IRIS Accounts Production v24.2.0.383 03954360 Board of Directors 1.1.23 31.12.23 31.12.23 The principal activity of the company in the year under review was as a key provider of a comprehensive range of electromechanical components as well as an assembly and test service for customers requiring TMS (Total Manufacturing Solutions). ++ Key disciplines include sheet metal fabrication and assembly plus electromechanical assembly and test. true false true true false false true false Ordinary A 1.00000 Ordinary B 1.00000 Ordinary C 1.00000 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REGISTERED NUMBER: 03954360 (England and Wales)


















Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31st December 2023

for

Mec Com Limited

Mec Com Limited (Registered number: 03954360)






Contents of the Financial Statements
for the Year Ended 31st December 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 6

Report of the Independent Auditors 8

Statement of Comprehensive Income 12

Statement of Financial Position 13

Statement of Changes in Equity 14

Statement of Cash Flows 15

Notes to the Statement of Cash Flows 16

Notes to the Financial Statements 18


Mec Com Limited

Company Information
for the Year Ended 31st December 2023







DIRECTORS: Mr R J Bunce
Mr N J Lathe
Mr M Bell





SECRETARY: Mr N J Lathe





REGISTERED OFFICE: Units 15A-C
Airfield Industrial Estate
Hixon
Staffordshire
ST18 0PF





REGISTERED NUMBER: 03954360 (England and Wales)





AUDITORS: Rice & Co Limited
Chartered Accountants
Statutory Auditors
14a Market Place
Uttoxeter
Staffordshire
ST14 8HP

Mec Com Limited (Registered number: 03954360)

Strategic Report
for the Year Ended 31st December 2023

The directors present their strategic report for the year ended 31st December 2022.


PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was as a key provider of a comprehensive range of electromechanical components as well as an assembly and test service for customers requiring TMS (Total Manufacturing Solutions).

Key disciplines include sheet metal fabrication, electromechanical assembly and test.


REVIEW OF BUSINESS
The company recorded sales turnover of £16,358,039, an increase of 13% from the previous year. P.B.I.T. (Profit before Interest and Taxation) increased from 3% in 2022 to 5.1% for 2023.

Sales order intake figures remained strong with orders received in the year totalling £21.3M an increase of over 41% from £15.4M in 2022.

Review of 2023 Results:

Turnover in the year was £16,358,039, an increase of 13% from the £14,466,342 achieved in the previous year.

Raw Materials and Consumables costs increased by £1,347,996 from 2022 to £10,537,189 and represented 64.4% of Sales, an increase from the previous year of 0.9%.

Staff Costs (Payroll) increased by £373,925 to £3,596,778 and represented 22% of Sales, a decrease of 0.3% from 2022.

The average number of employees increased to 111 employees during the year, an increase of 7 from 2022.

Profit before Taxation on continuing trade activities increased by £364,773 to £731,895 from the previous year (2022 - £367,122).


KEY PERFORMANCE INDICATORS
The board of directors recognise Key Performance Indicators as an integral part of monitoring the progress of the business.

Performance indicators are identified in the Annual Business Plan and appropriate targets set.

It is the responsibility of the management team to regularly monitor and review these figures and report the results and any corrective actions to the board.

The key performance indicators used to monitor the financial performance of the company include, profit before interest and taxation (P.B.I.T.) as a % of sales which closed the year on 5.1% up from 3% in the previous year.

Sales per employee increased from £139,000 to £147,000, whilst Net Profit before taxation per employee increased from £3,5000 to stand at £6,600 during 2023.



Mec Com Limited (Registered number: 03954360)

Strategic Report
for the Year Ended 31st December 2023

Other Balance Sheet indicators showed the following movements:

Inventory days decreased by 32 days from 141 days at the end of 2022 to close on 109 days, Trade receivables/debtor days decreased by 1 day to close on 41 days during the year with Trade payables/average creditor days decreasing by 6 days to close on 40 days average by the end of the year.


