Company registration number 09104337 (England and Wales)
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
COMPANY INFORMATION
Directors
Mr G L Dexter
Mr C Emerson
Ms N A Spence
Mr C A Greene
Secretary
Ms N A Spence
Company number
09104337
Registered office
Woodside 2
Dunmow Road
Birchanger
Bishop's Stortford
CM23 5RG
Auditor
Ensors Accountants LLP
Victory House
Vision Park
Chivers Way, Histon
Cambridge
CB24 9ZR
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 33
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 1 -

The directors present the strategic report for the year ended 31 August 2024.

 

Business Model

 

The business operates through three principal sales channels being specialist consumer electronics, installed audio and international. Each of these channels is managed through dedicated sales teams supported by a business wide infrastructure covering finance, warehousing logistics and marketing.

Review of the business

The financial year to 31st August 2024 were sales of £11.6 million (2023 - £12.8 million) resulting in an operating loss of £0.35 million (2023 – profit £0.39 million). The wider world environment continued to be challenging with considerable uncertainty impacting consumer confidence, although the key sales variance was the discontinuance of the iFi distribution arrangements from October 2023 that resulted in a £0.9m fall in sales in the year. Adjusting for iFi, sales on a like for like basis increased by 2% in the year with international sales growing by 7% and the UK sales falling by 5% with underlying UK retail sales up and sales through the install channel down. In the year we incurred £159.5k of exceptional costs relating to professional fees in respect of refinancing the business and professional fees relating to a successful defence of an HMRC R&D Tax investigation. As ever, the successful running of the business requires the support of all our employees, our suppliers and key business partners and once again they have all contributed during the year, albeit in more challenging circumstances, and their support is much appreciated.

 

Key Performance Indicators

 

Gross profit percentage in the year increased on the prior year with the impact of higher priced new products and the full year effect of the price increases put through in the prior year. The ordinary course operating costs in the year were in line with the prior year with tight costs control being implemented across the whole business. The operating loss in the year was disappointing and is a reflection of the challenging market conditions across most geographical markets.

 

Product Development

 

Product development is a key part of the business strategy and fundamental to delivering future sales growth for the business. We have continued to invest in new product development despite the challenging market conditions, completing the launch of the Q5000 range and launching the new entry level speaker range Q3000c, both of which has been well received in the market. For QED we launched the groundbreaking Supremus speaker cable incorporating Zirconia plugs and Goldring launched the GR3 turntable, its first turntable product in nearly 20 years, as well as the Goldring Ethos SE cartridge. In 2025, we will launch a new range of sub-woofers, install speakers and for QED a new range of mid-market cables. Our new product programme looks forward at least 24 months and we are already well advanced on the new product developments for launch in 2026.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 2 -
Principal risks and uncertainties

As with all businesses, there are a range of risks and uncertainties that have the potential to disrupt the operations of the business. These include product failure, loss of key personnel, customer reliance, competitive market pricing and technology change. However, it is considered that these risks and uncertainties are manageable in the short to medium term. The key risks with a capability to impact the business in a material manner in the near term are:

 

 

 

 

 

Outlook

The new financial year is proving to be challenging with the expectation that sales will be in line or marginally above the prior year. The business is taking actions to reduce its cost base to mitigate the impact of the weak sales environment and the current expectation is that at best the operating result will be breakeven.

On behalf of the board

Mr G L Dexter
Director
28 May 2025
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 August 2024.

Principal activities

The Group's principal activity is the design, manufacture and supply of products into the hi-fi, home theatre and home entertainment markets, both in the UK and abroad.

 

Overview

The Company is a holding company for the wider group which incorporates the two main trading entities of Armour Home Electronics Limited and Armour Hong Kong Limited.

 

Business review

A review of the Group during the year, its position at the year end and an indication of likely future developments are detailed in the Strategic Report on pages 1 and 2.

Results and dividends

The results for the year are set out on page 9.

