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Registered number: 02710631









MERIDIAN AUDIO LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2023

 
MERIDIAN AUDIO LIMITED
 
 
COMPANY INFORMATION


DIRECTORS
D J Buchanan 
S W Park 
N Robson 




COMPANY SECRETARY
N Robson



REGISTERED NUMBER
02710631



REGISTERED OFFICE
Latham Road
Huntingdon

Cambridgeshire

PE29 6YE




INDEPENDENT AUDITORS
Peters Elworthy & Moore
Chartered Accountants & Statutory Auditors

Salisbury House

Station Road

Cambridge

CB1 2LA




BANKERS
Barclays Bank PLC
1 Church Street

Peterborough

Cambridgeshire

PE1 1XE




SOLICITORS
Mishcon de Reya LLP
Four Station Square

Cambridge

CB1 2GE





 
MERIDIAN AUDIO LIMITED
 

CONTENTS



Page
Strategic Report
 
1
Directors' Report
 
4 - 5
Independent Auditors' Report
 
6 - 9
Profit and Loss Account
 
10
Statement of Comprehensive Income
 
11
Balance Sheet
 
12
Statement of Changes in Equity
 
13
Statement of Cash Flows
 
14 - 15
Notes to the Financial Statements
 
16 - 34


 
MERIDIAN AUDIO LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023

The directors present their strategic report for the period ended 31 May 2023.

PRINCIPAL ACTIVITY
 
Meridian Audio is principally engaged in the development of proprietary DSP audio technologies, audio engineering consultancy and commercial licensing activities, and the design, manufacture and distribution of high performance loudspeakers and specialist audio-video systems for luxury residential and bespoke marine projects.

BUSINESS REVIEW
 
The Company had a further successful year delivering sales and gross profit growth, adding to its net worth. Additionally, the Company continues to develop its medium term (2 – 5 year) pipeline of commercial licensing opportunities which if successful will provide further profitable growth in the coming years and further increase the Gross Profit margin percentage.
The underlying demand for the Company’s services and products continued to strengthen during the year resulting in a growth in turnover of 9% to £9.4m (2022 - £8.6m). Gross profit was maintained at 62% and the Company delivered a positive net comprehensive income of £0.5m (2022 - £1.2m).
The Company strengthened its portfolio of automotive contracts, signing multiple long term commercial licensing agreements in the year as well as adding to its pipeline of active discussions with potential new licensing customers across a variety of industry sectors. The Company’s audio consultancy and commercial licensing activities are managed via the EbM (“Engineered by Meridian”) team and whilst this pipeline is not a guarantee of securing future contracts it reflects increasing interest in the Company’s services and technologies and is an indicator of future revenue potential.
Revenue generated from sales of specialist audio-video systems increased in the year by 15% driven by a generally strong market for its products and the introduction of new products to its portfolio. The Company maintains its view that there continues to be growing demand for luxury residential and bespoke marine projects incorporating high performance home theatres and large-screen media rooms, which will lead to revenue growth. The Company’s range of new technologies and products, and its development pipeline, have been specifically designed to take advantage of this growing market space whilst also continuing to provide the highest quality products for 2-channel music listening applications.
The Company continued to add to its portfolio of complimentary third-party products it distributes in the UK and Eire via the DbM (“Distributed by Meridian”) team, thus further strengthening its commercial position and increasing its access to a greater number of installation projects whilst also enabling the supply of a broader range of high value brands and solutions to each project. DbM will continue to look to add more third-party brands to its distribution portfolio in the UK and Eire.
The Company continues to see investment in applied research and development activities as a key strategic driver for future growth and invested £1.3m during the year (2022 - £1.4m) representing 14% of turnover (2022 - 16%). Additionally, the Company regularly funds university research programmes which are designed to create specific solutions for new high performance audio experiences.
Whilst much of the development costs will support future revenue generation, costs are charged to the profit and loss account in the year they are incurred unless they meet the strict criteria set out in the accounting policies. During the year £0.5m (2022 - £0.2m) was capitalised in relation to expenditure on the development of audio platforms that will form the basis for future products.
 
