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REGISTERED NUMBER: 08488525 (England and Wales)












STRATEGIC REPORT, DIRECTORS' REPORT AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2023

FOR

MEL AVIATION COMPONENTS LIMITED

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)






CONTENTS OF THE FINANCIAL STATEMENTS
for the year ended 31 October 2023




Page

Company Information 1

Strategic Report 2

Directors' Report 4

Report of the Independent Auditors 5

Income Statement 9

Other Comprehensive Income 10

Balance Sheet 11

Statement of Changes in Equity 12

Cash Flow Statement 13

Notes to the Cash Flow Statement 14

Notes to the Financial Statements 15


MEL AVIATION COMPONENTS LIMITED

COMPANY INFORMATION
for the year ended 31 October 2023







DIRECTORS: Mr N G Harvey
Mr R W B Argent
Mr M J Levick



REGISTERED OFFICE: Unit 2 Centron
Crompton Way
Crawley
West Sussex
RH10 9QR



REGISTERED NUMBER: 08488525 (England and Wales)



SENIOR STATUTORY AUDITOR: Mr Paul Dell FCA



AUDITORS: Raffingers LLP, Statutory Auditor
Chartered Certified Accountants
19-20 Bourne Court
Southend Road
Woodford Green
Essex
IG8 8HD

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

STRATEGIC REPORT
for the year ended 31 October 2023

The directors present their strategic report for the year ended 31 October 2023.

REVIEW OF BUSINESS
The company has had a very successful year with turnover increasing by 86% to £29.3m (2022: £15.7m) as the business recovered well from the global pandemic which severely hit the aviation industry as planes were grounded. Gross margin also improved to 29.7% (2022: 25.8%)

Operating profit was £6.60m (2022: £2.23m). The state of affairs at the balance sheet date is considered to be satisfactory with net assets of £9.6m (2022: £4.71m).

The key financial performance indicators for the company are as follows:-

2023 2022 Measure
Gross Profit Margin 29.7% 25.8% Gross Profit/Turnover
Debtors days 73 days 84 days Trade Debtors/Turnover
Creditor days 112 days 182 days Trade Creditors / Cost of Sales


Debtor and creditor days include related party balances.

PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties affecting the business include:-
- Regulatory - the company operates in a highly regulated area. It maintains extremely high standards of quality control over its products and services.
- Retention of customers - the company maintains strong relationships with each of its key customers and has established procedures for monitoring performance and service levels.
- Competitive risk - the company's reliance on any single customer has reduced over the past few years as part of its strategy to mitigate its risk in this area.
- Market conditions - the company's ability to adapt quickly to changes in the marketplace, mitigates the risk of this area.
- Exchange rate risk - the company trades in dollars and maintains its banking and financing in dollar denominated accounts where possible to mitigate any exchange rate risk. There are translation differences at each year end but these are accounting adjustments for statutory reporting purposes.

The directors believe that the company has adequate financial resources in place to meet its forecast trading requirements and all risks and uncertainties are managed appropriately.

FUTURE DEVELOPMENTS
The company will continue to expand its product range whilst concentrating on products and services that deliver higher margins.

The directors are confident of delivering sustainable future growth in its sector.


MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

STRATEGIC REPORT
for the year ended 31 October 2023

FINANCIAL INSTRUMENTS
The company has banking facilities in place with IGF Business Credit and operates within its facility limits.

The company has not entered into any hedging arrangements as the directors perceive the exchange rate risk to the business to be low. Although the reporting currency is in sterling, the operational currency is predominantly the US dollar. There are accounting adjustments in the accounts in relation to the translation of currency balances at the period end.

ON BEHALF OF THE BOARD:





Mr N G Harvey - Director


23 July 2024

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

DIRECTORS' REPORT
for the year ended 31 October 2023

The directors present their report with the financial statements of the company for the year ended 31 October 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of supplying components and equipment to the aviation sector.

DIVIDENDS
No dividends will be distributed for the year ended 31 October 2023.

DIRECTORS
Mr N G Harvey has held office during the whole of the period from 1 November 2022 to the date of this report.

