Company registration number 00379136 (England and Wales)
MERITOR HEAVY VEHICLE SYSTEMS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
MERITOR HEAVY VEHICLE SYSTEMS LIMITED
COMPANY INFORMATION
Directors
Mr H James
Mrs M Eyles
(Appointed 1 August 2024)
Mr A Holthouse
(Appointed 1 August 2024)
Mr E Smith
(Appointed 1 August 2024)
Secretary
Mr H James
Company number
00379136
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 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 - 23
MERITOR HEAVY VEHICLE SYSTEMS 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 and business review

The company's principal activity is that of a holding company for certain investments.

Principal risks and uncertainties

The company is financed by short-term intercompany loans and is reliant on continuing support from the Cummins, Inc. group to meet on-going funding requirements. The directors have obtained a letter of support with assurance that this support will remain in place for at least the next twelve months from the signing of these financial statements to enable the company to meet any remaining obligations (see note 1 for further details)

The company is exposed to potential impairments of its underlying investments. Underlying net worth of investments 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, 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.

Future developments

The directors expect the general level of activity to remain consistent with 2024 in the forthcoming year.

Key performance indicators

The reported loss in the year was £9,961,000 (2023: £323,000) as noted on page 9. The loss in the year was driven by interest on long-term borrowings. In the prior year, the loss was also driven by interest on long-term borrowings but it was largely offset by translation gains on US dollar denominated borrowings.

 

The net liabilities as at 31 December 2024 were £119,073,000 (2023: £109,112,000).

 

Owing to the simplistic 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 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 E M Guy
(Resigned 15 February 2024)
Mrs M Eyles
(Appointed 1 August 2024)
Mr A Holthouse
(Appointed 1 August 2024)
Mr E Smith
(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’s primary activity is that of a holding company of a group of companies. The company is also responsible for discharging responsibilities related to legacy warranty commitments. Consequently the most significant financial risk is that associated with liquidity. The Company has received a formal letter of support from Arvinmeritor Finance Ireland Unlimited Company committing to ensure the company can meet its liabilities as they fall due and the company is also part of the Cummins, Inc. group cash pooling scheme which ensures sufficient funds are available to maintain liquidity. Further details regarding liquidity risk can be found in the Statement of accounting policies in the financial statements.

Future developments

Details of future development 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 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:

 

 

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:

 

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act.

Going concern

Whilst the company has net current liabilities of £130,137,000 this is driven by the classification of the long-term loan due to Meritor Arvin Finance Ireland Limited (hereafter AFI) as due within one year owing to the existence of a call option enabling AFI to call the loan annually in August each year. The directors have received confirmation from AFI that the call option will not be exercised in August 2024. In addition the company has received a letter of support from AFI who have guaranteed the company £50k to meet its day to day working capital requirements for a period of at least twelve months from signing the 2024 financial statements. The directors deem this amount to be sufficient to cover the company’s financial obligations and legacy warranty commitments in this period and have assessed AFI to have sufficient resources to provide this support.

In addition, the company is part of the wider Cummins Inc. group. The directors have concluded that the company has sufficient resources to continue to pay amounts due 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:

 

The directors therefore believe that it is appropriate to prepare the financial statements on the going concern basis.

MERITOR HEAVY VEHICLE SYSTEMS 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 LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MERITOR HEAVY VEHICLE SYSTEMS LIMITED
- 5 -
Opinion

We have audited the financial statements of Meritor Heavy Vehicle Systems 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:

Basis for qualified opinion

With respect to the carrying value of the company's investment in Meritor Heavy Vehicle Systems (Manufacturing) Limited of £27,162,000 as at 31 December 2024 and 31 December 2023, the audit evidence available to us was limited because Meritor Heavy Vehicle Systems (Manufacturing) Limited owns a number of subsidiary companies which do not prepare publicly available audited accounts. We were unable to obtain sufficient appropriate audit evidence regarding the investment carrying values 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 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MERITOR HEAVY VEHICLE SYSTEMS LIMITED
- 6 -

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

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

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the carrying amount of company’s investment in Meritor Heavy Vehicle Systems (Manufacturing) 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report, based on the work undertaken in the course of the audit:

 

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 or the directors’ report.’