RESEARCH AND DEVELOPMENT ACTIVITIES
Ongoing capital investment and the implementation of lean manufacturing techniques have created a truly flexible and cost-effective manufacturing environment. Included within this the company undertakes regular activities to innovate and introduce new manufacturing processes, techniques and solution requirements, including building prototypes and testing in-house.


PRINCIPAL RISKS AND UNCERTAINTIES

Commercial Relationships
The Company benefits from close commercial relationships with a number of key customers and suppliers. The loss of any of these key customers or suppliers, or a significant worsening in commercial terms could have a material impact on results.

The Company devotes significant resources to supporting these relationships to ensure they continue to operate satisfactorily. Wherever practical, the Company endeavours to maintain more than one source of a particular supply.

Competitors
The Company faces fierce competition from low cost countries namely China, India and from those located in Eastern Europe.

The Company continually works to streamline its cost base to ensure it remains competitive. Part of this ongoing initiative is the expansion of a global supply chain involving the procurement of high volume parts from China as well as medium to high volume products from facilities in Romania.

Maintaining High Quality
As the Company primarily supplies products into the protection and control systems of major electrical distribution networks, maintaining high quality standards are essential. Failure to comply with the necessary standards could significantly damage the Company's reputation and performance.

The Company has established policies and operating procedures which are periodically subject to both internal and external audit. The Company is accredited under ISO 9001 and ISO 14001 Environmental standard.

Health and Safety
A significant number of the Company's employees work in a manufacturing environment near machinery. In addition to the possible injury to individuals, serious accidents could result in prosecution and fines and damage the reputation and performance of the Company.

The Company works to identify and minimise all Health and Safety risks in order to provide a safe and healthy workplace for employees and visitors. Risk assessments and workplace training is undertaken in all areas of the business.



Mec Com Limited (Registered number: 03954360)

Strategic Report
for the Year Ended 31st December 2023

Energy and Raw Materials
The Company's products contain a number of raw materials and its operations require significant levels of energy; notably gas and electricity. Any increases or volatility in prices or any prolonged interruption in supply could have a material impact on the Company's results.

The Company regularly undertakes purchasing reviews and uses forward buying or other contractual means where appropriate to manage the risks.

Other Risks
Other external risks include global, political and economic conditions, foreign exchange, interest rates, credit risk and business continuity.

The company seeks to mitigate exposure to all forms of risk, where practicable, and to transfer risk to insurers, where cost effective.


FINANCIAL INSTRUMENTS
The directors are constantly reviewing the objectives of the business operations to identify areas where it is able to reduce financial risk without hindrance to on site operations.

Credit
To counteract the risk of bad debts the business has increased the use of credit checking facilities to assess the risk to the company of contracting with each customer.

The Company also insures its debtor book against any potential bad debts.

Liquidity
The business has a very strong relationship with its banking team. The company has the facilities to meet its needs on an ongoing basis, namely using an invoice discounting facility to factor its debtor book.

Hedging Forecast Transactions
A proportion of the Company's sales are denominated in currencies other than Sterling (Euros) which are only partially matched by expenses denominated in those currencies. A significant weakening of these currencies against sterling could materially impact the Company's performance.

The Company sets internal exchange rates for determining pricing and enters into forward contracts based on forecast transactions to achieve or better these rates.

Cash flow
Cash flow forecasts are prepared weekly and any facilities reviewed to cover any foreseeable funding requirements with an allowance for unforeseen events.


Mec Com Limited (Registered number: 03954360)

Strategic Report
for the Year Ended 31st December 2023

FUTURE DEVELOPMENTS
The company is expecting to see a significant increase in demand for new products over the next 12 months, particularly from customers in its traditional core market of Power and Distribution.

As the business commences its 25th year of trading plans are in place to make significant investments in both Plant and Machinery and number of key Business Digitalisation and Sustainability projects during the next 12 to 18 months.