Other changes in directors holding office are as follows:

Mr R W B Argent - appointed 11 April 2023
Mr M J Levick - appointed 11 April 2023

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Directors' 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:





Mr N G Harvey - Director


23 July 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MEL AVIATION COMPONENTS LIMITED

Opinion
We have audited the financial statements of MEL Aviation Components Limited (the 'company') for the year ended 31 October 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 October 2023 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.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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.

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Strategic Report and the 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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MEL AVIATION COMPONENTS LIMITED


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 where 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 Statement of Directors' Responsibilities set out on page four, 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 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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MEL AVIATION COMPONENTS LIMITED


Auditors' 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 a Report of the Auditors 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:

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 company's 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, taxation legislation and data protection, employment, health and safety legislation.
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence where necessary.

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 transactions;
- tested the appropriateness of journal entries;
- 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.

To address the risk that revenue could be misstated due to fraud, we:
- obtained an understanding of the company's revenue recognition policies and compared these to the accounting standard;
- performed a walkthrough to confirm our understanding of the processes and controls through which the business initiates, records, processes and reports revenue transactions;
- tested a sample of revenue transactions to supporting evidence; and
- tested, on a sample basis, revenue related balances in the balance sheet.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- reading the minutes of meetings of those charged with governance;
- enquiring of management as to actual and potential litigation and claims; and
- reviewing correspondence with HMRC and relevant regulators.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, 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 Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MEL AVIATION COMPONENTS LIMITED


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 a Report of the Auditors 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 Paul Dell FCA (Senior Statutory Auditor)
for and on behalf of Raffingers LLP, Statutory Auditor
Chartered Certified Accountants
19-20 Bourne Court
Southend Road
Woodford Green
Essex
IG8 8HD

23 July 2024

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

INCOME STATEMENT
for the year ended 31 October 2023

2023 2022
Notes £    £   

TURNOVER 4 29,344,962 15,756,299

Cost of sales (20,618,090 ) (11,689,146 )
GROSS PROFIT 8,726,872 4,067,153

Administrative expenses (2,320,115 ) (1,839,880 )
6,406,757 2,227,273

Other operating income 200,482 5,503
OPERATING PROFIT 6 6,607,239 2,232,776


Interest payable and similar expenses 7 (300,391 ) (131,593 )
PROFIT BEFORE TAXATION 6,306,848 2,101,183

Tax on profit 8 (1,429,603 ) (402,678 )
PROFIT FOR THE FINANCIAL YEAR 4,877,245 1,698,505

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

OTHER COMPREHENSIVE INCOME
for the year ended 31 October 2023

2023 2022
Notes £    £   

PROFIT FOR THE YEAR 4,877,245 1,698,505


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

4,877,245

1,698,505

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

BALANCE SHEET
31 October 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 9 53,531 93,230

CURRENT ASSETS
Stocks 10 15,442,945 9,303,635
Debtors 11 10,367,256 5,111,705
Cash at bank 100,320 80,885
25,910,521 14,496,225
CREDITORS
Amounts falling due within one year 12 16,352,815 9,840,700
NET CURRENT ASSETS 9,557,706 4,655,525
TOTAL ASSETS LESS CURRENT
LIABILITIES

9,611,237

4,748,755

CREDITORS
Amounts falling due after more than one
year

13

(16,667

)

(25,833

)

PROVISIONS FOR LIABILITIES 17 (9,926 ) (15,523 )
NET ASSETS 9,584,644 4,707,399

CAPITAL AND RESERVES
Called up share capital 18 200 200
Retained earnings 19 9,584,444 4,707,199
SHAREHOLDERS' FUNDS 9,584,644 4,707,399

The financial statements were approved by the Board of Directors and authorised for issue on 23 July 2024 and were signed on its behalf by:





Mr N G Harvey - Director


MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

STATEMENT OF CHANGES IN EQUITY
for the year ended 31 October 2023

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 November 2021 200 3,008,694 3,008,894

Changes in equity
Total comprehensive income - 1,698,505 1,698,505
Balance at 31 October 2022 200 4,707,199 4,707,399

Changes in equity
Total comprehensive income - 4,877,245 4,877,245
Balance at 31 October 2023 200 9,584,444 9,584,644