Matters on which we are required to report by exception

Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion:

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 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MERITOR HEAVY VEHICLE SYSTEMS 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.

 

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 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:

To address the risk of fraud through management bias and override of controls, we:

 

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 for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

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

MERITOR HEAVY VEHICLE SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MERITOR HEAVY VEHICLE SYSTEMS LIMITED
- 8 -
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 LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
2024
2023
Notes
£ 000
£ 000
Administrative expenses
(136)
(45)
Interest receivable and similar income
6
-
0
5,688
Interest payable and similar expenses
7
(9,825)
(5,966)
Loss before taxation
(9,961)
(323)
Tax on loss
8
-
0
-
0
Loss for the financial year
(9,961)
(323)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

MERITOR HEAVY VEHICLE SYSTEMS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
2024
2023
£ 000
£ 000
Loss for the year
(9,961)
(323)
Other comprehensive income
-
-
Total comprehensive expense for the year
(9,961)
(323)
MERITOR HEAVY VEHICLE SYSTEMS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 11 -
2024
2023
Notes
£ 000
£ 000
£ 000
£ 000
Fixed assets
Intangible assets
9
1
1
Investments
10
27,162
27,162
27,163
27,163
Current assets
Debtors
12
6
-
0
Creditors: amounts falling due within one year
13
(130,143)
(136,275)
Net current liabilities
(130,137)
(136,275)
Total assets less current liabilities
(102,974)
(109,112)
Creditors: amounts falling due after more than one year
16
(16,099)
-
0
Net liabilities
(119,073)
(109,112)
Capital and reserves
Called up share capital
18
52,618
52,618
Profit and loss reserves
(171,691)
(161,730)
Total equity
(119,073)
(109,112)
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 00379136 (England and Wales)
MERITOR HEAVY VEHICLE SYSTEMS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
Share capital
Profit and loss reserves
Total
£ 000
£ 000
£ 000
Balance at 1 January 2023
52,618
(161,407)
(108,789)
Year ended 31 December 2023
Loss and total comprehensive expense
-
(323)
(323)
Balance at 31 December 2023
52,618
(161,730)
(109,112)
Year ended 31 December 2024:
Loss and total comprehensive expense
-
(9,961)
(9,961)
Balance at 31 December 2024
52,618
(171,691)
(119,073)
MERITOR HEAVY VEHICLE SYSTEMS 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 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 (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:

 

 

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 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.2
Going concern

Whilst the company has net current liabilities of £130,137,000 this is driven by the classification of the long-term loan due to Meritor Arvin Finance Ireland Limited (hereafter AFI) as due within one year owing to the existence of a call option enabling AFI to call the loan annually in August each year. The directors have received confirmation from AFI that the call option will not be exercised in trueAugust 2024. In addition the company has received a letter of support from AFI who have guaranteed the company £50k to meet its day to day working capital requirements for a period of at least twelve months from signing the 2024 financial statements. The directors deem this amount to be sufficient to cover the company’s financial obligations and legacy warranty commitments in this period and have assessed AFI to have sufficient resources to provide this support.

In addition, the company is part of the wider Cummins Inc. group. The directors have concluded that the company has sufficient resources to continue to pay amounts due 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:

 

The directors therefore believe that it is appropriate to prepare the financial statements on the going concern basis.

1.3
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Software
3 years straight line
1.4
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.

MERITOR HEAVY VEHICLE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
1.5
Impairment of fixed assets

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

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

 

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

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

1.6
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.

1.7
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.

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.

MERITOR HEAVY VEHICLE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
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 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.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

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

MERITOR HEAVY VEHICLE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 17 -
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.

1.8
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.

1.9
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.