Page 1

 
MERIDIAN AUDIO LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023

BUSINESS REVIEW (CONTINUED)
Continuous investment in marketing is of importance to support existing customers and products as well as to drive greater awareness that will support the Company to win more commercial contracts and increase sales in the future. In the year the Company invested over 7% of turnover in such activities (2022 - 5%).
Other income during the year consisted of property rental income and business service fees of £0.181m (2022 - £0.181m). There were no government grants receivable under Coronavirus support schemes during the year (2022 - £0.019m).
At the year-end, the level of confirmed orders for specialist audio products combined with signed contracts for brand and IP licensing which will all commercialise in the next 12 months puts the Company in a strong position entering its next financial year.

PRINCIPAL RISKS AND UNCERTAINTIES
 
Principal risks and uncertainties of the business include the following:
Economy
Much of the underlying demand for the Company’s product is influenced by the underlying health of the economies in which it sells its products and licenses its technologies. The risk is minimised by serving a variety of customer segments across multiple geographic areas.
Issues in global supply chains, particularly in relation to semi-conductors, may impact the level of licensing income generated by certain contracts. Additionally, the same issues may impact the ability to manufacture and supply the Company’s products in a timely manner, though this risk is minimised by investment in stocks. Such risks have been built into the Company’s forward business plans.
Relationships with key customers
Damage to or loss of any of these relationships could have a detrimental impact on the financial results of the business. This risk is minimised in the area of licensing by securing long-term contracts with a number of different customers. In the area of specialist audio products, the risk is minimised by selling globally to a broad portfolio of customers and territories. In all areas business risk is mitigated by continued investment in new products, support services and building brand awareness.
Funding
The business is dependent on the timely receipt of invoiced sales and managing its level of other working capital investments.

Page 2

 
MERIDIAN AUDIO LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023

FINANCIAL KEY PERFORMANCE INDICATORS
 
Turnover, gross margin and operating profit are key measures of the Company's performance.
 
Turnover for the period was £9.4m (2021 - £8.6m)
Gross margin was 62% (2022 - 62%)
Operating profit was £1.0m (2022 - £1.6m)

Growth in positive net worth is seen as an important long-term target for the business. The reported comprehensive income for the year increased the value of shareholder funds by £0.5m however the adjustments arising on revaluation of the Company's freehold property have resulted in a reduction in Balance Sheet net assets from £5.9m to £4.4m.

This report was approved by the board and signed on its behalf by:





D J Buchanan
Director

Date: 14 February 2024
Page 3

 
MERIDIAN AUDIO LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023

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

RESULTS AND DIVIDENDS

The profit for the year, after taxation, amounted to £542,171 (2022 - £1,197,009).

There were no dividends paid during the year (2022 - £NIL) or subsequent to the year end.

DIRECTORS

The directors who served during the year were:

D J Buchanan 
S D Jagoe (resigned 18 December 2023)
S W Park 
N Robson 

DIRECTORS' RESPONSIBILITIES STATEMENT

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 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

MATTERS COVERED IN THE STRATEGIC REPORT

Future developments relevant to the Company are covered in the Strategic Report.

POST BALANCE SHEET EVENTS

During the post year end period, the Company undertook a number of significant refinancing transactions, which have substantially improved its liquidity position (see note 28).

Page 4

 
MERIDIAN AUDIO LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023

DISCLOSURE OF INFORMATION TO AUDITORS

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

AUDITORS

The auditorsPeters Elworthy & Moorewill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf by:
 





D J Buchanan
Director

Date: 14 February 2024

Page 5

 
MERIDIAN AUDIO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MERIDIAN AUDIO LIMITED
 

OPINION


We have audited the financial statements of Meridian Audio Limited (the 'Company') for the year ended 31 May 2023, which comprise the Profit and Loss Account, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 May 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 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.


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.


Page 6

 
MERIDIAN AUDIO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MERIDIAN AUDIO LIMITED (CONTINUED)


OTHER INFORMATION


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 ReportOur 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.


OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
 

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


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


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:


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 Directors' Responsibilities Statement set out on page 4, 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.