ON BEHALF OF THE BOARD:





Mr N J Lathe - Director


18th September 2024

Mec Com Limited (Registered number: 03954360)

Report of the Directors
for the Year Ended 31st December 2023

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

DIVIDENDS
The total distribution of dividends for the year ended 31st December 2023 will be £ 247,190 .

DIRECTORS
The directors shown below have held office during the whole of the period from 1st January 2023 to the date of this report.

Mr R J Bunce
Mr N J Lathe

Other changes in directors holding office are as follows:

Mr M Bell was appointed as a director after 31st December 2023 but prior to the date of this report.

DISCLOSURE IN THE STRATEGIC REPORT
Information regarding financial instruments and future developments is contained within the strategic report included in these financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-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.

Mec Com Limited (Registered number: 03954360)

Report of the Directors
for the Year Ended 31st December 2023


AUDITORS
The auditors, Rice & Co Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





Mr N J Lathe - Director


18th September 2024

Report of the Independent Auditors to the Members of
Mec Com Limited

Opinion
We have audited the financial statements of Mec Com Limited (the 'company') for the year ended 31st December 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 31st December 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 Report of the Directors, 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.

Report of the Independent Auditors to the Members of
Mec Com Limited


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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

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 six, 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
Mec Com 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:

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.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we performed procedures which included:
- Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud.
- Reviewing minutes of meetings of those charged with governance.
- Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Performing audit work over the risk of management bias and override of controls including testing of journal entries and other adjustments for appropriateness and reviewing accounting estimates for indicators of potential bias.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to material misstatement in the financial statements or non-compliance with laws and regulations. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error, as fraud may include collusion, forgery, intentional omissions, misrepresentations, or override of the internal control.

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
Mec Com 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.




Matthew Gibbs FCA (Senior Statutory Auditor)
for and on behalf of Rice & Co Limited
Chartered Accountants
Statutory Auditors
14a Market Place
Uttoxeter
Staffordshire
ST14 8HP

18th September 2024

Mec Com Limited (Registered number: 03954360)

Statement of Comprehensive
Income
for the Year Ended 31st December 2023

2023 2022
Notes £    £    £    £   

TURNOVER 4 16,358,039 14,466,342

Cost of sales 13,488,374 11,668,259
GROSS PROFIT 2,869,665 2,798,083

Distribution costs 194,523 172,628
Administrative expenses 2,030,398 2,206,555
2,224,921 2,379,183
644,744 418,900

Other operating income 193,911 20,000
OPERATING PROFIT 6 838,655 438,900


Interest payable and similar expenses 7 106,760 71,778
PROFIT BEFORE TAXATION 731,895 367,122

Tax on profit 8 146,124 (4,287 )
PROFIT FOR THE FINANCIAL
YEAR

585,771

371,409

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR

585,771

371,409

Mec Com Limited (Registered number: 03954360)

Statement of Financial Position
31st December 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 10 235,699 338,523

CURRENT ASSETS
Stocks 11 3,135,754 3,545,900
Debtors 12 2,074,963 2,214,257
Cash at bank and in hand 787,321 335,700
5,998,038 6,095,857
CREDITORS
Amounts falling due within one year 13 2,957,232 3,510,201
NET CURRENT ASSETS 3,040,806 2,585,656
TOTAL ASSETS LESS CURRENT
LIABILITIES

3,276,505

2,924,179

CREDITORS
Amounts falling due after more than one
year

14

(14,296

)

-

PROVISIONS FOR LIABILITIES 18 (19,202 ) (19,753 )
NET ASSETS 3,243,007 2,904,426

CAPITAL AND RESERVES
Called up share capital 19 2,120 2,120
Capital redemption reserve 20 880 880
Retained earnings 20 3,240,007 2,901,426
SHAREHOLDERS' FUNDS 3,243,007 2,904,426