1.10

Interest receivable

Interest income is recognised when it is probable that the economic benefit 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 at the effective interest rate applicable.

1.11

Consolidation

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.

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 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 18 -
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 and loss account 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 if it were to be sold at the reporting date. The carrying amount of fixed asset investments at the balance sheet date is £27,162,000 (2023: £27,162,000). No impairment loss was 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
4
Employees

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

2024
2023
Number
Number
Total
-
0
-
0
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 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
Other income from investments
Exchange gain on long-term US$ denominated loan from group undertakings
-
0
5,688
MERITOR HEAVY VEHICLE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
7
Interest payable and similar expenses
2024
2023
£ 000
£ 000
Interest on loans from group undertakings
8,310
5,966
Exchange loss on long-term US$ denominated loan from group undertakings
1,515
-
0
9,825
5,966
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
(9,961)
(323)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
(2,490)
(76)
Tax effect of expenses that are not deductible in determining taxable profit
378
-
0
Transfer pricing and thin capitalisation adjustments
2,077
65
Deferred tax not recognised
8
11
Group relief surrendered/(claimed)
27
-
0
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 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
Intangible fixed assets
Software
£ 000
Cost
At 1 January 2024 and 31 December 2024
19
Amortisation and impairment
At 1 January 2024 and 31 December 2024
18
Carrying amount
At 31 December 2024
1
At 31 December 2023
1
MERITOR HEAVY VEHICLE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 20 -
10
Fixed asset investments
2024
2023
Notes
£ 000
£ 000
Investments in subsidiaries
11
26,951
26,951
Other investments
11
211
211
27,162
27,162

 

Movements in fixed asset investments
Shares in subsidiaries
Other investments
Total
£ 000
£ 000
£ 000
Cost or valuation
At 1 January 2024 & 31 December 2024
40,077
251
40,328
Impairment
At 1 January 2024 & 31 December 2024
13,126
40
13,166
Carrying amount
At 31 December 2023 & 31 December 2024
26,951
211
27,162
MERITOR HEAVY VEHICLE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 21 -
11
Subsidiaries

Details of the company's subsidiaries and associates at 31 December 2024 are as follows:

Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Meritor (China) Holdings Limited
2
Holding company
Ordinary
0
100.00
Meritor Aftermarket Netherlands BV
3
Sales and marketing
Ordinary
100.00
-
Meritor Aftermarket Spain S.A.U.
4
Sales and marketing
Ordinary
100.00
-
Meritor Aftermarket UK Limited
5
Sales and marketing
Ordinary
100.00
-
Meritor Commercial Vehicle Systems India Private Limited
1
Manufacturing of equipment for motor vehicles and trailers
Ordinary
0
99.97
Meritor Drivetrain Systems (Nanjing) Company Limited
6
Merchandising of drivetrain systems
Ordinary
0
100.00
Meritor Germany GmbH
9
Sales and marketing
Ordinary
25.95
-
Meritor Heavy Vehicle Systems (Manufacturing) Limited
5
Holding company
Ordinary
100.00
-
Meritor Holdings (Barbados) Limited
7
Holding company
Ordinary
0
100.00
Xuzhou Meritor Axle Company Limited
8
Merchandising of mining truck axles
Ordinary
0
60.00

Registered office addresses:

1
4th Floor, Al-Ameen Towers, 69, Hosur Road, Bangalore 560027, Karnataka, India
2
Room 123, Block 1, No. 3688 Jindu Road Xin Zhuang Industry Park Shanghai China
3
Saturnusstraat 46, Hoofddorp 2132 HB Netherlands
4
Ronda General Mitre 28-30 bajos 08017 Barcelona
5
3 More London Riverside, London, SE1 2AQ
6
No. 118, East Taiyuan Road Science Park, JiangNing, District NanJing, China
7
The Grove, 21 Pine Road, Belleville, St. Michael, Barbados 11113
8
9 Zhujiang Road, Tongshan Economic Development Zone, Xuzhou, Jiangsu Province, People's Republic of China
9
Vogelweiherstr. 20, 90441 Nürnberg, Germany
12
Debtors
2024
2023
Amounts falling due within one year:
£ 000
£ 000
Amounts owed by group undertakings
6
-
0

Amounts owed by group undertakings attract no interest and are payable on demand.