Page 7

 
MERIDIAN AUDIO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MERIDIAN AUDIO LIMITED (CONTINUED)


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 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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

we identified the laws and regulations applicable to the Company through discussions with management and from our commercial knowledge and experience of the manufacturing & distribution and licensing sectors;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements, including the Companies Act 2006 and relevant taxation legislation in the jurisdictions in which the Company operates, or the operations of the Company including data protection, employment and health and safety legislation;
we obtained an understanding of the Company’s policies and procedures on compliance with laws and regulations, including documentation of any instances of non-compliance;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting correspondence available; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of fraud through management bias and override of controls. In addressing the risk of fraud through management override of controls we:
 
tested the appropriateness of journal entries and other adjustments;
designed procedures to identify unexpected and unusual journal entries and performed testing to confirm the validity of such postings;
assessed whether the significant accounting judgements and estimates made in the financial statements were indicative of potential bias; and
evaluated the business rationale of any significant transactions that were unusual or outside the normal                   course of business.
 
Page 8

 
MERIDIAN AUDIO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MERIDIAN AUDIO LIMITED (CONTINUED)


AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)
 
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
 
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance; and
enquiring of management as to actual and potential litigation and claims.


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.


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.


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 2006Our 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.





Edward Napper (Senior Statutory Auditor)
  
for and on behalf of
Peters Elworthy & Moore
 
Chartered Accountants
Statutory Auditors
  
Salisbury House
Station Road
Cambridge
CB1 2LA

 
Date: 
14 February 2024
Page 9

 
MERIDIAN AUDIO LIMITED
 
 
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2023

2023
2022
Note
£
£

  

Turnover
 4 
9,391,692
8,639,609

Cost of sales
  
(3,618,408)
(3,257,801)

GROSS PROFIT
  
5,773,284
5,381,808

Distribution costs
  
(801,512)
(351,218)

Administrative expenses
  
(4,149,155)
(3,583,704)

Other operating income
 5 
180,996
200,463

OPERATING PROFIT
 6 
1,003,613
1,647,349

Interest receivable and similar income
 10 
-
502

Interest payable and similar expenses
 11 
(251,885)
(227,657)

PROFIT BEFORE TAX
  
751,728
1,420,194

Tax on profit
 12 
(209,557)
(223,185)

PROFIT FOR THE FINANCIAL YEAR
  
542,171
1,197,009

The notes on pages 16 to 34 form part of these financial statements.

Page 10

 
MERIDIAN AUDIO LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023

2023
2022
£
£


Profit for the financial year

542,171
1,197,009

OTHER COMPREHENSIVE INCOME


Unrealised (deficit)/surplus on revaluation of tangible fixed assets
(1,666,796)
2,836,617

Deferred tax on revaluation of tangible fixed assets
(428,431)
-

OTHER COMPREHENSIVE INCOME FOR THE YEAR
(2,095,227)
2,836,617

TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(1,553,056)
4,033,626

The notes on pages 16 to 34 form part of these financial statements.

Page 11

 
MERIDIAN AUDIO LIMITED
REGISTERED NUMBER: 02710631

BALANCE SHEET
AS AT 31 MAY 2023

2023
2022
Note
£
£

FIXED ASSETS
  

Intangible assets
 13 
1,404,728
1,084,543

Tangible assets
 14 
6,159,398
7,272,182

  
7,564,126
8,356,725

CURRENT ASSETS
  

Stocks
 16 
3,975,817
2,853,413

Debtors: amounts falling due within one year
 17 
1,728,980
1,952,684

Cash at bank and in hand
 18 
57,074
15,894

  
5,761,871
4,821,991

Creditors: amounts falling due within one year
 19 
(8,187,386)
(2,813,721)

NET CURRENT (LIABILITIES)/ASSETS
  
 
 
(2,425,515)
 
 
2,008,270

TOTAL ASSETS LESS CURRENT LIABILITIES
  
5,138,611
10,364,995

Creditors: amounts falling due after more than one year
 20 
(485,890)
(4,443,074)

Deferred tax
 22 
(283,856)
-

  
 
 
(283,856)
 
 
-

NET ASSETS
  
4,368,865
5,921,921


CAPITAL AND RESERVES
  

Called up share capital 
 23 
1,033,476
1,033,476

Revaluation reserve
 24 
3,036,351
5,198,505

Profit and loss account
 24 
299,038
(310,060)

  
4,368,865
5,921,921


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




D J Buchanan
Director

Date: 14 February 2024

The notes on pages 16 to 34 form part of these financial statements.

