REGISTERED NUMBER: 13460460 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2024

FOR

GAK TOPCO LTD

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Income Statement

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Notes to the Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

19

DIRECTORS:

J R Jenkins

L O Johnson

REGISTERED OFFICE:

31 North Row

London

W1K 6DA

REGISTERED NUMBER:

13460460 (England and Wales)

AUDITORS:

Watson Associates (Audit Services) Ltd

Statutory Auditor

30 - 34 North Street

Hailsham

East Sussex

BN27 1DW

The directors present their strategic report of the company and the group for the year ended 30 September 2024.

REVIEW OF BUSINESS

GAK Topco Ltd is a holding company for investments in The Mad About Music group and the GAK group of companies, which together focus on the European Musical Instrument (MI) market.

The Mad About Music group is a vendor of affordable but high-quality musical instruments and accessories, trading to consumers under the Tiger, World Rhythm, Theodore and Mad About Music brands, and supporting the development of GAK's own-brand strategy.

The GAK group was a leading omni-channel retailer of new and second-hand musical instruments, offering a wide range of products to consumers through its e-commerce store, from its destination store in central Brighton, through online marketplaces such as eBay, and supplying directly to schools and universities.

Revenue for the period amounted to £23,650,282, with a gross margin of 18.6%. Sales fell by 21.4%, and gross margin fell by 1.03%, driven by a significant number of challenges within the GAK group, including:

- pressure on consumer spending due to the cost of living crisis leading to declining demand;

- high levels of online advertising competition leading to increasing acquisition costs; and

- intense retail competition and oversupply of stock in the market leading to downward pressure on margins.

Administrative expenses totalled £8,170,836, which this included £629,502 of non-cash expenses of fixed asset depreciation and amortisation of goodwill and website development. The company holds £12,455,670 of loan notes which are due to the group's beneficial owner, and upon which interest charges of £1,143,727 arose; however loan note interest is accrued only and therefore does not affect operating cash.

The Mad About Music group continues to trade profitably, with a continued focus on offering high-quality affordable products. Management are confident in the opportunities for further growth through both product and geographic expansion over coming years.

The GAK group has faced challenging retail headwinds for several years, and despite management's best efforts to navigate these challenges, the Directors were unable to return the GAK group to profitability and were forced to appoint FRP Advisory as administrators in April 2025. As such the value of the investment in the GAK group has been written-down in full.

KEY PERFORMANCE INDICATORS

The group manages its businesses by reference to key performance indicators. Competent management

reporting tools are in place to provide essential current, timely reporting in a clear and precise manner.

Principal indicators used by the group and as analysed above include, but are not limited to:

(1) Turnover

(2) Gross margin

(3) Operating profit

PRINCIPAL RISKS AND UNCERTAINTIES

The group is exposed to a variety of risks including economic risks, financial risks, credit risks, foreign exchange risks and competitive risks. The group has in-place policies and procedures that seek to limit the potentially adverse effects on the financial performance of the group of such risks. These policies are set by the directors.

The group does not use derivative financial instruments to manage interest rate risks.

Economic Risks

The group ultimately supplies its products to consumers and is therefore exposed to trends and movements in consumer spending habits and the resilience of the wider economy. The group's principal risk is that a downturn in the economy could affect consumer spending and therefore impact sales. The group manages these risks by providing competitively priced products across a broad range, supported by excellent customer service.

Financial Risks

The group actively manages its liquidity and works with key suppliers to ensure sufficient stock is available to meet anticipated sales. The group has a small exposure to foreign currency risk.

Credit Risks

The vast majority of the group's sales are not made on credit; however any credit sales to institutions are subject to appropriate credit checks made before the sale is made, and individual customers are subject to a credit limit against which new orders are actively monitored.

Foreign Exchange Risks

The group has some exposure to foreign currency risk, buying stock in USD and selling in GBP. The group does not currently use forward exchange contracts to mitigate this risk.

