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REGISTERED NUMBER: 02357352 (England and Wales)

Strategic Report, Directors' Report and

Audited Financial Statements for the Year Ended 28 February 2025

for

Applied Acoustic Engineering Limited

Applied Acoustic Engineering Limited (Registered number: 02357352)

Contents of the Financial Statements

for the Year Ended 28 February 2025

Page |

Company Information | 1 |

Strategic Report | 2 |

Directors' Report | 3 |

Report of the Independent Auditors | 5 |

Statement of Income and Retained Earnings | 9 |

Balance Sheet | 10 |

Cash Flow Statement | 11 |

Notes to the Cash Flow Statement | 12 |

Notes to the Financial Statements | 13 |

Applied Acoustic Engineering Limited

Company Information

for the Year Ended 28 February 2025

| Directors: | Mrs T Darling

| Mr A P Darling

| Secretary: | Mrs T Darling

| Registered office: | Marine House

| Marine Park

| Gapton Hall Road

| Great Yarmouth

| Norfolk

| NR31 0NB

| Registered number: | 02357352 (England and Wales)

| Senior statutory auditor: | Mr Henry Pettitt FCA CTA

| Auditors: | Stephenson Smart (East Anglia) Limited

| Statutory Auditor

| East Coast House

| Galahad Road

| Gorleston

| Great Yarmouth

| Norfolk

| NR31 7RU

Applied Acoustic Engineering Limited (Registered number: 02357352)

Strategic Report

for the Year Ended 28 February 2025

The directors present their strategic report for the year ended 28 February 2025.

This report considers the development and performance of Applied Acoustic Engineering Limited (AAE) for the year ended 28 February 2025. AAE is a manufacturer and supplier of subsea products and equipment to the marine, defence, oil and gas and renewable energy sectors. It operates from Great Yarmouth in the UK and supplies to a global customer base.

Review of business

The year ended 28 February 2025 has met expectations with turnover of £7.2m (2024 - £5.8m), an increase of 24% on the prior year. Gross margins increased in line with management's expectations for the period to 51% (2024 - 46%). Pre-tax profits increased to £1,111k in the year (2024 - £273k) an improvement of 307% compared to the prior year. The cash generated from operations was £925k (2024 - -£273k).

Sales in all product areas were satisfactory, with some areas experiencing significant growth.

Key performance indicators are used for monitoring and review purposes. KPIs used are sales turnover, gross margins, pre-tax profit, and cash generation.

Principal risks and uncertainties

Like most businesses in the sector, AAE is exposed to geopolitical instability and global financial uncertainty. Historically, this has had an impact on supply chains as well as customer budgets and confidence. Political decisions regarding energy transition are a source of risk but also provide opportunities for diversification and expansion. The ongoing inflationary pressures continue to impact all businesses within this sector.

AAE manages its liquidity risk by actively monitoring its short-term and long-term working capital requirements on a regular basis and ensuring access to funding is satisfactory.

The impact of wage inflation and the availability of candidates in the job market remains a risk.

The continued threats of cyberattacks experienced by all businesses with the advances in technological intrusions and increasing reliance on software are frequently considered by management.

Future outlook

The future outlook is positive, with continued sales growth expected to both new and existing customers. New product development is underway which provides optimism and further opportunities for growth in the coming year.

The company is well recognised within its sector and continues to capitalise on innovative projects and returning customers. The balance sheet shows a strong financial position with continued growth expected by management over the next twelve months.

On behalf of the board:

Mr A P Darling - Director

14 November 2025

Applied Acoustic Engineering Limited (Registered number: 02357352)

Directors' Report

for the Year Ended 28 February 2025

The directors present their report with the financial statements of the company for the year ended 28 February 2025.

Dividends

No dividends will be distributed for the year ended 28 February 2025.

Directors

The directors shown below have held office during the whole of the period from 1 March 2024 to the date of this report.