Page 12

 
MERIDIAN AUDIO LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

£
£
£
£


AT 1 JUNE 2021
1,033,476
2,409,490
(1,554,671)
1,888,295



Profit for the year
-
-
1,197,009
1,197,009

Surplus on revaluation of freehold property
-
2,836,617
-
2,836,617

Transfer of excess depreciation
-
(31,568)
31,568
-

Transfer for land disposal
-
(16,034)
16,034
-



AT 1 JUNE 2022
1,033,476
5,198,505
(310,060)
5,921,921



Profit for the year
-
-
542,171
542,171

Deficit on revaluation of freehold property
-
(1,666,796)
-
(1,666,796)

Deferred tax on revaluation of freehold property
-
(428,431)
-
(428,431)

Transfer of excess depreciation
-
(66,927)
66,927
-


AT 31 MAY 2023
1,033,476
3,036,351
299,038
4,368,865


The notes on pages 16 to 34 form part of these financial statements.

Page 13

 
MERIDIAN AUDIO LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023

2023
2022
£
£

CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the financial year
542,171
1,197,009

ADJUSTMENTS FOR:

Amortisation of intangible assets
167,988
120,505

Depreciation of tangible assets
215,760
151,407

Loss on disposal of tangible assets
-
(358,000)

Interest paid
251,885
227,657

Interest received
-
(502)

Taxation charge
209,557
223,185

(Increase) in stocks
(1,122,404)
(696,311)

Decrease/(increase) in debtors
223,704
(1,005,657)

Increase in creditors
394,016
207,404

Corporation tax paid
(354,132)
(223,185)

NET CASH GENERATED FROM OPERATING ACTIVITIES

528,545
(156,488)


CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of intangible fixed assets
(488,173)
(229,168)

Purchase of tangible fixed assets
(190,782)
(59,041)

Sale of tangible fixed assets
-
400,000

Interest received
-
502

NET CASH FROM INVESTING ACTIVITIES

(678,955)
112,293
Page 14

 
MERIDIAN AUDIO LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023


2023
2022

£
£



CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of loans
(53,205)
(79,332)

Repayment of/new finance leases
(13,270)
(6,670)

Interest paid
(230,606)
(405,355)

NET CASH USED IN FINANCING ACTIVITIES
(297,081)
(491,357)

(DECREASE) IN CASH AND CASH EQUIVALENTS
(447,491)
(535,552)

Cash and cash equivalents at beginning of year
(126,929)
408,623

CASH AND CASH EQUIVALENTS AT THE END OF YEAR
(574,420)
(126,929)


CASH AND CASH EQUIVALENTS AT THE END OF YEAR COMPRISE:

Cash at bank and in hand
57,074
15,894

Bank overdrafts
(631,494)
(142,823)

(574,420)
(126,929)


The notes on pages 16 to 34 form part of these financial statements.

Page 15

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

1.


GENERAL INFORMATION

Meridian Audio Limited is a private company limited by shares and registered in England and Wales. Its registered office is Latham Road, Huntingdon, Cambridgeshire, PE29 6YE.

2.ACCOUNTING POLICIES

 
2.1

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

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:

 
2.2

GOING CONCERN

The Company generated a trading profit for the year and had net assets of £4,368,865 as at 31 May 2023.
The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. In making this assessment the directors have considered the Company’s financial resources at the time of approving the financial statements, as well as budgets which have been prepared.
The Company continues to perform strongly in the post year end period, despite the ongoing turbulent socio-economic environment, which demonstrates the resilience of the business in uncertain times and the directors remain positive regarding future prospects.
Given the Company’s strong Balance Sheet, combined with the nature of its activities, the directors believe the Company is well placed to manage its business risks successfully in the current economic climate and remain comfortable with the going concern assessment.