Competitive Risks

The group operates in a highly competitive market and increased competition could adversely impact gross margin and marketing costs. The Directors continue to observe overseas competition in the UK market after a temporary hiatus post-Brexit.

ON BEHALF OF THE BOARD:

J R Jenkins - Director

30 September 2025

The directors present their report with the financial statements of the company and the group for the year ended 30 September 2024.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of retail and internet retail sale of musical equipment.

DIVIDENDS

No dividends will be distributed for the year ended 30 September 2024.

EVENTS AFTER THE REPORTING PERIOD

On 11 April 2025, three subsidiaries of the group, [GAK.CO.UK (Holdings) LTD, GAK.CO.UK LTD, The Guitar, Amp & Keyboard Centre Limited], entered administration and ceased trading. The administration followed the withdrawal of shareholder support which had previously supported the companies.

The directors have considered the impact of this event on the financial statements for the year ended 30 September 2024. As the businesses were trading at the reporting date with continued financial support, the administration is treated as a non-adjusting event in accordance with FRS 102 Section 32. No adjustments have therefore been made to the carrying values of assets or liabilities at 30 September 2024.

The administration has resulted in the impairment of goodwill relating to these subsidiaries at the reporting date (see Note 9). The directors consider that trade receivables, inventories and trade payables were appropriately valued as at 30 September 2024, but acknowledge that the group’s structure and future operations will be significantly affected by the administrations.

DIRECTORS

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

J R Jenkins

L O Johnson

Other changes in directors holding office are as follows:

M Rickard , I P Stephens and M McKellar ceased to be directors after 30 September 2024 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

The auditors, Watson Associates (Audit Services) Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J R Jenkins - Director

30 September 2025

Opinion

We have audited the financial statements of Gak Topco Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 30 September 2024 and of the group's loss 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 group 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. Our evaluation of the directors' assessment of the group's and the parent company's ability to continue to adopt the going concern basis of accounting included is that there is a material uncertainty related to going concern.

We draw attention to Note 2 - Going Concern - to the financial statements, which indicates that the group is reliant on the continued financial support of its shareholders. The withdrawal of support for certain subsidiaries led to their administration in April 2025. These events, along with other matters described in Note 2, indicate the existence of a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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 the 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.

Emphasis of matter - Events after the reporting period

We draw attention to Note 2 and 9 to the financial statements, which describes the administration of GAK.CO.UK (Holdings) Limited, GAK.CO.UK Limited and The Guitar, Amp & Keyboard Centre Limited in April 2025. Our opinion is not modified in respect of this matter.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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

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

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 Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and 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 group or the parent company or to cease operations, or have 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.

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

Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to employment laws and we considered the extent to which non-compliance might have a material effect on the financial statements.

We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to achieve desired financial results and the manipulation of exceptional items and management bias in accounting estimates.

Audit procedures performed by the engagement team included:

- enquiries with management, including consideration of known or suspected instances of fraud and non-compliance with laws and regulations and examining supporting calculations where a provision has been made in respect of these;

- reading key correspondence with regulatory authorities in relation to compliance with certain employment laws;

- understanding and evaluating the design and implementation of management's controls designed to prevent and detect irregularities;

- challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to impairment of investments in subsidiaries and the measurement and classification of exceptional items;

- identifying and testing journal entries, in particular any journal entries posted with unusual account combinations and postings by unusual users.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

Stephen James Moore (Senior Statutory Auditor)

for and on behalf of Watson Associates (Audit Services) Ltd

Statutory Auditor

30 - 34 North Street

Hailsham

East Sussex

BN27 1DW

30 September 2025

TURNOVER

23,650,282

30,097,843

Cost of sales

(19,260,234

)

(24,202,056

)

GROSS PROFIT

4,390,048

5,895,787

Administrative expenses

(8,170,836

)

(6,114,787

)

(3,780,788

)

(219,000

)