The Group's profit and loss account is shown on page 9 of these financial statements. Sales for the year were £11.6 million (2023: £12.8 million) and the loss from operations was £0.35 million (2023 £0.39 million profit). The Group's balance sheet is shown on page 11 of these financial statements. This shows the Group's financial position as 31 August 2024 and shareholders' funds of £3.3 million (2023: £3.5 million).

 

The directors have not proposed a final dividend for the year ended 31 August 2024 (2023: £nil).

Directors

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

Mr G L Dexter
Mr C Emerson
Ms N A Spence
Mr C A Greene
Research and development

A key foundation of the group strategy is its investment in research and development. The group has a full program of new products under development across all the key brands, which when launched are expected to provide a significant boost to sales over the next 2 to 3 years.   The directors regard investment in research and development, and the consequential launch of new and improved products, to be fundamental to driving future sales growth and the continuing success of the business in the medium to long term. Where development costs satisfy criteria set out under the applicable accounting standards, they are capitalised and amortised over the period commensurate with the revenues to which it relates. The directors consider that this treatment of development costs continues to reflect the activities of the group and consequently these financial statements reflect this policy.

Auditor

In accordance with the company's articles, a resolution proposing that Ensors Accountants LLP be reappointed as auditor of the group will be put at a General Meeting.

Energy and carbon report

As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 4 -
Statement of disclosure to auditor

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

On behalf of the board
Mr G L Dexter
Director
28 May 2025
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2024
- 5 -

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

 

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

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
- 6 -
Opinion

We have audited the financial statements of Q Acoustics Limited and its Subsidiaries (the 'group') for the year ended 31 August 2024 set out on pages 9 to 33. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
- 7 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent 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 parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

 

 

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
- 8 -

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 an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Jayson Lawson
Senior Statutory Auditor
For and on behalf of
28 May 2025
Ensors Accountants LLP
Chartered Accountants
Statutory Auditor
Victory House
Vision Park
Chivers Way, Histon
Cambridge
CB24 9ZR
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
11,649,592
12,812,439
Change in stocks of finished goods and in work in progress
(347,597)
(814,570)
Raw materials and consumables
(41,621)
(103,185)
Other external expenses
(6,210,733)
(6,617,956)
Staff costs
7
(2,327,002)
(2,298,844)
Depreciation and other amounts written off tangible and intangible fixed assets
4
(802,678)
(668,844)
Exceptional item
5
(159,509)
-
0
Other operating expenses
(2,110,496)
(1,913,059)
Operating (loss)/profit
4
(350,044)
395,981
Interest receivable and similar income
9
473
424
Interest payable and similar expenses
10
(434,676)
(367,570)
(Loss)/profit before taxation
(784,247)
28,835
Tax on (loss)/profit
11
194,989
-
0
(Loss)/profit for the financial year
(589,258)
28,835
(Loss)/profit for the financial year is all attributable to the owners of the parent company.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2024
- 10 -
2024
2023
£
£
(Loss)/profit for the year
(589,258)
28,835
Other comprehensive income
Currency translation gain taken to retained earnings
20,491
29,725
Cash flow hedges gain arising in the year
-
0
-
0
Total comprehensive income for the year
(568,767)
58,560
Total comprehensive income for the year is all attributable to the owners of the parent company.
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP BALANCE SHEET
AS AT
31 AUGUST 2024
31 August 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
12
3,706,308
3,502,704
Tangible assets
13
556,743
567,689
4,263,051
4,070,393
Current assets
Stocks
16
4,297,479
4,686,697
Debtors
17
3,146,887
2,844,378
Cash at bank and in hand
252,304
340,546
7,696,670
7,871,621
Creditors: amounts falling due within one year
18
(7,092,312)
(7,914,819)
Net current assets/(liabilities)
604,358
(43,198)
Total assets less current liabilities
4,867,409
4,027,195
Creditors: amounts falling due after more than one year
19
(1,556,708)
(522,727)
Net assets
3,310,701
3,504,468
Capital and reserves
Called up share capital
23
15
10
Share premium account
374,995
-
0
Profit and loss reserves
2,935,691
3,504,458
Total equity
3,310,701
3,504,468
The financial statements were approved by the board of directors and authorised for issue on 28 May 2025 and are signed on its behalf by:
28 May 2025
Ms N A Spence
Director
Company registration number 09104337 (England and Wales)
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
COMPANY BALANCE SHEET
AS AT 31 AUGUST 2024
31 August 2024
- 12 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investments
14
1
1
Current assets
Debtors
17
375,009
9
Net current assets
375,009
9
Net assets
375,010
10
Capital and reserves
Called up share capital
23
15
10
Share premium account
374,995
-
0
Total equity
375,010
10

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2023 - £0 profit).