The financial statements were approved by the Board of Directors and authorised for issue on 18th September 2024 and were signed on its behalf by:





Mr N J Lathe - Director


Mec Com Limited (Registered number: 03954360)

Statement of Changes in Equity
for the Year Ended 31st December 2023

Called up Capital
share Retained redemption Total
capital earnings reserve equity
£    £    £    £   
Balance at 1st January 2022 2,120 2,729,240 880 2,732,240

Changes in equity
Dividends - (199,223 ) - (199,223 )
Total comprehensive income - 371,409 - 371,409
Balance at 31st December 2022 2,120 2,901,426 880 2,904,426

Changes in equity
Dividends - (247,190 ) - (247,190 )
Total comprehensive income - 585,771 - 585,771
Balance at 31st December 2023 2,120 3,240,007 880 3,243,007

Mec Com Limited (Registered number: 03954360)

Statement of Cash Flows
for the Year Ended 31st December 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 128,607 (6,570 )
Interest paid (105,116 ) (67,993 )
Interest element of hire purchase
payments paid

(1,644

)

(3,785

)
Tax paid (26,540 ) (31,965 )
Dividends paid (247,190 ) (199,223 )
Net cash from operating activities (251,883 ) (309,536 )

Cash flows from investing activities
Purchase of tangible fixed assets (89,239 ) (17,816 )
Sale of tangible fixed assets 64,113 7,750
Net cash from investing activities (25,126 ) (10,066 )

Cash flows from financing activities
Hire purchase repayments (67,568 ) (78,065 )
Movement in directors' current accounts (11,324 ) 11,325
Movement in associated company balances 600,435 357,303
Net cash from financing activities 521,543 290,563

Increase/(decrease) in cash and cash equivalents 244,534 (29,039 )
Cash and cash equivalents at
beginning of year

2

180,715

209,754

Cash and cash equivalents at end of
year

2

425,249

180,715

Mec Com Limited (Registered number: 03954360)

Notes to the Statement of Cash Flows
for the Year Ended 31st December 2023

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
2023 2022
£    £   
Profit before taxation 731,895 367,122
Depreciation charges 178,811 268,397
Profit on disposal of fixed assets (13,283 ) (7,427 )
Finance costs 106,760 71,778
1,004,183 699,870
Decrease/(increase) in stocks 410,146 (552,943 )
(Increase)/decrease in trade and other debtors (319,421 ) 220,066
Decrease in trade and other creditors (966,301 ) (373,563 )
Cash generated from operations 128,607 (6,570 )

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31st December 2023
31.12.23 1.1.23
£    £   
Cash and cash equivalents 787,321 335,700
Bank overdrafts (362,072 ) (154,985 )
425,249 180,715
Year ended 31st December 2022
31.12.22 1.1.22
£    £   
Cash and cash equivalents 335,700 209,754
Bank overdrafts (154,985 ) -
180,715 209,754


Mec Com Limited (Registered number: 03954360)

Notes to the Statement of Cash Flows
for the Year Ended 31st December 2023

3. ANALYSIS OF CHANGES IN NET DEBT

At 1.1.23 Cash flow At 31.12.23
£    £    £   
Net cash
Cash at bank and in hand 335,700 451,621 787,321
Bank overdrafts (154,985 ) (207,087 ) (362,072 )
180,715 244,534 425,249
Debt
Finance leases (56,540 ) 29,990 (26,550 )
Debts falling due within 1 year (1,360,457 ) 560,556 (799,901 )
(1,416,997 ) 590,546 (826,451 )
Total (1,236,282 ) 835,080 (401,202 )

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements
for the Year Ended 31st December 2023

1. STATUTORY INFORMATION

Mec Com 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. STATEMENT OF COMPLIANCE

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.

3. ACCOUNTING POLICIES

Basis of preparing the financial statements
The financial statements have been prepared under the historical cost convention.