Other operating income

23,927

15,182

OPERATING LOSS

4

(3,756,861

)

(203,818

)

Interest receivable and similar income

3,884

1,442

(3,752,977

)

(202,376

)

Gain/loss on revaluation of intangible assets

-

(1,546,000

)

(3,752,977

)

(1,748,376

)

Interest payable and similar expenses

6

(1,208,578

)

(1,093,011

)

LOSS BEFORE TAXATION

(4,961,555

)

(2,841,387

)

Tax on loss

7

7,667

1,658

LOSS FOR THE FINANCIAL YEAR

(4,953,888

)

(2,839,729

)

Loss attributable to:

Owners of the parent

(4,940,485

)

(2,986,216

)

Non-controlling interests

(13,403

)

146,487

(4,953,888

)

(2,839,729

)

LOSS FOR THE YEAR

(4,953,888

)

(2,839,729

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(4,953,888

)

(2,839,729

)

Total comprehensive loss attributable to:

Owners of the parent

(4,953,888

)

(2,839,729

)

FIXED ASSETS

Intangible assets

9

1,415,210

4,277,953

Tangible assets

10

91,715

63,361

Investments

11

-

-

1,506,925

4,341,314

CURRENT ASSETS

Stocks

12

4,282,639

5,086,518

Debtors

13

1,655,723

2,139,174

Cash at bank and in hand

189,585

273,219

6,127,947

7,498,911

CREDITORS

Amounts falling due within one year

14

(4,597,595

)

(4,833,665

)

NET CURRENT ASSETS

1,530,352

2,665,246

TOTAL ASSETS LESS CURRENT LIABILITIES

3,037,277

7,006,560

CREDITORS

Amounts falling due after more than one year

15

(12,661,589

)

(11,422,669

)

PROVISIONS FOR LIABILITIES

18

(249,450

)

(479,065

)

NET LIABILITIES

(9,873,762

)

(4,895,174

)

CAPITAL AND RESERVES

Called up share capital

19

85,140

85,140

Retained earnings

20

(10,245,426

)

(5,304,941

)

SHAREHOLDERS' FUNDS

(10,160,286

)

(5,219,801

)

NON-CONTROLLING INTERESTS

21

286,524

324,627

TOTAL EQUITY

(9,873,762

)

(4,895,174

)

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

J R Jenkins - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

1,485,131

8,901,886

1,485,131

8,901,886

CURRENT ASSETS

Debtors

13

13,179

375,055

Cash at bank

76,750

52,852

89,929

427,907

CREDITORS

Amounts falling due within one year

14

(210,515

)

(1,055,391

)

NET CURRENT LIABILITIES

(120,586

)

(627,484

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,364,545

8,274,402

CREDITORS

Amounts falling due after more than one year

15

(12,455,670

)

(11,011,943

)

PROVISIONS FOR LIABILITIES

18

(230,000

)

(460,000

)

NET LIABILITIES

(11,321,125

)

(3,197,541

)

CAPITAL AND RESERVES

Called up share capital

19

85,140

85,140

Retained earnings

20

(11,406,265

)

(3,282,681

)

SHAREHOLDERS' FUNDS

(11,321,125

)

(3,197,541

)

Company's loss for the financial year

(8,123,584

)

(2,395,329

)

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

J R Jenkins - Director

Called up

share

Retained

Non-controlling

Total

capital

earnings

Total

interests

equity

£

£

£

£

£

Balance at 1 October 2022

85,140

(2,318,725

)

(2,233,585

)

-

(2,233,585

)

Changes in equity

Dividends

-

-

-

(30,020

)

(30,020

)

Total comprehensive loss

-

(2,986,216

)

(2,986,216

)

-

(2,986,216

)

85,140

(5,304,941

)

(5,219,801

)

(30,020

)

(5,249,821

)

