REGISTERED NUMBER: 00957438 (England and Wales)

Polar Audio Limited

Strategic Report, Report of the Director and

Audited Financial Statements for the Year Ended 31 December 2024

Page

Company Information

1

Strategic Report

2

Report of the Director

5

Report of the Independent Auditors

7

Profit and Loss Account

11

Other Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Cash Flow Statement

15

Notes to the Cash Flow Statement

16

Notes to the Financial Statements

17

DIRECTOR:

J N Midgley

SECRETARY:

D & W Services Limited

REGISTERED OFFICE:

19 Montpelier Avenue

Bexley

Kent

DA5 3AP

REGISTERED NUMBER:

00957438 (England and Wales)

AUDITORS:

Swindells LLP

Chartered Accountants

and Statutory Auditor

Atlantic House

8 Bell Lane

Bellbrook Industrial Estate

Uckfield

East Sussex

TN22 1QL

The director presents his strategic report for the year ended 31 December 2024.

REVIEW OF BUSINESS

The company is an established trade supplier of music equipment, audio visual products and solutions to a diverse market including retailers, professional audio companies and AV systems integrators, with a dedicated division to service each sector.

The company continues to perform well in what was a tough year due to the economic climate in general and the specific pressures on some of our key markets and technology changes. The company has built relationships and secured exclusive UK distribution agreements with some of the world's leading manufacturers in key market sectors, such as education, hospitality, entertainment and the corporate sector. The equity of the company has grown year on year, although the pressures on pricing, rising costs and changes in the buying habits of key markets has put pressure on margins this year. Despite these factors the majority of earnings are being retained in the company to fund future growth and market expansion.

Due to the market conditions the management has focused on diversification into new market opportunities and acquired new product distribution agreements which will strengthen our position going forward. In line with this strategy the company has pursued a reduction in inventory which has increased our cash position and a reduction in overheads which will lead to increased profitability.

PRINCIPAL RISKS AND UNCERTAINTIES

The principle risks and uncertainties are those facing any business in the UK currently, primarily the Wars in Europe and the Middle East, uncertainty of the Brexit effects and the continuing impact of the Covid-19 pandemic. Although these are causing a general slowing in sales in the company's core markets the company has taken steps to minimise the impact as stated previously.

Large scale shortages of products supply in previous years have been exchanged to a general oversupply in products leading to a more competitive market and putting pressure on margins. This combined with budget restrictions in both consumer and public sectors have led to a tougher year, as a result the Directors have instigated new policies to improve profitability and reduce risks, these include a reduction in low margin consumer based products, an increase in technology based solutions and diversification into new markers

All such risks and uncertainties have been addressed by the directors.

Financial risk management objectives and policies

The directors continue to monitor the company's needs and objectives to ensure sufficient finance is in place. The addition of new suppliers and diversifying into products with Saas based revenue which will assist to offset losses in our more traditional market areas.

The reduction in slow moving and EOL products from our inventory will impact profitability, but assist our liquidity and lower costs. The company has a strong liquid position, which will be maintained to enable investment into new product areas and markets. Inventory reduction and lowering of overheads will lead to improved profitability.

Price risk, credit risk, liquidity risk and cashflow risk

Forward foreign currency contracts are entered into to mitigate against potential foreign exchange rate losses.

Future Outlook.

The company's strength has always been in its "value add" approach to distribution and the ability to supply and support technical products in many of the growing markets for unified communications and security related products for education, government and entertainment markets where its core products form the corner stones of audio and video connectivity.

DEVELOPMENT AND PERFORMANCE OF THE BUSINESS

Key performance indicators

2024

2023

2022

2021

Turnover

10,391,934

10,848,513

12,400,905

13,461,100

Turnover movement

(4.21%

(12.52%

(7.88%

(2.44%

Gross profit %

24.68%

26.62%

29.17%

21.55%

Gross profit % movement

(7.29%

(8.74%

35.36%

4.11%

Position of the business

At the end of the year, the net assets totalled £7,099,991 (2023 - £7,089,094).

ON BEHALF OF THE BOARD:

J N Midgley - Director

3 October 2025

The director presents his report with the financial statements of the company for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of professional audio and video products on a B2B basis.

DIVIDENDS

An interim dividend of £20,500 per share was paid on 15 April 2024. A further interim dividend of £79,500 per share was paid on 30 September 2024. The director recommends that no final dividend be paid.