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

CASH FLOW STATEMENT
for the year ended 31 October 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 1,413,644 (747,696 )
Interest paid (300,391 ) (131,593 )
Tax paid (52,069 ) -
Net cash from operating activities 1,061,184 (879,289 )

Cash flows from investing activities
Purchase of tangible fixed assets (3,790 ) (5,832 )
Net cash from investing activities (3,790 ) (5,832 )

Cash flows from financing activities
New loans in year 450,309 1,207,830
Loan repayments in year (35,833 ) (35,833 )
Loan to parent company (316,755 ) (197,040 )
Hire purchase repayments - (25,147 )
Amount withdrawn by directors (1,135,680 ) (50,000 )
Net cash from financing activities (1,037,959 ) 899,810

Increase in cash and cash equivalents 19,435 14,689
Cash and cash equivalents at beginning of
year

2

80,885

66,196

Cash and cash equivalents at end of year 2 100,320 80,885

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE CASH FLOW STATEMENT
for the year ended 31 October 2023

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
2023 2022
£    £   
Profit before taxation 6,306,848 2,101,183
Depreciation charges 43,488 44,051
Finance costs 300,391 131,593
6,650,727 2,276,827
Increase in stocks (6,139,310 ) (2,863,706 )
Increase in trade and other debtors (3,803,116 ) (1,954,734 )
Increase in trade and other creditors 4,705,343 1,793,917
Cash generated from operations 1,413,644 (747,696 )

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 October 2023
31.10.23 1.11.22
£    £   
Cash and cash equivalents 100,320 80,885
Year ended 31 October 2022
31.10.22 1.11.21
£    £   
Cash and cash equivalents 80,885 66,196


3. ANALYSIS OF CHANGES IN NET DEBT

At 1.11.22 Cash flow At 31.10.23
£    £    £   
Net cash
Cash at bank 80,885 19,435 100,320
80,885 19,435 100,320
Debt
Debts falling due within 1 year (2,309,541 ) (423,643 ) (2,733,184 )
Debts falling due after 1 year (25,833 ) 9,166 (16,667 )
(2,335,374 ) (414,477 ) (2,749,851 )
Total (2,254,489 ) (395,042 ) (2,649,531 )

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 October 2023

1. STATUTORY INFORMATION

MEL Aviation Components Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The preparation of financial statements in compliance with FRS 102 which, requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3). The following principal accounting policies have been applied:

Turnover
Turnover represents the invoiced value of goods and services supplied to external customers, excluding value added tax. Turnover is recognised and a debtor recorded as accrued income once all obligations under the sales order have been performed.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Short leasehold - Straight line over 10 years
Fixtures and fittings - 20% on cost
Motor vehicles - 20% on cost
Computer equipment - 20% on cost

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. The company assesses at each reporting date whether tangible fixed assets are fully impaired.

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since last annual reporting date in the pattern by which the company expects to consume an asset's future economic benefits.

Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell (net realisable value). Costs, which comprise direct production costs, are based on the method most appropriate to the type of inventory class. Overheads are charged to profit or loss as incurred. Net realisable value is based on the estimated selling price less any estimated completion or selling costs.

When stocks are sold, the carrying amount of those stocks is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of stocks to net realisable value and all losses of stocks are recognised as an expense in the period in which the write-down or loss occurs. The amount of any reversal of any write-down of stocks is recognised as a reduction in the amount of stocks recognised as an expense in the period in which the reversal occurs.

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 October 2023

2. ACCOUNTING POLICIES - continued

Financial instruments
Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument and derecognised when in the case of assets, the contractual rights to cash flows from the assets expire or substantially the risks and rewards of ownership are transferred to another party, or in the case of liabilities, when the company's obligations are discharged, expire or cancelled.

The company holds the following financial instruments, all of which meet the conditions to be classified as basic instruments:

- Cash, short term trade debtors and creditors

Such instruments are initially measured at transaction price, transaction costs, and are subsequently carried at the undiscounted amount of cash or other consideration expected to be paid or received, after taking account of impairment adjustment.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies
The financial statements are presented in sterling. The company's functional currency is the US dollar. Monetary items denominated in other currencies are translated at the rate prevailing at the end of the reporting period. All resulting translation differences are taken to the profit and loss account.