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 28 May 2025 and are signed on its behalf by:
28 May 2025
Ms N A Spence
Director
Company registration number 09104337 (England and Wales)
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 September 2022
10
-
0
3,445,898
3,445,908
Year ended 31 August 2023:
Profit for the year
-
-
28,835
28,835
Other comprehensive income:
Currency translation differences
-
-
29,725
29,725
Total comprehensive income
-
-
58,560
58,560
Balance at 31 August 2023
10
-
0
3,504,458
3,504,468
Year ended 31 August 2024:
Loss for the year
-
-
(589,258)
(589,258)
Other comprehensive income:
Currency translation differences
-
-
20,491
20,491
Total comprehensive income
-
-
(568,767)
(568,767)
Issue of share capital
23
5
374,995
-
375,000
Balance at 31 August 2024
15
374,995
2,935,691
3,310,701
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
- 14 -
Share capital
Share premium account
Total
Notes
£
£
£
Balance at 1 September 2022
10
-
0
10
Year ended 31 August 2023:
Profit and total comprehensive income for the year
-
-
-
0
Balance at 31 August 2023
10
-
10
Year ended 31 August 2024:
Profit and total comprehensive income
-
-
-
0
Issue of share capital
23
5
374,995
375,000
Balance at 31 August 2024
15
374,995
375,010
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2024
- 15 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
841,571
2,660,247
Interest paid
(434,676)
(367,570)
Net cash inflow from operating activities
406,895
2,292,677
Investing activities
Purchase of intangible assets
(838,715)
(988,820)
Proceeds on disposal of intangibles
1
-
Purchase of tangible fixed assets
(156,621)
(249,979)
Proceeds on disposal of tangible fixed assets
(1)
(1)
Interest received
473
424
Net cash used in investing activities
(994,863)
(1,238,376)
Financing activities
Proceeds from issue of shares
375,000
-
Repayment of borrowings
741,483
(289,773)
Movement on bank loans
(616,757)
(889,891)
Net cash generated from/(used in) financing activities
499,726
(1,179,664)
Net decrease in cash and cash equivalents
(88,242)
(125,363)
Cash and cash equivalents at beginning of year
340,546
465,909
Cash and cash equivalents at end of year
252,304
340,546
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
- 16 -
1
Accounting policies
Company information

Q Acoustics Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Woodside 2, Dunmow Road, Birchanger, Bishop's Stortford, CM23 5RG.

 

The group consists of Q Acoustics Limited and all of its subsidiaries.

1.1
Accounting convention

Basis of preparation

The financial statements are prepared under the historical cost convention.

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

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

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 17 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Q Acoustics Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 August 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

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

1.5
Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Turnover is recognised when the risks and rewards of ownership of the goods have passed to the customer, which is generally on delivery or when the services have been provided.

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

1.6
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical; commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 18 -
1.7
Intangible fixed assets - goodwill

Acquired goodwill is written off in equal annual installments over its estimated useful economic life.

 

Negative goodwill arising on an acquisition of a subsidiary undertaking is the difference between the fair value of the consideration paid and the fair value of the assets and liabilities acquired. Negative goodwill is capitalised and credited through the profit and loss account over the directors' estimate of its useful economic life which is 5 years. Impairment tests on the carrying value of goodwill are undertaken:

 

1.8
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost or value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

 

The company has recognised development cost as an intangible asset as:

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

Patents
Straight line 3-5 years over the assets useful life
Development Costs
Straight line 2-5 years over the assets useful life
1.9
Tangible fixed assets

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

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

Leasehold land and buildings
Over life of lease
Plant and machinery
10%/15%/20% straight line
Fixtures, fittings & equipment
15% straight line
Computer equipment
33% straight line
Motor vehicles
25% straight line

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 19 -
1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.12
Stocks

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

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

1.13
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 20 -
1.14
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 21 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.16
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.17
Taxation

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

Current tax

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 22 -
Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different to those in which they are recognised in the financial statements.

