Company registration number:
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present the strategic report for the year ended 31 March 2023.
The Statement of Income and Retained Earnings set out on page 10 shows that the company’s turnover for the year is £31,946,410 (2022: £28,278,430) and that the company made a profit after tax for the year of £7,476,760 (2022: £2,140,601).
Turnover for the year in review has increased by 13% for Meaco UK despite sales for our exports now largely being stripped out and reported separately in our German sister company. Profitability has also increased as sea freight costs have steadily improved and fallen towards pre-COVID levels and the proportion of higher margin direct sales has risen. As an air treatment company weather can have a large effect on sales and in summer 2022 the effect was positive with consistent spells of warm weather throughout spring and early summer leading to record temperatures in July that saw large areas of the country swelter in 38°C heat. During this summer heatwave we were trying to plan for the Autumn/Winter dehumidifier sales and were facing great uncertainty. At that point there was no planned government support for energy costs which had risen sharply since the start of the Ukraine war. As dehumidifiers are mains powered and use a reasonable amount of electricity our thoughts and those of our customers was that sales would be hit as consumers shunned anything electrical. On this basis we forecasted for the season to be flat and planned our production on that basis. In September 2022 the UK government introduced a price cap for energy prices that pitched them at a level twice as high as the previous year. The temporary change in leadership within the government also caused chaos with the money markets, hitting the sterling and interest rates. In theory none of these events should have had a positive effect on our sales, but the reaction from the public saw sales increase dramatically. Consumers started to look for energy efficient devices that could save them money in the long term on their bills. The dehumidifier replaced the tumble dryer and as people turned their heating down, the dehumidifier became a way to manage any resulting damp issues. Before the weather had turned cold enough to put condensation onto people’s windows (a normal driver of sales), we had sold our entire winter’s stock and were playing catch up. We ordered as much stock as we could get produced quickly and as soon as it arrived, it sold out within minutes. This resulted in sales of over 160,000 units, it could have been 200,000 if we have had the stock. The company ended the year with net assets of £18,511,157 (2022: £11,232,397). The year end cash at bank position was £8,992,328 (2022: £5,466,170).
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
The directors consider the principal risks and uncertainties faced by the company to be:
∙Environmental uncertainties - As an air treatment company, our sales are partly driven by the underlying weather conditions of the time. There is no doubt for example that a hot summer will result in more fans being sold at a better margin. Dehumidifier sales tend to be more reliable, and we are not dependent on extreme weather to generate sales as we are not heavily weighted towards the commercial end of the market.
∙Financial risk - We purchase largely in US Dollars and are therefore exposed to fluctuations in the exchange rate. We continue to monitor closely the international FX situation and work closely with our foreign exchange suppliers to mitigate the risks.
∙Logistics - This has been a challenge for all importers across the world since the start of COVID and has slowly started to settle back down as the balance between supply and demand has improved. Sea freight rates continued to soften and move in the right direction, while domestically the availability of truck drivers was still a frustration, there were signs of improvement. Unfortunately the shorter, and more reliable China/Tilbury service came to an end at the end of 2022 and we were left with the established Felixstowe sailing instead. We continue to prefer to pay slightly higher rates for in return for the guarantee of space on a vessel, rather that the lottery of unsecured cheaper rates.
∙Suppliers - We maintain strong relationships with our suppliers, the majority of the year in review was challenging for the as China tried to follow it’s strict COVID policies. The opening up of China at the start of 2023 resulted in a short term spike in COVID issues, but these dissipated surprisingly quickly and it soon reverted to business as normal.
∙War in Ukraine - The war in Ukraine has been a issue that has driven energy costs high, surprisingly this has resulted in increased sales for the company as consumers have turned towards energy efficient solutions. We will keep an close eye on the resulting inflation and interest rate rises that make economical conditions a challenge for our staff and customers alike.