The total distribution of dividends for the year ended 31 December 2024 will be £100,000.

DIRECTORS

J N Midgley has held office during the whole of the period from 1 January 2024 to the date of this report.

Other changes in directors holding office are as follows:

T S Riley ceased to be a director after 31 December 2024 but prior to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

J N Midgley - Director

3 October 2025

Opinion

We have audited the financial statements of Polar Audio Limited (the 'company') for the year ended 31 December 2024 which comprise the Profit and Loss Account, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Director.

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

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page five, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

-

the company's internal controls have been discussed with management and understood prior to our audit testing. Internal controls have been tested through walkthrough testing, to assess whether controls are adequate, whether they are being followed, and whether irregularities and fraud are prevented.

-

deficiencies in internal controls have been highlighted and explained to management, along with recommendations as to how deficiencies can be improved and the risk of irregularity and fraud occurrence minimised.

-

representations have been provided by management that there were no identified cases of fraud or instances of non-compliance during or since the accounting period.

-

substantive testing has been carried out to test the validity of transactions, with entries in the accounting system vouched to corresponding third party documentation and evidence of appropriate authorisation.

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 Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Melanie Richardson, BA(Hons) FCA (Senior Statutory Auditor)

for and on behalf of Swindells LLP

Chartered Accountants

and Statutory Auditor

Atlantic House

8 Bell Lane

Bellbrook Industrial Estate

Uckfield

East Sussex

TN22 1QL

3 October 2025

TURNOVER

3

10,391,934

10,848,513

Cost of sales

7,827,554

7,960,956

GROSS PROFIT

2,564,380

2,887,557

Administrative expenses

2,520,020

2,443,505

44,360

444,052

Other operating income

50,309

-

OPERATING PROFIT

5

94,669

444,052

Interest receivable and similar income

49,894

31,658

PROFIT BEFORE TAXATION

144,563

475,710

Tax on profit

7

33,666

116,534

PROFIT FOR THE FINANCIAL YEAR

110,897

359,176

PROFIT FOR THE YEAR

110,897

359,176

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

110,897

359,176

FIXED ASSETS

Tangible assets

9

52,043

41,186

CURRENT ASSETS

Stocks

10

4,799,733

5,509,279

Debtors

11

1,302,517

1,202,238

Cash at bank and in hand

3,195,133

2,747,199

9,297,383

9,458,716

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

12

2,249,435

2,410,808

NET CURRENT ASSETS

7,047,948

7,047,908

TOTAL ASSETS LESS CURRENT LIABILITIES

7,099,991

7,089,094

CAPITAL AND RESERVES

Called up share capital

15

100

100

Retained earnings

16

7,099,891

7,088,994

SHAREHOLDERS' FUNDS

7,099,991

7,089,094

The financial statements were approved by the director and authorised for issue on 3 October 2025 and were signed by:

J N Midgley - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

6,729,818

6,729,918

Changes in equity

Total comprehensive income

-

359,176

359,176

Balance at 31 December 2023

100

7,088,994

7,089,094

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

110,897

110,897

Balance at 31 December 2024

100

7,099,891

7,099,991

Cash flows from operating activities

Cash generated from operations

1

561,578

296,713

Tax paid

(118,578

)

(217,489

)

Net cash from operating activities

443,000

79,224

Cash flows from investing activities

Purchase of tangible fixed assets

(32,435

)

(36

)

Interest received

49,894

31,658

Net cash from investing activities

17,459

31,622

Cash flows from financing activities

Amount introduced by directors

200,000

-

Amount withdrawn by directors

(120,328

)

(100,260

)

Equity dividends paid

(100,000

)

-

Net cash from financing activities

(20,328

)

(100,260

)

Increase in cash and cash equivalents

440,131

10,586

Cash and cash equivalents at beginning of year

2

2,747,199

2,736,613

Cash and cash equivalents at end of year

2

3,187,330

2,747,199

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

Profit before taxation

144,563

475,710

Depreciation charges

21,578

16,298

Finance income

(49,894

)

(31,658

)

116,247

460,350

Decrease in stocks

709,546

123,280

(Increase)/decrease in trade and other debtors

(179,951

)

15,024

Decrease in trade and other creditors

(84,264

)

(301,941

)

Cash generated from operations

561,578

296,713

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

3,195,133

2,747,199

Bank overdrafts

(7,803

)

-

3,187,330

2,747,199

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

2,747,199

2,736,613

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank and in hand

2,747,199

447,934

3,195,133

Bank overdrafts

-

(7,803

)

(7,803

)

2,747,199

440,131

3,187,330

Total

2,747,199

440,131

3,187,330

1.	STATUTORY INFORMATION

Polar Audio Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with the parent of the group.