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover is recognised when the significant risks and rewards of ownership of the goods has transferred to the buyer. This is usually at the point the customer has signed for the delivery of the goods.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.
Improvements to property - 20% on cost and 10% on cost
Plant and machinery - 20% on cost
Fixtures and fittings - 20% on cost and 10% on cost
Motor vehicles - 25% on cost
Computer equipment - 33% on cost

Tangible fixed assets are reviewed annually to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

Stocks
Stocks are valued at the lower of cost, using the first in first out method, and selling price less costs to complete and sell. Provision is made for obsolete and slow moving items.

Research and development
Expenditure on research and development is written off in the year in which it is incurred.


Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

3. ACCOUNTING POLICIES - continued

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the reporting date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments
Assets obtained under hire purchase contracts or finance leases are capitalised in the statement of financial position. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Debtors
Short term debtors are measured at transaction price, less any impairment.

Creditors
Short term trade and other creditors are measured at transaction price. Other financial liabilities, including bank loans, are initially measured at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Derivative financial instruments
Derivative financial instruments are recognised at fair value with any gains or losses being reported in profit or loss.

Government grants
Grants received as a contribution towards capital expenditure are credited to income over the useful economic life of the related asset.

Grants relating to revenue are recognised in income on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate.

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

3. ACCOUNTING POLICIES - continued

Taxation
Current tax is recognised for the amount payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that have been enacted or substantively enacted by the reporting date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the reporting date where transactions or events have occurred at that date that will result in an obligation to pay more tax in the future, or a right to pay less tax in the future. Timing differences are temporary differences between the company's taxable profits and its results as stated in the financial statements.

Deferred tax is measured on an undiscounted basis at the tax rates that are anticipated to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the reporting date.

4. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2023 2022
£    £   
United Kingdom 8,050,620 7,235,649
Europe 6,952,676 6,494,756
Rest of the World 1,354,743 735,937
16,358,039 14,466,342

5. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 3,246,933 2,889,690
Social security costs 275,285 246,494
Other pension costs 74,560 86,669
3,596,778 3,222,853

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

Directors 2 2
Administration 46 46
Production 63 56
111 104

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

5. EMPLOYEES AND DIRECTORS - continued

2023 2022
£    £   
Directors' remuneration 25,492 29,369

6. OPERATING PROFIT

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

2023 2022
£    £   
Plant hire 36,412 33,400
Depreciation - owned assets 134,753 216,187
Depreciation - assets on hire purchase contracts 44,057 52,210
Profit on disposal of fixed assets (13,283 ) (7,427 )
Auditors' remuneration 18,725 17,675
Foreign exchange differences (193,911 ) 104,671
Operating lease payments 274,855 259,291
Research and development expenditure 153,846 242,915

7. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank interest 105,116 67,993
Hire purchase interest 1,644 3,785
106,760 71,778

8. TAXATION

Analysis of the tax charge/(credit)
The tax charge/(credit) on the profit for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 124,292 41,313
Adjustments in respect of
prior years 22,383 (17,581 )
Total current tax 146,675 23,732

Deferred tax: Origination and reversal of
timing differences

(551

)

(28,019

)
Tax on profit 146,124 (4,287 )

UK corporation tax has been charged at 25% (2022 - 19%).

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

8. TAXATION - continued

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

2023 2022
£    £   
Profit before tax 731,895 367,122
Profit multiplied by the standard rate of corporation tax in the UK
of 25% (2022 - 19%)

182,974

69,753

Effects of:
Expenses not deductible for tax purposes 1,730 (1,200 )
Research and development tax relief (27,617 ) (77,581 )
Increase in tax rate (10,963 ) 4,741
Total tax charge/(credit) 146,124 (4,287 )

9. DIVIDENDS
2023 2022
£    £   
Ordinary A shares of £1 each
Dividends paid 148,471 121,593
Ordinary B shares of £1 each
Dividends paid 98,719 77,630
247,190 199,223