Page 16

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.ACCOUNTING POLICIES (CONTINUED)

 
2.3

FOREIGN CURRENCY TRANSLATION

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

 
2.4

TURNOVER

Turnover is the total amount receivable by the Company for goods supplied and services provided, excluding VAT and trade discounts.
For goods sold, turnover is recognised once the risks and rewards of ownership of the goods supplied have been transferred to customers. This usually coincides with acceptance of the goods by the customers, except where bill and hold arrangements operate, in which case revenue is recognised when the Company has completed substantially all its obligations in connection with the sale.
Royalty income is based on structured licence agreements with customers, using either a fixed amount per product sold or a percentage of sales value. Income is recognised on an accruals basis.

 
2.5

OPERATING LEASES

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

 
2.6

PENSIONS

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 17

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.ACCOUNTING POLICIES (CONTINUED)

 
2.7

RESEARCH AND DEVELOPMENT

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research is recognised as an expense when it is incurred.
Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met as detailed in accounting policy note 2.11.

 
2.8

BORROWING COSTS

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.9

CURRENT AND DEFERRED TAXATION

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.10

INTANGIBLE ASSETS

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.

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.

 The estimated useful lives range as follows:

Development expenditure
-
10
years

Page 18

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.ACCOUNTING POLICIES (CONTINUED)

 
2.11

DEVELOPMENT EXPENDITURE

Expenditure on developing assets is recognised as an expense when incurred unless it meets the following recognition criteria for capitalisation:
 
Completion of the asset is technically feasible;
 
The Company intends to complete the intangible asset and use or sell it;
 
The Company has the ability to use the asset or sell it;
 
The intangible asset will generate probable future economic benefits in excess of its costs. Among other things, this requires that there is a market for the output from the intangible asset, or, if it is to be used internally, the asset will be used in generating such benefits;
 
There are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
 
The expenditure attributable to the intangible asset during its development can be measured reliably.

 
2.12

TANGIBLE FIXED ASSETS

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

The estimated useful lives range as follows:

Freehold property
-
50 years
Plant and machinery
-
10 years
Motor vehicles
-
4 years
Fixtures and fittings
-
4 - 5 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 19

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.ACCOUNTING POLICIES (CONTINUED)

 
2.13

REVALUATION OF TANGIBLE FIXED ASSETS

Individual freehold properties are carried at fair value at the date of revaluation less any subsequent accumulated depreciation and impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the Balance Sheet date.
Fair values are determined from market based evidence on a periodic basis.
Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 
2.14

VALUATION OF INVESTMENTS

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.15

STOCKS

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its net realisable value. The impairment loss is recognised immediately in profit or loss.

 
2.16

DEBTORS

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

 
2.17

CASH AND CASH EQUIVALENTS

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.18

CREDITORS

Short term creditors are measured at the transaction value. Other financial liabilities, including bank loans, are measured at fair value, which is equal to the initial transaction value less any transaction costs and subsequent capital repayments.

Page 20

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.ACCOUNTING POLICIES (CONTINUED)

 
2.19

PROVISIONS FOR LIABILITIES

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.20

FINANCIAL INSTRUMENTS

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.


3.



JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Preparation of the financial statements requires management to make significant judgements and estimates.
The items in the financial statements where these judgements and estimates have been made include:
Capitalisation of development costs
A judgement has been made on whether development costs meet the criteria for capitalisation and whether they have been subsequently impaired which will impact the amount of capitalised development expenditure reported in the Balance Sheet.
Revenue from long term contracts
A judgement has been made on the percentage completeness of ongoing long term revenue contracts at the period end which will impact the amount of revenue reported in the Profit and Loss Account.
Additionally, areas of judgement and estimates include:
Carrying value of investment in subsidiaries
A judgement has been made on the carrying value of its investment in its subsidiary company and as a result a significant provision has been taken and is reflected in the Balance Sheet.
Revaluation of freehold land and buildings
A judgement has been made on the fair value of freehold land and buildings. Fair values have been determined by the directors, based on professional advice received. 

Page 21

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

4.


