Company Registration No. 07712250 (England and Wales)
MTL ADVANCED LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MTL ADVANCED LTD
COMPANY INFORMATION
Directors
J S Hartley
W Tierney
Secretary
A B Sedgley
Company number
07712250
Registered office
Britannia House
Junction Street
Darwen
Lancashire
BB3 2RB
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
Bankers
Lloyds Bank PLC
Church St
Blackburn
BB2 1JQ
MTL ADVANCED LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 23
MTL ADVANCED LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The Directors present their Strategic Report for the year ended 31 December 2023, as follows:

Business Review

The business has had another positive year with some further growth in turnover and operating profit held despite significantly increased utility costs. There is a great deal of optimism about further future growth opportunities, with exciting projects in the pipeline and future success will continue to be grounded in upholding ongoing exceptional levels of customer service, product quality and value for money offerings in the market.

 

Total headcount at year end was 303

 

The directors consider the business to be well placed for the future.

Principal risks and uncertainties

The principal risks to the business include the following:

 

  1. Operating in a very competitive marketplace. The company has consistently demonstrated its ability to mitigate this risk through provision of high-quality products at competitive prices with strong values in customer care and reliable delivery performance.

  2. Changes in technology. The company mitigates this risk by continued re-investment in the latest available state of the art production equipment, allowing control of operating costs and highest levels of efficiency to maintain its position as market leader.

  3. Economic Uncertainty. At the date of this report, there are many uncertainties around the economic and other general impacts of recent events in Ukraine and any potential impacts on the business.

  4. Excessive and intrusive government legislation. A company’s ability to remain competitive in a global supply chain can be negatively affected by unnecessary legislation and “red-tape”.

 

Financial and other performance indicators

During the year, various indicators were used to monitor and compare the company’s performance. The following are regarded as the key financial indicators of performance, all of which can be observed in the attached financial statements. The company uses other performance indicators in its day to day operations but the directors consider these commercially sensitive and they are therefore not specifically disclosed.

 

-    Turnover £48.5 million (2022: £46.0 million)

-    Gross Margin 22.8% (2022: 24.3%)

-    Operating Profit £4.67 million (2022: £4.66 million)

 

Other performance indicators

The directors have a responsibility under S172 of the Companies Act 2006 to act in a way that promotes the company’s success for the benefit of the members as a whole, and to have regard to the long-term effects of decisions on the company and stakeholders. The following statement outlines the way in which these responsibilities are handled:

 

The company is privately held and provides employment, training and financial reward to the owners and employees, including profit sharing arrangements.

 

Strategic decisions are based on medium and long-term objectives. In particular, the policy of continued investment in latest state of the art production technologies ensures high quality and efficiency of output and provides an ongoing competitive edge in the market.

MTL ADVANCED LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

Key stakeholders, and the ways in which we engage with them, are as follows:

 

Employees

 

We rely on a skilled and highly motivated workforce and recruitment & retention of staff is critical to the business. We help engagement with our team by:

 

Appropriate remuneration and reward for outstanding performance through profit sharing arrangements;

Providing industry leading training, coupled with career development opportunities.

 

Customers and suppliers

 

We invest heavily in the latest technology throughout our business so that we can continue to offer quality products at short lead times. Our customers value our high degree of expertise, reliability and value for money offerings. We have built a reputation for fair dealings with both customers and suppliers alike.

On behalf of the board

J S Hartley
Director
6 August 2024
MTL ADVANCED LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activities of the company are the fabrication and forming of metals, laser and water jet cutting, specialist engineering services and painting.

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £3,000,000. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

J S Hartley
W Tierney
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees, through meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

Auditor

The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

During the year, the company within the group consumed 3.1m kWh (2022 - 5.1m kWh) of energy.

 

The volume of CO2 equivalent produced through direct emissions by gas combustion was 180 tonnes (2022 - 359 tonnes) and fuel consumed by own transport was 25 tonnes (2022 - 26 tonnes).

 

The volume of CO2 equivalent produced through indirect emissions by the purchase of electricity was 448 tonnes (2022 - 608 tonnes).

MTL ADVANCED LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

Energy consumption is measured through extensive metering systems in all locations and captured in real time. Emissions in tonnes of CO2 are calculated using industry standard conversion factors applied to the real time consumption data.