Mrs T Darling

Mr A P Darling

Statement of directors' responsibilities

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

- | select suitable accounting policies and then apply them consistently;

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

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

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

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 company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Applied Acoustic Engineering Limited (Registered number: 02357352)

Directors' Report

for the Year Ended 28 February 2025

Auditors

The auditors, Stephenson Smart (East Anglia) Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

Mr A P Darling - Director

14 November 2025

Report of the Independent Auditors to the Members of

Applied Acoustic Engineering Limited

Unqualified Opinion

We have audited the financial statements of Applied Acoustic Engineering Limited (the 'company') for the year ended 28 February 2025 which comprise the Statement of Income and Retained Earnings, Balance Sheet, 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 28 February 2025 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 unqualified 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, 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.

Report of the Independent Auditors to the Members of

Applied Acoustic Engineering Limited

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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

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

We have nothing to report in respect of the following matters 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 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 three, 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Report of the Independent Auditors to the Members of

Applied Acoustic Engineering Limited

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:

We considered, based on our knowledge of the trading environment and structure of the company, areas in which the threat of material misstatement exists concerning irregularity. Irregularities, including fraud, were considered at length throughout our audit fieldwork and as part of our communications both with the directors and within the audit team.

We have reviewed the company's policies in adhering to laws and regulations, health and safety, and GDPR, and have identified where non-compliance could materially affect the financial statements, and the extent to which irregularities could impact the financial statements vary considerably throughout.

The company is subject to regulation that directly affects the financial statements, in areas such as taxation and company laws, which has been assessed during the course of the audit when auditing the related financial items. For example, the export risk of trading within international borders and being subject to local taxes and local compliance has been considered when auditing related financial areas.

The company is also subject to regulations that, in instances of non-compliance, would have a material impact on balances or disclosures within the financial statements, such as fines, penalties, claims and interest.

The limited procedures required to be undertaken as contained within the auditing standards did not identify any areas of non-compliance.

Owing to inherent limitations of an audit, there is an unavoidable risk that we may not have detected all material misstatements within the financial statements. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

Report of the Independent Auditors to the Members of

Applied Acoustic Engineering Limited

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.

Mr Henry Pettitt FCA CTA Senior Statutory Auditor

for and on behalf of Stephenson Smart (East Anglia) Limited

Statutory Auditor

East Coast House

Galahad Road

Gorleston

Great Yarmouth

Norfolk

NR31 7RU

14 November 2025

Stephenson Smart (East Anglia) Limited

Applied Acoustic Engineering Limited (Registered number: 02357352)

Statement of Income and Retained Earnings

for the Year Ended 28 February 2025

2025 | 2024 |

| Notes | £ | £

Turnover | 4 | 7,285,070 |  | 5,847,053 |  |

Cost of sales | (3,558,064 | ) | (3,139,415 | ) |

Gross profit | 3,727,006 |  | 2,707,638 |  |

Distribution costs | (89,267 | ) | (65,720 | ) |

Administrative expenses | (2,537,107 | ) | (2,379,054 | ) |

1,100,632 |  | 262,864 |  |

Other operating income | 5,830 |  | 5,480 |  |

Operating profit | 6 | 1,106,462 |  | 268,344 |  |

Interest receivable and similar income | 4,453 |  | 4,471 |  |

1,110,915 |  | 272,815 |  |

Interest payable and similar expenses | 8 | (48 | ) | - |  |

Profit before taxation | 1,110,867 |  | 272,815 |  |

Tax on profit | 9 | (278,338 | ) | (48,144 | ) |

Profit for the financial year | 832,529 |  | 224,671 |  |

Retained earnings at beginning of year | 1,948,041 |  | 1,723,370 |  |

Retained earnings at end of year | 2,780,570 |  | 1,948,041 |  |

Applied Acoustic Engineering Limited (Registered number: 02357352)