Pension costs and other post-retirement benefits
The company operates a fully insured defined contribution pension scheme for certain members of staff and the pension charge represents the amounts paid by the company to the fund during the year. These contributions are invested separately from the company's assets.

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 October 2023

2. ACCOUNTING POLICIES - continued

Hire purchase and leasing commitments
Assets that are held by the company under leases which transfer to the company substantially all the risks and rewards of ownership are classified as being held under finance leases. Leases which do not transfer substantially all the risks and rewards of ownership to the company are classified as operating leases.

Assets held under finance leases are initially recognised as assets of the company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the company's policy on borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight­ line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Related parties
For the purposes of these financial statements, a party is considered to be related to the company if:
- the party has the ability, directly or indirectly, through one or more intermediaries, to control the Company or exercise significant influence over the company in making financial and operating policy decisions, or has joint control over the company; or
- the company and the party are subject to common control; or
- the party is an associate of the company or a joint venture in which the company is a venturer; or
- the party is a member of key management personnel of the company or the company's parent, or a close family member of such an individual, or is an entity under the control, joint control or significant influence of such individuals; or
- the party is a close family member of a party referred to in (i) or is an entity under the control, joint control or significant influence of such individuals; or
- the party is a post-employment benefit plan which is for the benefit of employees of the company or of any entity that is a related party of the company; or
- the party, or any member of a group of which it is part, provides key management personnel services to the company or its parent.

Loans and borrowings
Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measured at amortised cost using the effective interest rate method, less impairment.

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The items in the financial statements where these judgements and estimates have been made include:
• assessing the useful economic lives attributed to tangible fixed assets used to determine the annual depreciation charge, and
• the provision required for any bad or doubtful debts, and
• the provision required for any slow moving or obsolete stock.

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 October 2023

4. TURNOVER

An analysis of turnover by class of business is given below:
2023 2022
£ £
Outright sales24,179,54112,270,499
Repairs3,160,9282,525,411
Exchange 2,004,493 960,389
29,344,96215,756,299

An analysis of turnover by geographical market is given below:
2023 2022
£ £
United Kingdom4,011,2673,729,334
European Union10,155,705463,834
Rest of the World15,177,99011,563,131
29,344,96215,756,299

5. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 792,036 490,738
Social security costs 74,307 54,812
Other pension costs 26,076 18,743
892,419 564,293

The average number of employees during the year was as follows:
2023 2022

Administration and management 6 4
Operations 6 2
Sales 7 4
19 10

2023 2022
£    £   
Directors' remuneration - -

6. OPERATING PROFIT

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

2023 2022
£    £   
Hire of plant and machinery 14,495 6,416
Other operating leases 309,130 293,523
Depreciation - owned assets 43,489 14,836
Depreciation - assets on hire purchase contracts or finance leases - 29,216
Auditors' remuneration 30,000 27,000
Foreign exchange differences (198,255 ) 286,018

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 October 2023

7. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Interest payable 300,391 131,593

8. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 1,435,200 409,460

Deferred tax:
Origination and reversal of timing differences (5,597 ) (6,782 )
Tax on profit 1,429,603 402,678

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
Profit before tax 6,306,848 2,101,183
Profit multiplied by the standard rate of corporation tax in the UK of
22.518% (2022 - 19%)

1,420,176

399,225

Effects of:
Expenses not deductible for tax purposes 6,872 3,454
Depreciation in excess of capital allowances 8,292 6,780
Deferred tax adjustment (5,597 ) (6,781 )
Other adjustments (140 ) -
Total tax charge 1,429,603 402,678

Factors that may affect future tax charges

From 1 April 2023, the corporation tax main rate for non-ring fenced profits increased to 25%

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 October 2023

9. TANGIBLE FIXED ASSETS
Fixtures
Short and Motor Computer
leasehold fittings vehicles equipment Totals
£    £    £    £    £   
COST
At 1 November 2022 34,484 146,788 6,595 62,573 250,440
Additions - 3,500 - 290 3,790
At 31 October 2023 34,484 150,288 6,595 62,863 254,230
DEPRECIATION
At 1 November 2022 11,782 97,752 6,595 41,081 157,210
Charge for year 3,448 29,144 - 10,897 43,489
At 31 October 2023 15,230 126,896 6,595 51,978 200,699
NET BOOK VALUE
At 31 October 2023 19,254 23,392 - 10,885 53,531
At 31 October 2022 22,702 49,036 - 21,492 93,230