TURNOVER

An analysis of turnover by class of business is as follows:


2023
2022
£
£

IP licensing
4,777,615
4,756,523

Sale of hi-fidelity audio equipment
4,614,077
3,883,086

9,391,692
8,639,609


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
2,876,636
2,513,601

North America
1,537,446
1,513,783

Rest of the World
4,977,610
4,612,225

9,391,692
8,639,609



5.


OTHER OPERATING INCOME

2023
2022
£
£

Net rents receivable
180,996
180,996

Government grants receivable
-
19,467

180,996
200,463


Government grants in 2022 represented amounts receivable under the UK Coronavirus Job Retention scheme.


6.


OPERATING PROFIT

The operating profit is stated after charging:

2023
2022
£
£

Research & development charged as an expense
821,680
1,154,390

Exchange differences
(12,179)
(55,564)

Page 22

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

7.


AUDITORS' REMUNERATION

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
31,000
24,850


8.


EMPLOYEES

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
2,650,940
2,644,587

Social security costs
372,278
305,528

Cost of defined contribution scheme
177,224
144,509

3,200,442
3,094,624


Key management personnel compensation in the period was £1,095,532 (2022 - £863,984).

The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Manufacturing and distribution
26
25



Sales and administration
24
21



Research and development
22
18



Management
2
2

74
66

Page 23

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

9.


DIRECTORS' REMUNERATION

2023
2022
£
£

Directors' emoluments
389,143
472,065

Company contributions to defined contribution pension schemes
11,085
9,752

400,228
481,817


During the year retirement benefits were accruing to 2 directors (2022 - 1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £235,975 (2022 - £278,259).


10.


INTEREST RECEIVABLE

2023
2022
£
£


Other interest receivable
-
502

-
502


11.


INTEREST PAYABLE AND SIMILAR EXPENSES

2023
2022
£
£


Bank interest payable
73,699
48,983

Other loan interest payable
178,186
178,674

251,885
227,657

Page 24

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

12.


TAXATION


2023
2022
£
£

CORPORATION TAX


Withholding tax charges
354,132
290,812

Adjustments in respect of previous periods
-
(67,627)

TOTAL CURRENT TAX
354,132
223,185

DEFERRED TAX


Origination and reversal of timing differences
(144,575)
-

TOTAL DEFERRED TAX
(144,575)
-


TAX ON PROFIT
209,557
223,185

FACTORS AFFECTING TAX CHARGE FOR THE YEAR

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 20.00% (2022 - 19.00%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
751,728
1,420,194


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 20.00% (2022 - 19.00%)
150,366
269,837

EFFECTS OF:


Fixed asset differences
(10,477)
(62,533)

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
26,158
13,357

Other permanent differences
(70,336)
(55,047)

Adjustments to tax charge in respect of prior periods
-
(67,627)

Additional deduction for R&D expenditure
-
(47,970)

Chargeable gains/(losses)
(353,914)
564,758

Remeasurement of deferred tax for changes in tax rates
(64,507)
215,496

Movement in deferred tax not recognised
178,135
(897,898)

Withholding tax charges
354,132
290,812

TOTAL TAX CHARGE FOR THE YEAR
209,557
223,185

Page 25

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
 
12.TAXATION (CONTINUED)


FACTORS THAT MAY AFFECT FUTURE TAX CHARGES

Unrelieved trading losses estimated at £9,608,000 (2022 - £9,667,000) remain available to offset against future taxable trading profits. No deferred tax asset has been recognised in respect of the tax losses due to uncertainty over the timing of their recovery. The Company also has fixed asset and other short term timing differences held on the balance sheet estimated at £3,172,000 (2022 - £5,658,000), which would result in a deferred tax liability were it not for the existence of the unrelieved trading losses.


13.


INTANGIBLE ASSETS




Development expenditure

£



COST


At 1 June 2022
1,205,048


Additions - internal
488,173



At 31 May 2023

1,693,221



AMORTISATION


At 1 June 2022
120,505


Charge for the year on owned assets
167,988



At 31 May 2023

288,493



NET BOOK VALUE



At 31 May 2023
1,404,728



At 31 May 2022
1,084,543



Page 26

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

14.