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

10. TANGIBLE FIXED ASSETS
Improvements Fixtures
to Plant and and
property machinery fittings
£    £    £   
COST
At 1st January 2023 402,911 3,816,078 186,831
Additions 41,417 38,171 -
Disposals - (395,480 ) -
At 31st December 2023 444,328 3,458,769 186,831
DEPRECIATION
At 1st January 2023 336,704 3,565,355 177,829
Charge for year 23,159 136,457 4,025
Eliminated on disposal - (341,419 ) -
At 31st December 2023 359,863 3,360,393 181,854
NET BOOK VALUE
At 31st December 2023 84,465 98,376 4,977
At 31st December 2022 66,207 250,723 9,002

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 1st January 2023 - 493,426 4,899,246
Additions 40,808 9,651 130,047
Disposals - - (395,480 )
At 31st December 2023 40,808 503,077 4,633,813
DEPRECIATION
At 1st January 2023 - 480,835 4,560,723
Charge for year 9,352 5,817 178,810
Eliminated on disposal - - (341,419 )
At 31st December 2023 9,352 486,652 4,398,114
NET BOOK VALUE
At 31st December 2023 31,456 16,425 235,699
At 31st December 2022 - 12,591 338,523

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

10. TANGIBLE FIXED ASSETS - continued

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Plant and Motor
machinery vehicles Totals
£    £    £   
COST
At 1st January 2023 189,300 - 189,300
Additions - 40,808 40,808
Transfer to ownership (189,300 ) - (189,300 )
At 31st December 2023 - 40,808 40,808
DEPRECIATION
At 1st January 2023 100,144 - 100,144
Charge for year 34,705 9,352 44,057
Transfer to ownership (134,849 ) - (134,849 )
At 31st December 2023 - 9,352 9,352
NET BOOK VALUE
At 31st December 2023 - 31,456 31,456
At 31st December 2022 89,156 - 89,156

11. STOCKS
2023 2022
£    £   
Raw materials 682,607 2,142,843
Work-in-progress 2,453,147 1,403,057
3,135,754 3,545,900

Stock recognised as an expense in cost of sales during the year was £10,537,189 (2022 - £9,189,193).

12. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade debtors 1,836,059 1,657,250
Other debtors 102,110 467,865
VAT 8,373 -
Prepayments and accrued income 128,421 89,142
2,074,963 2,214,257

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Bank loans and overdrafts (see note 15) 1,161,973 1,515,442
Hire purchase contracts (see note 16) 12,254 56,540
Trade creditors 1,129,598 962,477
Tax 187,988 67,853
Social security and other taxes 87,971 66,781
VAT - 65,342
Other creditors 174,334 15,343
Debt factoring 122,734 655,353
Directors' current accounts 1,231 12,555
Accrued expenses 79,149 92,515
2,957,232 3,510,201

14. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN
ONE YEAR
2023 2022
£    £   
Hire purchase contracts (see note 16) 14,296 -

15. LOANS

An analysis of the maturity of loans is given below:

2023 2022
£    £   
Amounts falling due within one year or on demand:
Bank overdrafts 362,072 154,985
Bank loans 799,901 1,360,457
1,161,973 1,515,442

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

16. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Hire purchase contracts
2023 2022
£    £   
Gross obligations repayable:
Within one year 13,449 57,398
Between one and five years 15,691 -
29,140 57,398

Finance charges repayable:
Within one year 1,195 858
Between one and five years 1,395 -
2,590 858

Net obligations repayable:
Within one year 12,254 56,540
Between one and five years 14,296 -
26,550 56,540

Non-cancellable operating leases
2023 2022
£    £   
Within one year 180,539 257,504
Between one and five years 12,074 190,295
192,613 447,799

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

17. SECURED DEBTS

The following secured debts are included within creditors:

2023 2022
£    £   
Bank overdrafts 362,072 154,985
Bank loans 799,901 1,360,457
Hire purchase contracts 26,550 56,540
Debt factoring 122,734 655,353
1,311,257 2,227,335

Bank overdrafts, bank loans and debt factoring are secured by a charge over all assets. Hire purchase liabilities are secured by the assets to which they relate.