 

The company uses an intensity ratio of tonnes of CO2e per employee. During the period this ratio was 2.21 tonnes per employee (2022 - 3.55).

 

Energy efficiency improvement initiatives are important to the company. We have actively invested in the latest production equipment and technologies, which significantly cuts like for like consumption, and are currently looking for opportunities generally in production and non-production environments, including installation of LED lighting in a number of areas.

 

The company is focused on energy and cost reduction throughout, and ultimately on cutting emissions by default. A relatively volatile product mix in operations makes meaningful ratio analysis difficult in the current climate but we will consider opportunities to develop statistics going forward which will meaningfully demonstrate our progress in relation to these goals.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Disclosure

The ultimate shareholder has requested that the directors include the following statement

- the ultimate parent company is privately held, as is the company, and they believe the requirement to publish private accounts is a violation of both the spirit and law under UK right to privacy legislation.

 

MTL ADVANCED LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
On behalf of the board
J S Hartley
Director
6 August 2024
MTL ADVANCED LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MTL ADVANCED LTD
- 6 -
Opinion

We have audited the financial statements of MTL Advanced Ltd (the 'company') for the year ended 31 December 2023 which comprise 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 opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

MTL ADVANCED LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MTL ADVANCED LTD (CONTINUED)
- 7 -
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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting irregularities, including fraud

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

MTL ADVANCED LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MTL ADVANCED LTD (CONTINUED)
- 8 -

Identifying and assessing potential risks related to irregularities

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:

 

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income; posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

MTL ADVANCED LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MTL ADVANCED LTD (CONTINUED)
- 9 -

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.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Ceri Dixon BSc (Hons) FCA
Senior Statutory Auditor
For and on behalf of PM+M Solutions for Business LLP
9 August 2024
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MTL ADVANCED LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
48,127,064
46,031,672
Cost of sales
(37,060,969)
(34,853,775)
Gross profit
11,066,095
11,177,897
Distribution costs
(1,540,215)
(1,773,675)
Administrative expenses
(4,978,971)
(4,779,624)
Other operating income
124,240
35,510
Operating profit
5
4,671,149
4,660,108
Interest paid and similar expenses
7
(61,426)
(49,256)
Profit before taxation
4,609,723
4,610,852
Tax on profit
8
(1,092,774)
(852,965)
Profit for the financial year
3,516,949
3,757,887

There are no recognised gains and losses other than those passing through the Statement of Comprehensive Income.

MTL ADVANCED LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
149,379
69,832
Tangible assets
11
4,197,670
2,379,875
4,347,049
2,449,707
Current assets
Stocks
12
9,254,587
7,262,701
Debtors
13
12,729,699
10,745,870
Cash at bank and in hand
2,025,684
4,574,069
24,009,970
22,582,640
Creditors: amounts falling due within one year
14
(14,584,332)
(12,663,763)
Net current assets
9,425,638
9,918,877
Total assets less current liabilities
13,772,687
12,368,584
Creditors: amounts falling due after more than one year
15
(1,326,080)
(897,207)
Provisions for liabilities
Deferred tax liability
15
(570,920)
(112,639)
Net assets
11,875,687
11,358,738
Capital and reserves
Called up share capital
19
1,000
1,000
Profit and loss reserves
11,874,687
11,357,738
Total equity
11,875,687
11,358,738
The financial statements were approved by the board of directors and authorised for issue on 6 August 2024 and are signed on its behalf by:
J S Hartley
Director
Company Registration No. 07712250
MTL ADVANCED LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
1,000
10,099,851
10,100,851
Year ended 31 December 2022:
Profit and total comprehensive income
-
3,757,887
3,757,887
Dividends
9
-
(2,500,000)
(2,500,000)
Balance at 31 December 2022
1,000
11,357,738
11,358,738
Year ended 31 December 2023:
Profit and total comprehensive income
-
3,516,949
3,516,949
Dividends
9
-
(3,000,000)
(3,000,000)
Balance at 31 December 2023
1,000
11,874,687
11,875,687
MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information

MTL Advanced Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Britannia House, Junction Street, Darwen, Lancashire, BB3 2RB.