Acquisition of non-controlling interest

-

-

-

208,160

208,160

Non-controlling interest arising on business combination

-

-

-

146,487

146,487

Balance at 30 September 2023

85,140

(5,304,941

)

(5,219,801

)

324,627

(4,895,174

)

Changes in equity

Dividends

-

-

-

(24,700

)

(24,700

)

Total comprehensive loss

-

(4,940,485

)

(4,940,485

)

-

(4,940,485

)

85,140

(10,245,426

)

(10,160,286

)

299,927

(9,860,359

)

Acquisition of non-controlling interest

-

-

-

324,627

324,627

Non-controlling interest arising on business combination

-

-

-

(13,403

)

(13,403

)

Balance at 30 September 2024

85,140

(10,245,426

)

(10,160,286

)

611,151

(9,549,135

)

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 October 2022

85,140

(887,352

)

(802,212

)

Changes in equity

Total comprehensive loss

-

(2,395,329

)

(2,395,329

)

Balance at 30 September 2023

85,140

(3,282,681

)

(3,197,541

)

Changes in equity

Total comprehensive loss

-

(8,123,584

)

(8,123,584

)

Balance at 30 September 2024

85,140

(11,406,265

)

(11,321,125

)

Cash flows from operating activities

Cash generated from operations

1

452,569

242,817

Interest paid

(30,530

)

(69,830

)

Tax paid

-

(66,401

)

Taxation refund

-

35,075

Net cash from operating activities

422,039

141,661

Cash flows from investing activities

Purchase of intangible fixed assets

(65,704

)

(271,395

)

Purchase of tangible fixed assets

(48,313

)

(3,920

)

Payment of deferred consideration

(230,000

)

-

Interest received

3,884

1,442

Net cash from investing activities

(340,133

)

(273,873

)

Cash flows from financing activities

New loans in year

150,000

-

Loan repayments in year

(362,824

)

(168,993

)

Amount withdrawn by directors

-

(5,000

)

Amounts introduced by shareholders

300,000

-

Dividends paid to minority interests

(24,700

)

(30,020

)

Net cash from financing activities

62,476

(204,013

)

Increase/(decrease) in cash and cash equivalents

144,382

(336,225

)

Cash and cash equivalents at beginning of year

2

(232,725

)

103,500

Cash and cash equivalents at end of year

2

(88,343

)

(232,725

)

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

2024

2023

£

£

Loss before taxation

(4,961,555

)

(2,841,387

)

Depreciation charges

629,501

696,802

Loss on revaluation of fixed assets

-

1,546,000

Impairment of Goodwill

2,318,904

-

Finance costs

1,208,578

1,093,011

Finance income

(3,884

)

(1,442

)

(808,456

)

492,984

Decrease in stocks

803,879

741,542

Decrease/(increase) in trade and other debtors

1,204,472

(511,919

)

Decrease in trade and other creditors

(747,326

)

(479,790

)

Cash generated from operations

452,569

242,817

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 30 September 2024

30.9.24

1.10.23

£

£

Cash and cash equivalents

189,585

273,219

Bank overdrafts

(277,928

)

(505,944

)

(88,343

)

(232,725

)

Year ended 30 September 2023

30.9.23

1.10.22

£

£

Cash and cash equivalents

273,219

584,344

Bank overdrafts

(505,944

)

(480,844

)

(232,725

)

103,500

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.10.23

Cash flow

At 30.9.24

£

£

£

Net cash

Cash at bank and in hand

273,219

(83,634

)

189,585

Bank overdrafts

(505,944

)

228,016

(277,928

)

(232,725

)

144,382

(88,343

)

Debt

Debts falling due within 1 year

(186,723

)

(26,304

)

(213,027

)

Debts falling due after 1 year

(11,422,669

)

(1,238,920

)

(12,661,589

)

(11,609,392

)

(1,265,224

)

(12,874,616

)

Total

(11,842,117

)

(1,120,842

)

(12,962,959

)