TANGIBLE FIXED ASSETS





Freehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Total

£
£
£
£
£



COST OR VALUATION


At 1 June 2022
7,050,000
798,235
5,700
630,719
8,484,654


Additions
18,751
713,599
-
37,422
769,772


Disposals
-
(35,997)
-
-
(35,997)


Revaluations
(1,768,751)
-
-
-
(1,768,751)



At 31 May 2023

5,300,000
1,475,837
5,700
668,141
7,449,678



DEPRECIATION


At 1 June 2022
-
696,867
4,275
511,330
1,212,472


Charge for the year on owned assets
101,955
37,038
1,425
75,342
215,760


Disposals
-
(35,997)
-
-
(35,997)


On revalued assets
(101,955)
-
-
-
(101,955)



At 31 May 2023

-
697,908
5,700
586,672
1,290,280



NET BOOK VALUE



At 31 May 2023
5,300,000
777,929
-
81,469
6,159,398



At 31 May 2022
7,050,000
101,368
1,425
119,389
7,272,182

The freehold land and buildings were valued by the directors as at 31 May 2023, based on professional advice received. The basis of valuation was open market value, which is equivalent to its fair value.

If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:

2023
2022
£
£



Cost
2,525,450
2,506,699

Accumulated depreciation
(645,388)
(610,359)

NET BOOK VALUE
1,880,062
1,896,340

Page 27

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

15.


FIXED ASSET INVESTMENTS





Investments in subsidiary companies

£





At 1 June 2022
8,024,639


Disposals
(8,024,639)



At 31 May 2023

-





At 1 June 2022
8,024,639


Impairment on disposals
(8,024,639)



At 31 May 2023

-



NET BOOK VALUE



At 31 May 2023
-



At 31 May 2022
-


SUBSIDIARY UNDERTAKING


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Meridian Trustees Limited
England and Wales
Ordinary
100%

The aggregate of the share capital and reserves as at 31 May 2023 and the profit or loss for the year ended on that date for the subsidiary undertaking were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)

Meridian Trustees Limited
1
-

Page 28

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

16.


STOCKS

2023
2022
£
£

Raw materials and consumables
2,610,056
1,890,143

Work in progress (goods to be sold)
105,136
28,167

Finished goods and goods for resale
1,260,625
935,103

3,975,817
2,853,413



17.


DEBTORS

2023
2022
£
£


Trade debtors
697,291
293,073

Other debtors
53,046
64,944

Prepayments and accrued income
978,643
1,594,667

1,728,980
1,952,684



18.


CASH AND CASH EQUIVALENTS

2023
2022
£
£

Cash at bank and in hand
57,074
15,894

Less: bank overdrafts
(631,494)
(142,823)

(574,420)
(126,929)


Page 29

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

19.


CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2023
2022
£
£

Bank overdrafts
631,494
142,823

Bank loans
1,077,694
1,130,899

Other loans
4,423,407
-

Trade creditors
1,056,237
785,570

Other taxation and social security
360,657
168,052

Obligations under finance lease and hire purchase contracts
143,305
14,029

Other creditors
46,341
81,815

Accruals and deferred income
448,251
490,533

8,187,386
2,813,721


Bank loans and overdrafts are secured upon the freehold property. Interest on this loan is charged at 3.95% above the Bank of England base rate.
Other loans are secured by a fixed and floating charge on the assets of the Company and ranking behind the bank security. Interest is charged on these loans at a fixed rate of 4% per annum. The interest is accrued and added to the loan balance with the total loan balance repayable in more than one year.
Subsequent to the year end, the bank loan, bank overdraft and other loans were all repaid in full, funded by trading and the sale of the freehold land and buildings.


20.


CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2023
2022
£
£

Other loans
-
4,393,628

Net obligations under finance leases and hire purchase contracts
485,890
49,446

485,890
4,443,074


Other loans are secured by a fixed and floating charge on the assets of the Company and ranking behind the bank security. Interest is charged on these loans at a fixed rate of 4% per annum. The interest is accrued and added to the loan balance with the total loan balance repayable in more than one year.