 

The company's trading address is Grange Lane, Brinsworth, Rotherham, S60 5AE.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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:

 

 

This information is included in the consolidated financial statements of WEC Group Holdings Limited as at 31

December 2023 and these financial statements may be obtained from Britannia House, Junction Street,

Darwen, Lancashire, BB3 2RB.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
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.

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:

Systems
Once brought into use over 5 years
MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
5 years
Plant and equipment
5 - 7 years
Fixtures and fittings
5 years
Motor vehicles
5 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
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).

1.7
Stocks

Stocks are stated at the lower of either cost or estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
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.

1.9
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.

Basic financial assets

Basic financial assets, which include debtors, cash and bank balances, are measured at transaction price.

Basic financial liabilities

Basic financial liabilities are recognised at transaction price.

 

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.

MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.12
Hire purchase and operating leases

A hire purchase arises whenever the terms of the contract transfer substantially all the risks and rewards of ownership to the company.

 

Assets held under hire purchase are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum hire purchase payments. The related liability is included in the balance sheet as a hire purchase obligation. Payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, are charged to profit or loss on a straight line basis over the term of the relevant lease.

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. The main areas of judgement are in relation to stock including the absorption of overheads, debtor provisions and the useful economic lives of the company's fixed assets.

MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
3
Turnover
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
46,389,530
45,299,840
Rest of Europe
1,667,585
649,420
Rest of World
69,949
82,412
48,127,064
46,031,672

All turnover arose from the principal activity of the company.

4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
15,250
15,058
For other services
Taxation compliance services
1,250
1,250
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
15,250
15,058
Depreciation of owned tangible fixed assets
616,581
496,945
Depreciation of tangible fixed assets held under hire purchase
374,316
375,781
Profit on disposal of tangible fixed assets
(7,750)
(22,500)
Amortisation of intangible assets
25,602
-
0
Operating lease charges
750,000
650,000
6
Employees

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

2023
2022
Number
Number
Directors
2
2
Administrative
52
50
Production
241
228
Total
295
280
MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 17 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
11,195,498
9,860,429
Social security costs
978,510
952,146
Pension costs
260,024
229,084
12,434,032
11,041,659
7
Interest paid and similar expenses
2023
2022
£
£
Interest paid on hire purchase agreements
61,426
49,256
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
607,583
839,873
Adjustments in respect of prior periods
26,910
6,747
Total current tax
634,493
846,620
Deferred tax
Origination and reversal of timing differences
452,278
4,822
Changes in tax rates
20,886
1,523
Adjustment in respect of prior periods
(14,883)
-
0
Total deferred tax
458,281
6,345
Total tax charge
1,092,774
852,965

From the 1 April 2023 the effective tax rate is 25%. During the period the effective tax rate has changed to 23.5%.

MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 18 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
4,609,723
4,610,852
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
1,083,285
876,062
Tax effect of expenses that are not deductible in determining taxable profit
968
1,429
Adjustments in respect of prior years
26,910
6,747
Effect of change in the future tax rate
-
0
1,523
Permanent fixed asset differences
(2,285)
(26,049)
Research and development tax credit
(29,222)
(6,747)
Deferred tax adjustments in respect of prior years
(14,883)
-
0
Remeasure deferred tax for future changes in tax rate
28,001
-
0
Taxation charge for the year
1,092,774
852,965
9
Dividends
2023
2022
£
£
Interim paid
3,000,000
2,500,000
10
Intangible fixed assets
Systems
£
Cost
At 1 January 2023
69,832
Additions
105,149
At 31 December 2023
174,981
Amortisation and impairment
At 1 January 2023
-
0
Amortisation charged for the year
25,602
At 31 December 2023
25,602
Carrying amount
At 31 December 2023
149,379
At 31 December 2022
69,832
MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
11
Tangible fixed assets
Leasehold improvements
Assets under construction
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
115,001
-
0
7,197,514
423,426
28,695
7,764,636
Additions
49,280
1,204,901
1,428,370
63,646
62,495
2,808,692
Disposals
-
0
-
0
(753,523)
-
0
(11,300)
(764,823)
At 31 December 2023
164,281
1,204,901
7,872,361
487,072
79,890
9,808,505
Depreciation and impairment
At 1 January 2023
101,137
-
0
4,998,734
258,146
26,744
5,384,761
Depreciation charged in the year
17,786
-
0
900,567
63,507
9,037
990,897
Eliminated in respect of disposals
-
0
-
0
(753,523)
-
0
(11,300)
(764,823)
At 31 December 2023
118,923
-
0
5,145,778
321,653
24,481
5,610,835
Carrying amount
At 31 December 2023
45,358
1,204,901
2,726,583
165,419
55,409
4,197,670
At 31 December 2022
13,864
-
0
2,198,780
165,280
1,951
2,379,875