 

Deferred tax assets are recognised only to the extent that the directors consider it more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

 

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.

1.18
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.19
Retirement benefits

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

1.20
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.21
Foreign exchange

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.

 

The results of overseas operations are translated at the average rates of exchange during the period and the balance sheet translated into sterling at the rate of exchange ruling on the balance sheet date. Exchange differences which arise from translation of the opening net assets and results of foreign subsidiary undertakings are taken to reserves.

1.22

Exceptional items

Exceptional items are material events or transactions that are distinct from the ordinary activities of the company and are not expected to recur frequently. These items must be disclosed separately in the financial statements to ensure transparency and accurate representation of the company's financial performance.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 23 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

Bad debt provision

The group makes an estimate of the recoverable value of trade debtors. When assessing impairment of trade debtors management considers factors including the current credit rating of the debtor, the aging profile of debtors, whether covered by insurance and historical experience. The bad debt provision at the end of the accounting period was £47,642 (2023: £47,419).

 

Stock provision

The group monitors the value of stock lines regularly to ensure stock is recorded and the lower of cost and net realisable value. Where this is not the case a provision is made to write down the value of stock to the correct level. The condition of stock and current market conditions are also taken into account when making stock provisions. The stock provision at the end of the accounting period was £255,396 (2023 £247,090)

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Design & manufacture of hi-fi products
11,649,592
12,812,439
2024
2023
£
£
Other revenue
Interest income
473
424

The disclosure of the geographical analysis of turnover has been dispensed with as in the directors' opinion such disclosure would be seriously prejudicial to the company's interest.

4
Operating (loss)/profit
2024
2023
£
£
Operating (loss)/profit for the year is stated after charging/(crediting):
Exchange gains
(30,038)
(98,024)
Research and development costs
55,568
29,920
Depreciation of owned tangible fixed assets
167,568
142,282
Amortisation of intangible assets
635,112
526,150
Profit on disposal of intangible assets
(2)
412
Operating lease charges
468,049
486,201
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 24 -
5
Exceptional item
2024
2023
£
£
Refinancing
159,509
-

Exceptional items relate to arrangement fees and associated professional expenses to put new funding in place.

 

6
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,000
5,000
Audit of the financial statements of the company's subsidiaries
26,118
23,753
31,118
28,753
7
Employees

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

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Manufacturing
6
6
-
-
Selling and distribution
15
13
-
-
Administration
24
26
-
-
Total
45
45
-
0
-
0

Their aggregate remuneration charged to the profit and loss account comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
1,979,607
1,913,693
-
0
-
0
Social security costs
245,495
241,438
-
-
Pension costs
101,900
143,713
-
0
-
0
2,327,002
2,298,844
-
0
-
0
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 25 -
8
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
277,266
300,361
Company pension contributions to defined contribution schemes
84,335
56,344
Sums paid to third parties for directors' services
44,667
42,000
406,268
398,705

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
218,270
221,009
9
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
473
424
10
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
8,549
2,820
Other interest
426,127
364,750
Total finance costs
434,676
367,570
11
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
(194,989)
-
0
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
11
Taxation
(Continued)
- 26 -

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

2024
2023
£
£
(Loss)/profit before taxation
(784,247)
28,835
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.51%)
(196,062)
6,204
Tax effect of expenses that are not deductible in determining taxable profit
909
915
Tax effect of income not taxable in determining taxable profit
-
0
(2,152)
Change in unrecognised deferred tax assets
177,000
(22,855)
Effect of change in corporation tax rate
-
3,186
Permanent capital allowances in excess of depreciation
1,071
(2,246)
Under/(over) provided in prior years
(194,989)
-
0
Other short term differences
17,082
16,948
Taxation credit
(194,989)
-

At the year end the group had approx. £7.1m of unrelieved tax losses (2023: £6.9m). A deferred tax asset of £1,131,287 has been recognised on these losses.

