Manufacturing) Limited expects to be within the scope of the Pillar Two rules in 2024 and the group has carried out an impact assessment and has determined that there is no material exposure to top-up taxes for the UK territory including for this entity.
9
Fixed asset investments
2024
2023
Notes
£ 000
£ 000
Investments in subsidiaries
10
13,237
13,237
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
9
Fixed asset investments
(Continued)
- 19 -
Movements in fixed asset investments
Shares in group undertakings
£ 000
Cost
At 1 January 2024 & 31 December 2024
13,237
Carrying amount
At 31 December 2024
13,237
At 31 December 2023
13,237
10
Subsidiaries
Details of the company's subsidiaries at 31 December 2024 are as follows:
Name of undertaking
Address
Nature of
Class of shares
% Held
business
held
Direct
Indirect
Meritor Holdings (Barbados) Limited
1
Holding company
Ordinary
100.00
0
Meritor Commercial Vehicle Systems India Private Limited
2
Manufacturing of equipment for motor vehicles and trailers
Ordinary
0
99.97
Xuzhou Meritor Axle Company Limited
3
Aftermarket
Ordinary
0
60.00
Meritor (China) Holdings Limited
4
Holding company
Ordinary
0
100.00
Meritor Drivetrain Systems (Nanjing) Company Limited
5
Merchandising of drivetrain systems
Ordinary
0
100.00
Registered office addresses:
1
The Grove, 21 Pine Road, Belleville, St. Michael, Barbados 11113
2
4th Floor, Al-Ameen Towers, 69, Hosur Road, Bangalore 560027, Karnataka, India
3
9 Zhujiang Road, Tongshan Economic Development Zone, Xuzhou, Jiangsu Province, People's Republic of China
4
Room 123, Block 1, No. 3688 Jindu Road Xin Zhuang Industry Park Shanghai China
5
No. 118, East Taiyuan Road Science Park, JiangNing, District NanJing, China
11
Creditors: amounts falling due within one year
2024
2023
£ 000
£ 000
Amounts owed to group undertakings
185
163
Accruals and deferred income
14
22
199
185
Amounts owed to group undertakings attract no interest and are payable on demand.
MERITOR HEAVY VEHICLE SYSTEMS (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 20 -
12
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£ 000
£ 000
Issued and fully paid
Ordinary shares of £1.00 each
27,559,341
27,559,341
27,559
27,559
13
Ultimate controlling party
The immediate parent company is Meritor Heavy Vehicle Systems Limited, a company incorporated in England and Wales.
The ultimate parent company and controlling party of Meritor Heavy Vehicle Systems (Manufacturing) Limited is Cummins, Inc., incorporated in the United States of America. Cummins, Inc. is also the parent undertaking of the smallest and largest group which includes the company for which group financial statements are prepared. Copies of the group financial statements of Cummins, Inc. are available from the company’s registered address: 500 Jackson Street Box 3005 Columbus, IN 47201 United States. They can also be downloaded from the website www.cummins.com.
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