The net carrying value of tangible fixed assets includes the following in respect of assets held under hire purchase contracts.

2023
2022
£
£
Plant and equipment
1,675,972
1,207,113
12
Stock
2023
2022
£
£
Raw materials and consumables
4,644,797
3,755,633
Work in progress
4,609,790
3,507,068
9,254,587
7,262,701

An increase in the provision for impairment loss of £10,188 (2022: 113,704) was recognised in cost of sales against stock during the year due to slow moving and obsolete stock.

MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
11,012,228
10,278,807
Corporation tax recoverable
401,366
-
0
Amounts owed by group undertakings
50,367
16,481
Other debtors
4,661
169,355
Prepayments and accrued income
1,261,077
281,227
12,729,699
10,745,870
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under hire purchase
16
423,315
335,594
Trade creditors
8,256,467
6,903,078
Amounts due to group undertakings
335,985
302,922
Corporation tax
-
0
97,596
Other taxation and social security
1,039,021
1,296,300
Other creditors
49,886
147,850
Accruals
4,479,658
3,580,423
14,584,332
12,663,763

The hire purchase creditors are secured on the assets to which they relate.

15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under hire purchase
16
1,326,080
897,207

The hire purchase creditors are secured on the assets to which they relate.

MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
16
Hire Purchase
2023
2022
Future minimum payments due under hire purchase:
£
£
Within one year
496,775
363,260
In two to five years
1,424,535
797,523
In over five years
-
0
149,364
1,921,310
1,310,147
Less: future finance charges
(171,915)
(77,346)
1,749,395
1,232,801
17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Fixed asset timing differences
589,911
124,098
Other timing differences
(18,991)
(11,459)
570,920
112,639
2023
Movements in the year:
£
Liability at 1 January 2023
112,639
Charge to profit or loss
458,281
Liability at 31 December 2023
570,920

The deferred tax liability set out above is expected to reverse within the near future and relates to accelerated capital allowances that are expected to mature within the same period.

MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
260,024
229,084

The company operated a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

 

At balance sheet date, these contributions outstanding totalled £55,396 (2022: £52,139).

19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
20
Guarantees and charges

On 16 June 2023, a fixed and floating charge over all assets of the company was created with Comerica Bank N.A.

21
Operating lease commitments

At the reporting date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
753,000
650,000
Between two and five years
250,000
866,667
1,003,000
1,516,667
22
Related party transactions

As permitted by FRS 102 the financial statements do not disclose transactions with the parent company and fellow subsidiaries where 100% of the voting rights are controlled within the group.

 

The company made purchases from companies that are connected by common control of £510,410 (2022 - £463,160). A total of £93,317 (2022 - £57,532) was due to these companies at the year end.

 

The company made sales to companies that are connected by common control of £2,073 (2022 - £NIL). A total of £1,728 (2022 - £NIL) was due from these companies at the year end.

 

The company purchased services from a company with a common director totalling £779,353 (2022 - £670,699). At the balance sheet date, an amount of £NIL (2022 - £NIL) was owed.

23
Ultimate controlling party
MTL ADVANCED LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Ultimate controlling party
(Continued)
- 23 -

WEC Group Holdings Limited, a company registered in the UK, is the parent company and is the smallest group which the company is consolidated into. The immediate parent company to WEC Group Holdings Ltd is Britannia Metals Holdings Ltd, a company registered in the USA. Britannia Metals Parent Company, also a company registered in the USA, is the controlling party and ultimate parent company and is the largest group which the company is consolidated into.

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