12
Intangible fixed assets
Group
Goodwill
Patents
Development Costs
Total
£
£
£
£
Cost
At 1 September 2023
(3,613,943)
20,344
4,238,782
645,183
Additions - internally developed
-
0
-
0
838,715
838,715
Disposals
-
0
-
0
(430,752)
(430,752)
At 31 August 2024
(3,613,943)
20,344
4,646,745
1,053,146
Amortisation and impairment
At 1 September 2023
(3,613,943)
12,938
743,484
(2,857,521)
Amortisation charged for the year
-
0
2,759
632,353
635,112
Disposals
-
0
-
0
(430,753)
(430,753)
At 31 August 2024
(3,613,943)
15,697
945,084
(2,653,162)
Carrying amount
At 31 August 2024
-
0
4,647
3,701,661
3,706,308
At 31 August 2023
-
0
7,406
3,495,298
3,502,704
The company had no intangible fixed assets at 31 August 2024 or 31 August 2023.
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
12
Intangible fixed assets
(Continued)
- 27 -
13
Tangible fixed assets
Group
Leasehold land and buildings
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 September 2023
101,248
977,703
71,516
45,528
43,657
1,239,652
Additions
4,166
142,037
720
9,698
-
0
156,621
Disposals
-
0
(121,534)
(557)
(20,052)
-
0
(142,143)
At 31 August 2024
105,414
998,206
71,679
35,174
43,657
1,254,130
Depreciation and impairment
At 1 September 2023
34,998
521,999
71,180
6,731
37,055
671,963
Depreciation charged in the year
10,649
129,266
734
20,317
6,602
167,568
Eliminated in respect of disposals
-
0
(121,535)
(557)
(20,052)
-
0
(142,144)
At 31 August 2024
45,647
529,730
71,357
6,996
43,657
697,387
Carrying amount
At 31 August 2024
59,767
468,476
322
28,178
-
0
556,743
At 31 August 2023
66,250
455,704
336
38,797
6,602
567,689
The company had no tangible fixed assets assets at 31 August 2024 or 31 August 2023.
14
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
1
1
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
14
Fixed asset investments
(Continued)
- 28 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 September 2023 and 31 August 2024
1
Carrying amount
At 31 August 2024
1
At 31 August 2023
1
15
Subsidiaries

Details of the company's subsidiaries at 31 August 2024 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
AHE123 Limited (Formerly Alphason Designs Limited)*
United Kingdom
Dormant
"A" shares
100.00
Armour Home Electronics Limited
United Kingdom
Development & trading of audio products
"A" shares
100.00
Armour Hong Kong Limited*
Hong Kong
Management services & trading of audio products
"A" shares
100.00
Goldring Producst Limited*
United Kingdom
Dormant
"A" shares
100.00
Myryad Systems Limited*
United Kingdom
Dormant
"A" shares
100.00
QED Audio Products Limited*
United Kingdom
Dormant
"A" shares
100.00