Significant judgements and estimates

Stock provision

Stocks are valued at the lower of cost and net realisable value. Net realisable value includes where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made which include forecasts of consumer demand and the promotional, competitive and economic environment.

Turnover

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

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Short leasehold

-

10% on cost

Plant and machinery

-

25% on cost

Fixtures and fittings

-

25% on cost

Motor vehicles

-

25% on reducing balance

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

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

Hire purchase and leasing commitments

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

Pension costs and other post-retirement benefits

The company contributes to a defined contribution pension scheme on behalf of directors and staff. Contributions payable to the scheme are charged to profit or loss in the period to which they relate.

Forward contracts

Forward contracts are initially measured at fair value on the contract date. Subsequent changes in fair value are recognised in profit or loss at each reporting date.

3.

TURNOVER

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

An analysis of turnover by geographical market is given below:

2024

2023

£

£

United Kingdom

10,178,372

10,602,153

Europe

176,505

246,020

United States of America

37,057

340

10,391,934

10,848,513

4.	EMPLOYEES AND DIRECTORS

2024

2023

£

£

Wages and salaries

1,407,903

1,348,145

Social security costs

147,540

140,954

Other pension costs

91,836

96,782

1,647,279

1,585,881

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

2024

2023

Sales/admin

29

28

Directors

2

2

31

30

2024

2023

£

£

Directors' remuneration

225,000

198,416

Directors' pension contributions to money purchase schemes

75,500

74,500

Information regarding the highest paid director for the year ended 31 December 2024 is as follows:

2024

£

Emoluments etc

120,000

Pension contributions to money purchase schemes

55,000

5.	OPERATING PROFIT

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

2024

2023

£

£

Other operating leases

181,000

181,000

Depreciation - owned assets

21,578

16,298

Foreign exchange

(265,015

)

17,258

6.	AUDITORS' REMUNERATION

2024

2023

£

£

Fees payable to the company's auditors for the audit of the company's financial statements

13,150

15,900

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2024

2023

£

£

Current tax:

UK corporation tax

33,666

118,578

(Over)/under provision in previous year

-

(2,044

)

Tax on profit

33,666

116,534

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2024

2023

£

£

Profit before tax

144,563

475,710

Profit multiplied by the standard rate of corporation tax in the UK of 25% (2023 - 25%)

36,141

118,928

Effects of:

Expenses not deductible for tax purposes

5,080

6,666

Capital allowances in excess of depreciation

(5,923

)

-

Depreciation in excess of capital allowances

-

443

Adjustments to tax charge in respect of previous periods

-

(2,044

)

Effect of change in standard rate of corporation tax

(1,632

)

(7,459

)

Total tax charge

33,666

116,534

8.

DIVIDENDS

2024

2023

£

£

Ordinary shares of £1 each

Interim

100,000

-

9.	TANGIBLE FIXED ASSETS

Fixtures

Short

Plant and

and

Motor

leasehold

machinery

fittings

vehicles

Totals

£

£

£

£

£

COST

At 1 January 2024

20,891

202,586

258,791

217,024

699,292

Additions

-

27,862

4,573

-

32,435

At 31 December 2024

20,891

230,448

263,364

217,024

731,727

DEPRECIATION

At 1 January 2024

18,802

199,579

256,639

183,086

658,106

Charge for year

2,089

8,469

2,536

8,484

21,578

At 31 December 2024

20,891

208,048

259,175

191,570

679,684

NET BOOK VALUE

At 31 December 2024

-

22,400

4,189

25,454

52,043

At 31 December 2023

2,089

3,007

2,152

33,938

41,186

10.

STOCKS

2024

2023

£

£

Stocks

4,799,733

5,509,279

11.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2024

2023

£

£

Trade debtors

1,270,932

1,099,849

Provision for bad debts

(4,738

)

(15,829

)

Other debtors

(4,564

)

(4,564

)

Directors' current accounts

20,762

100,434

Prepayments and accrued income

20,125

22,348

1,302,517

1,202,238