MERITOR HEAVY VEHICLE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
13
Creditors: amounts falling due within one year
2024
2023
£ 000
£ 000
Amounts owed to group undertakings
130,129
136,258
Accruals and deferred income
14
17
130,143
136,275

Amounts owed to group undertakings attract no interest and are payable on demand.

Amounts due to ArvinMeritor Finance International Unlimited attract interest at a 1-month SONIA rate plus 1.5% and are payable in August 2027 with a call option to recall on 1st August each year.

Included within the 2023 amounts owed to group undertakings is an amount of £16,099,000 to Meritor Heavy Vehicle Systems (Manufacturing) Limited which attracts interest at a 1 month SONIA rate plus 0.5% which was repayable on demand.

14
Other creditors falling due after one year
2024
2023
£ 000
£ 000
Amounts owed to group undertakings
16,099
-
0

The company is part of a group wide cash pooling agreement. Interest is received on any amount owed by the cash pooling entity at a rate of SONIA less 0.5% and paid on any amount owed to the cash pooling entity at a rate of SONIA plus 0.5% and are repayable on 30 September 2028.

 

15
Deferred taxation

A deferred tax asset of £15,043,035 (2023: £15,035,445) has not been recognised in respect of losses and capital losses as there is insufficient evidence that the asset will be recovered. This asset would be recovered and made sufficient taxable profits from non-trade activities in future accounting periods. An analysis of the unrecognised deferred tax asset is as follows:

Assets
Assets
2024
2023
Balances:
£ 000
£ 000
Capital losses
150
150
Losses and other deductions
14,893
14,886
15,043
15,036
MERITOR HEAVY VEHICLE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
16
Creditors: amounts falling due after more than one year
2024
2023
£ 000
£ 000
Amounts due to group undertakings (due in 2-5 years)
16,099
-
0

The company is part of a group wide cash pooling agreement. Interest is received on any amount owed by the cash pooling entity at a rate of SONIA less 0.5% and paid on any amount owed to the cash pooling entity at a rate of SONIA plus 0.5% and are repayable on 30 September 2028.

17
Retirement benefit schemes

Past employees of the company had access to membership of the ArvinMeritor UK Pension Scheme, which is a funded scheme of the defined benefit type, providing retirement benefits based on salary. However, the final salary section of the Scheme is closed to new entrants and future accrual. The assets of the Scheme are held under trust, separately from those of the participating employers of the Scheme.

The ArvinMeritor UK Pension Scheme is a Multi-Employer Scheme, however, there is no contractual agreement or stated policy for charging the net defined benefit cost to individual group companies, therefore, in accordance with section 28 of FRS 102, the company which has legal responsibility for the Scheme, Meritor Heavy Vehicle Braking Systems (UK) Limited will account for the Scheme as a defined benefit plan in its financial statements and other entities including this company will account for the Scheme as a defined contribution plan.

The company has no liability to the Scheme and has no right to share in any surplus.

The company did not make any contribution to the Scheme in the current or preceding year.

Full details of the Scheme are provided in the financial statements of Meritor Heavy Vehicle Braking Systems (UK) Limited. At 31 December 2024 the Scheme had a surplus of £36.6 million (2023: £39.3 million).

18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£ 000
£ 000
Issued and fully paid
Ordinary shares of £1.00 each
52,617,895
52,617,895
52,618
52,618
19
Ultimate controlling party

The immediate parent company is ArvinMeritor Limited, a company incorporated in England and Wales. Copies of the financial statements of ArvinMeritor Limited are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

 

The ultimate parent company and controlling party of ArvinMeritor 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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