18. PROVISIONS FOR LIABILITIES
2023 2022
£    £   
Deferred tax
Accelerated capital allowances 19,202 19,753

Deferred
tax
£   
Balance at 1st January 2023 19,753
Credit to Statement of Comprehensive Income during year (551 )
Balance at 31st December 2023 19,202

The amount of the net reversal of deferred tax expected to occur in the forthcoming year is £13,097 (2022 - £19,753), relating to the reversal of existing timing differences on tangible fixed assets.

19. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
1,000 Ordinary A £1 1,000 1,000
1,000 Ordinary B £1 1,000 1,000
120 Ordinary C £1 120 120
2,120 2,120

All shares rank pari passu in all respects.

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

20. RESERVES
Capital
Retained redemption
earnings reserve Totals
£    £    £   

At 1st January 2023 2,901,426 880 2,902,306
Profit for the year 585,771 - 585,771
Dividends (247,190 ) - (247,190 )
At 31st December 2023 3,240,007 880 3,240,887

Retained earnings consists of all current and prior period retained profits and losses.

Capital redemption reserve is the nominal value of share capital that has been repurchased by the company.

21. RELATED PARTY DISCLOSURES

European Fabrications S.R.L.
A company controlled by the directors of Mec Com Limited and with which Mec Com Limited trades on a regular basis.

During the year ended 31st December 2023 purchases of £5,225,723 (2022 - £3,733,758) were made from European Fabrications S.R.L.

Included in debtors at 31st December 2023 is £nil (2022 - £427,913) owed by European Fabrications S.R.L. and included in creditors due within one year at 31st December 2023 is £141,720 owed to European Fabrications S.R.L.

22. SIGNIFICANT JUDGEMENTS AND ESTIMATES

Management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The key source of estimation uncertainty that has a significant effect on the amounts recognised in the financial statements is the provision for slow-moving and obsolescent stock.

Mec Com Limited (Registered number: 03954360)

Notes to the Financial Statements - continued
for the Year Ended 31st December 2023

23. FINANCIAL RISK MANAGEMENT

The company has exposures to the main areas of risk of customer credit exposure, liquidity, market and foreign exchange currency exposure. To a lesser extent, the company is exposed to interest rate risk.

Customer credit exposure
The company offers credit terms to its customers which allow payment of the debt after delivery of the goods. The company is at risk to the extent that a customer may be unable to pay the debt on the specified due date.

To mitigate the risk, the company makes use of independent rating agencies and other publicly available financial information. The company's exposure and its customers creditworthiness is continually monitored so that any potential problems are detected at an early stage.

Liquidity risk
The objective of the company in managing liquidity risk is to ensure that it can meet its financial obligations as and when they fall due. The company expects to meet its financial obligations through operating cash flows. The directors continually monitor both forecast and actual cash flows to identify potential problems at an early stage.

Market risk
The company faces fierce competition from low cost countries namely China, India and from those located in Eastern Europe.

The company continually works to streamline its cost base to ensure it remains competitive. Part of this ongoing initiative is the expansion of a global supply chain involving the procurement of high volume parts from China as well as medium to high volume products from facilities in Romania.

Foreign exchange currency exposure
A proportion of the company's sales are denominated in currencies other than Sterling which are only partially offset by expenses denominated in those currencies. A significant weakening of these currencies against sterling could materially impact the company's performance.

The company sets internal exchange rates for determining pricing and enters into forward contracts based on forecast transactions to achieve or better these rates.

Interest rate risk
The company borrows from its bankers using overdrafts and debt factoring facilities. Significant changes in interest rates would impact on the company's results.