10. STOCKS
2023 2022
£    £   
Finished goods 15,442,945 9,303,635

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade debtors 5,886,888 3,621,044
Amounts owed by group undertakings 1,615,296 1,298,541
Other debtors 1,525,769 111,038
Directors' current accounts 1,135,680 -
VAT 110,498 6,781
Prepayments 93,125 74,301
10,367,256 5,111,705

12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Bank loans and overdrafts (see note 14) 2,733,184 2,309,541
Trade creditors 6,489,895 5,824,594
Tax 1,622,122 238,991
Social security and other taxes 22,090 59,653
Other creditors 4,401,614 5,018
Accruals and deferred income 1,083,910 1,402,903
16,352,815 9,840,700

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 October 2023

13. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
2023 2022
£    £   
Bank loans (see note 14) 16,667 25,833

14. LOANS

An analysis of the maturity of loans is given below:

2023 2022
£    £   
Amounts falling due within one year or on demand:
Bank loans 2,733,184 2,309,541

Amounts falling due between one and two years:
Bank loans 16,667 10,000

Amounts falling due between two and five years:
Bank loans - 15,833

15. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
£    £   
Within one year 287,587 293,279
Between one and five years 1,098,206 1,111,397
In more than five years 91,309 365,705
1,477,102 1,770,381

16. SECURED DEBTS

The following secured debts are included within creditors:

2023 2022
£    £   
Bank loans 2,749,851 2,335,374

IGF Business Credit Limited hold fixed and floating charges over the assets of the company in support of banking and invoice discounting facilities.

The finance lease liabilities are secured on the related assets.

17. PROVISIONS FOR LIABILITIES
2023 2022
£    £   
Deferred tax 9,926 15,523

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 October 2023

17. PROVISIONS FOR LIABILITIES - continued

Deferred
tax
£   
Balance at 1 November 2022 15,523
Credit for the year (5,597 )
Balance at 31 October 2023 9,926

18. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
200 Ordinary £1 200 200

19. RESERVES
Retained
earnings
£   

At 1 November 2022 4,707,199
Profit for the year 4,877,245
At 31 October 2023 9,584,444

20. PENSION COMMITMENTS

The company operates a fully insured defined contribution pension scheme for certain members of staff and the director. The pension charge represents the amounts paid by the company to the fund during the year. Payments during the year, amounted to £26,076 (2022: £18,743). These contributions are invested separately from the company's assets.

21. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to a director subsisted during the years ended 31 October 2023 and 31 October 2022:

2023 2022
£    £   
Mr N G Harvey
Balance outstanding at start of year - -
Amounts advanced 1,135,680 -
Amounts repaid - -
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year 1,135,680 -

The directors advance was repaid within 9 months of the year end.

MEL AVIATION COMPONENTS LIMITED (REGISTERED NUMBER: 08488525)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 October 2023

22. RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

During the year the total services received from related companies of which Mr N G Harvey is a director were as follows:




Services
received
during the
year

Services
received
during the year



Creditors



Creditors
2023 2022 2023 2022
£    £    £    £   
MEL Aviation Limited 1,057,031 843,461 3,565,990 3,607,591

During the year the total services supplied to related companies of which Mr N G Harvey is a director were as follows:



Services
supplied during
the year
Services
supplied
during the year


Debtors


Debtors
2023 2022 2023 2022
£    £    £    £   
MEL Aviation Limited 1,072,715 83,744 864,976 189,351
Clement Clarke Communications
Limited

-

-

170

170
Flycom Avionics Limited - - 2,318 2,318

Included in other debtors due within one year is a loan balance of £100,739 (2022: £100,739) from MEL Aviation Ltd.

23. AUDITOR LIABILITY LIMITATION AGREEMENT

The company has entered into a liability limitation agreement with Raffingers, the statutory auditor, in respect of the statutory audit for the year ended 31 October 2023. The proportionate liability agreement follows the standard terms in Appendix B to the Financial Reporting Council's June 2008 Guidance on Auditor Liability Agreements, and was approved by the members on 8 November 2023.