Page 30

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

21.


LOANS


Analysis of the maturity of loans is given below:


2023
2022
£
£

AMOUNTS FALLING DUE WITHIN ONE YEAR

Bank loans
1,077,694
1,130,899

Other loans
4,423,407
-


5,501,101
1,130,899


AMOUNTS FALLING DUE 1-2 YEARS

Other loans
-
4,393,628


-
4,393,628


5,501,101
5,524,527



22.


DEFERRED TAXATION




2023


£






Charged to profit or loss
(144,575)


Charged to other comprehensive income
428,431



AT END OF YEAR
283,856

The deferred taxation balance is made up as follows:

2023
2022
£
£


Tax losses carried forward
(144,575)
-

Capital gains/(losses)
428,431
-

283,856
-

Page 31

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

23.


SHARE CAPITAL

2023
2022
£
£
ALLOTTED, CALLED UP AND FULLY PAID



734,713 (2022 - 734,713) Ordinary shares of £1.00 each
734,713
734,713
398,348 (2022 - 398,348) A Ordinary shares of £0.75 each
298,761
298,761
1 (2022 - 1) B Ordinary share of £1.00
1
1
1 (2022 - 1) C Ordinary share of £1.00
1
1

1,033,476

1,033,476



24.


RESERVES

Revaluation reserve

This is a non-distributable reserve used to record the movements in the fair value of land and buildings.

Profit and loss account

This includes all current and prior period retained profits and losses.

Page 32

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
25.


ANALYSIS OF NET DEBT






At 1 June 2022
Cash flows
New finance leases
Other non-cash changes
At 31 May 2023
£

£

£

£

£

Cash at bank and in hand

15,894

41,180

-

-

57,074

Bank overdrafts

(142,823)

(488,671)

-

-

(631,494)

Debt due after 1 year

(4,393,628)

-

-

4,393,628

-

Debt due within 1 year

(1,130,899)

23,426

-

(4,393,628)

(5,501,101)

Finance leases

(63,475)

13,270

(578,990)

-

(629,195)



(5,714,931)
(410,795)
(578,990)
-
(6,704,716)


26.


PENSION COMMITMENTS

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost represents contributions payable by the Company to the fund and amounted to £177,224 (2022 - £144,509). Contributions totalling £29,541 (2022 - £20,136) were payable to the fund at the balance sheet date and are included in creditors.


27.


RELATED PARTY TRANSACTIONS

Muse Holdings S.A.R.L
 
Included within other loans is a loan of £4,423,407 (2022 - £4,393,628) due to Muse Holdings S.A.R.L, a company which hold significant influence over the Company and in which S D Jagoe is a common director. This loan is secured, bears interest at 4% per annum and is repayable in full in May 2024. The interest charged to the Company during the period amounted to £178,186 (2022 - £178,674).
 
MQA Limited
 
During the period the Company charged £180,996 (2022 - £180,996) for management time and rent to MQA Limited, a company in which S D Jagoe is a common director. The balance due from MQA Limited as at 31 May 2023 was £16,183 (2022 - £16,200), which is included within trade debtors.
 
Transactions with Directors
 
During the year a director made advances to the company totalling £100,000, which were subsequently repaid. The balance due to directors as at 31 May 2023 was £NIL (2022 - £NIL).

Page 33

 
MERIDIAN AUDIO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

28.


POST BALANCE SHEET EVENTS

Subsequent to the year end, the Company repaid other loans of £4,423,407 due to Muse Holdings S.A.R.L. This was funded through a mixture of trading receipts and the sale of the Company's freehold property, with bank loans and overdrafts also being cleared. Appropriate adjustments have been reflected in the financial statements to restate the carrying value of the property at the post year end sale proceeds of £5.3m as well as a deferred tax liability arising from the corporate tax liability due on sale.
In addition, during the post year end period the Company repurchased 113,293 A Ordinary shares for total consideration of £481,495. This transaction was financed by an issue of 113,292 Ordinary shares for consideration of £1m.


29.


CONTROLLING PARTY

In the opinion of the directors, D J Buchanan is the ultimate controlling party.

Page 34