Some of the above issues are outside of our control and are part of the wider issues affecting international commerce at the moment. So, we are concentrating on controlling what we can control.
For stock levels we are constantly looking to improve our data analysis and forecasting models and to concentrate on features and benefits that will result in stock still selling strongly even when the weather conditions might not be favourable.
We will continue to grow our sales in USD to provide ourselves with a buffer against negative fluctuations in currency.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Our focus going forward will be to increase our investment in marketing and PR to help maintain the sell through of our stocks. As the world starts to open up we will return to face to face meetings with our customers and a return to traditional trade fairs.
The development of our own range of fans continues and now that the dehumidifier development has finished this will become a focus for the team. We are also starting a new humidifier and desiccant dehumidifier project to be ready for 2024, between them, these projects will generate several new variations in product lines 'SKUs' to be launched worldwide over the next 4 to 5 years.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present their report and the financial statements for the year ended 31 March 2023.
The directors who served during the year were:
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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), 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 for the Company's financial statements and then apply them consistently;
∙make judgments 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 to 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.
The profit for the year, after taxation, amounted to £7,476,760 (2022 - £2,140,601).
During the year the company undertook research and development activity in relation to obtaining further scientific advances in particular in relation to performance, energy efficiency and noise levels.
The Company has chosen, in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, to set out within the Company's Strategic Report, the Company's Strategic ReportInformation as required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports)Regulation 2008. This includes information that would have been included in the business review and details of principalrisks and uncertainties.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
There have been no significant events affecting the Company since the year end.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MEACO (U.K.) LIMITED
We have audited the financial statements of Meaco (U.K.) Limited (the 'Company') for the year ended 31 March 2023, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position and the related notes, 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).
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 United Kingdom, including the Financial Reporting Council'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.
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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MEACO (U.K.) LIMITED (CONTINUED)
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.
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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MEACO (U.K.) LIMITED (CONTINUED)
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 Auditors' 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.
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:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including:
∙The Companies Act 2006;
∙Financial Reporting Standard 102;
∙UK employment legislation
∙UK health and safety legislation; and
∙General Data Protection Regulations
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
We understood how the Company are complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures.
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
∙Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud;
∙Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
∙Challenging assumptions and judgments made by management in its significant accounting estimates; and
∙Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above 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:
∙Posting of journals to the accounting software which are of a non-routine nature in terms of timing and amount; and
∙Timing of revenue recognition.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. 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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MEACO (U.K.) LIMITED (CONTINUED)
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 Auditors' Report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
1st Floor
Midas House
62 Goldsworth Road
Surrey
GU21 6LQ
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2023
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STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 22 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Meaco (U.K.) Limited is a private Company limited by shares, incorporated in the United Kingdom under the Companies Act 2006, and is registered in England and Wales. The address of the Company's registered office and principal place of business is disclosed on the company information page.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 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:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).
This information is included in the consolidated financial statements of Meaco Holdings Limited as at 31 March 2023 and these financial statements may be obtained from Companies House.
the revenue can be reliably measured. Sales of freight on board stock are recognised when released from the warehouse. For sales where the company is responsible for delivering inventory to the final customer, the sale is recognised when the goods are delivered. These are the points at which it is deemed that the risks and rewards have passed to the customer. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
Intangible assets are amortised over a period of 25% reducing balance.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
The directors consider there to be only one class of business.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
There were no factors that may affect future tax charges.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Profit and loss account
The company operates a defined contribution scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions by the company to the fund and amounted to £88,144 (2022: £87,505).
As at the year end there was £1,449 (2022: £1,424) payable to the pension scheme.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Meaco (U.K.) Limited's immediate parent company and ultimate parent company is Meaco Holdings Limited. The parent company of the largest and smallest group in which the company's results are consolidated is Meaco Holdings Limited. The consolidated accounts are available from Companies House.
CG Michael and M C Michael are both considered the ultimate controlling party as they are closely related persons.
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