*These subsidiaries are held by Armour Home Electronics Limited

16
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
523,149
564,770
-
-
Finished goods and goods for resale
3,774,330
4,121,927
-
0
-
0
4,297,479
4,686,697
-
-
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 29 -
17
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,649,366
1,787,189
-
0
-
0
Corporation tax recoverable
194,989
-
0
-
0
-
0
Amounts owed by group undertakings
-
-
375,000
-
Other debtors
431,296
315,422
9
9
Prepayments and accrued income
371,236
241,767
-
0
-
0
2,646,887
2,344,378
375,009
9
Deferred tax asset (note 21)
500,000
500,000
-
0
-
0
3,146,887
2,844,378
375,009
9
18
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans
20
2,304,817
2,921,574
-
0
-
0
Other borrowings
20
491,593
784,091
-
0
-
0
Trade creditors
3,548,730
3,547,941
-
0
-
0
Other taxation and social security
166,926
139,012
-
-
Other creditors
396,437
326,198
-
0
-
0
Accruals and deferred income
183,809
196,003
-
0
-
0
7,092,312
7,914,819
-
0
-
0
19
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Other borrowings
20
1,556,708
522,727
-
0
-
0
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 30 -
20
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
2,304,817
2,921,574
-
0
-
0
Other loans
2,048,301
1,306,818
-
0
-
0
4,353,118
4,228,392
-
-
Payable within one year
2,796,410
3,705,665
-
0
-
0
Payable after one year
1,556,708
522,727
-
0
-
0

The long-term loans are secured by fixed charges over the assets of the group.

Under an asset based lending agreement the group can borrow funds based on the value of unpaid sales invoices and stock held in its UK warehouse. Amounts borrowed are secured by way of a cross guarantee and debenture over the assets of the group. Included within bank loans and overdrafts are secured loans of £2,304,817 (2023 - £2,921,574).

 

Included within other loans are guaranteed loans of £nil (2023 - £681,818), of which £nil (2023 - £409,091) is payable in less than one year and £nil (2023 - £272,727) is due after more than one year.

21
Deferred taxation

Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Assets
Assets
2024
2023
Group
£
£
Accelerated capital allowances
(631,287)
(631,287)
Tax losses
1,131,287
1,131,287
500,000
500,000
The company has no deferred tax assets or liabilities.
There were no deferred tax movements in the year.

The deferred tax asset set out above is expected to reverse within the next few years and relates to the utilisation of tax losses against future expected profits. The deferred tax liability set out above is expected to reverse and relates to accelerated capital allowances that are expected to mature within the same period.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 31 -
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
101,900
143,713

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. Contributions totalling £25,927 (2023 - £20,797) were payable to the fund at the year end and are included in creditors.

23
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of 1p each
780
250
7
2
Ordinary B of 1p each
750
750
8
8
1,530
1,000
15
10

During the year 530 Ordinary A shares of 1p each were issued at a premium of £707.54 each

24
Financial commitments, guarantees and contingent liabilities

The company is party to the Group's funding and credit facilities, under which there are cross guarantees, as detailed in note 20 of these financial statements.

25
Operating lease commitments
Lessee

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

Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
343,084
282,158
-
-
Between two and five years
380,592
210,704
-
-
723,676
492,862
-
-
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 32 -
26
Related party transactions
Transactions with related parties

The company has taken advantage of the exemption available in FRS 102 not to disclose transactions entered into between two or more members of a group.

 

The company has a loan agreement with Hawk Investment Holdings Limited (Transferred from Armour Group Plc, a company which was previously the parent company) for £2,048,301 (2023 - £625,000). The company incurred loan interest of £80,479 (2023 - £94,785) during the year.

27
Controlling party

The company's ultimate controlling party is a Guernsey registered trust.

28
Cash generated from group operations
2024
2023
£
£
(Loss)/profit for the year after tax
(589,258)
28,835
Adjustments for:
Taxation credited
(194,989)
-
0
Finance costs
434,676
367,570
Investment income
(473)
(424)
(Gain)/loss on disposal of intangible assets
(2)
412
Amortisation and impairment of intangible assets
635,112
526,150
Depreciation and impairment of tangible fixed assets
167,568
142,282
Foreign exchange gains on cash equivalents
20,491
29,725
Movements in working capital:
Decrease in stocks
389,218
917,755
(Increase)/decrease in debtors
(107,520)
328,701
Increase in creditors
86,748
319,241
Cash generated from operations
841,571
2,660,247
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 33 -
29
Analysis of changes in net debt - group
1 September 2023
Cash flows
31 August 2024
£
£
£
Cash at bank and in hand
340,546
(88,242)
252,304
Borrowings excluding overdrafts
(4,228,392)
(124,726)
(4,353,118)
(3,887,846)
(212,968)
(4,100,814)
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