Balance Sheet

28 February 2025

2025 | 2024 |

| Notes | £ | £

Fixed assets

Intangible assets | 10 | 31,058 |  | 33,041 |  |

Tangible assets | 11 | 261,790 |  | 145,486 |  |

Investments | 12 | 16,207 |  | 16,207 |  |

309,055 |  | 194,734 |  |

Current assets

Stocks | 13 | 3,814,913 |  | 3,491,651 |  |

Debtors | 14 | 1,817,271 |  | 1,657,545 |  |

Cash at bank and in hand | 122,156 |  | 224,709 |  |

5,754,340 |  | 5,373,905 |  |

Creditors

Amounts falling due within one year | 15 | (3,129,015 | ) | (3,512,724 | ) |

Net current assets | 2,625,325 |  | 1,861,181 |  |

Total assets less current liabilities | 2,934,380 |  | 2,055,915 |  |

Creditors

Amounts falling due after more than one year | 16 | (59,988 | ) | (61,868 | ) |

Provisions for liabilities | 18 | (93,722 | ) | (45,906 | ) |

Net assets | 2,780,670 |  | 1,948,141 |  |

Capital and reserves

Called up share capital | 19 | 100 |  | 100 |  |

Retained earnings | 20 | 2,780,570 |  | 1,948,041 |  |

Shareholders' funds | 2,780,670 |  | 1,948,141 |  |

The financial statements were approved by the Board of Directors and authorised for issue on 14 November 2025 and were signed on its behalf by:

Mr A P Darling - Director

Applied Acoustic Engineering Limited (Registered number: 02357352)

Cash Flow Statement

for the Year Ended 28 February 2025

2025 | 2024 |

| Notes | £ | £

Cash flows from operating activities

Cash generated from operations | 1 | 949,938 |  | (257,964 | ) |

Interest paid | (48 | ) | - |  |

Tax paid | (25,159 | ) | (15,357 | ) |

Net cash from operating activities | 924,731 |  | (273,321 | ) |

Cash flows from investing activities

Purchase of tangible fixed assets | (209,555 | ) | (77,304 | ) |

Interest received | 4,453 |  | 4,471 |  |

Net cash from investing activities | (205,102 | ) | (72,833 | ) |

Cash flows from financing activities

Loans to group companies | (822,182 | ) | 479,329 |  |

Amount introduced by directors | - |  | 28 |  |

Net cash from financing activities | (822,182 | ) | 479,357 |  |

(Decrease)/increase in cash and cash equivalents | (102,553 | ) | 133,203 |  |

Cash and cash equivalents at beginning of year | 2 | 224,709 |  | 91,506 |  |

Cash and cash equivalents at end of year | 2 | 122,156 |  | 224,709 |  |

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Cash Flow Statement

for the Year Ended 28 February 2025

1. | Reconciliation of profit before taxation to cash generated from operations

2025 | 2024 |

| £ | £

| Profit before taxation | 1,110,867 |  | 272,815 |  |

| Depreciation charges | 87,297 |  | 66,689 |  |

| Loss on disposal of fixed assets | 5,953 |  | 145 |  |

| Amortisation | 1,983 |  | 1,983 |  |

| Government grants | (1,880 | ) | (1,880 | ) |

| Finance costs | 48 |  | - |  |

| Finance income | (4,453 | ) | (4,471 | ) |

1,199,815 |  | 335,281 |  |

| Increase in stocks | (323,262 | ) | (149,116 | ) |

| Increase in trade and other debtors | (175,983 | ) | (147,475 | ) |

| Increase/(decrease) in trade and other creditors | 249,368 |  | (296,654 | ) |

| Cash generated from operations | 949,938 |  | (257,964 | ) |

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 28 February 2025

| 28.2.25 |  | 1.3.24

| £ | £

| Cash and cash equivalents | 122,156 |  | 224,709 |  |

| Year ended 29 February 2024

| 29.2.24 |  | 1.3.23

| £ | £

| Cash and cash equivalents | 224,709 |  | 91,506 |  |

3. | Analysis of changes in net funds

| At 1.3.24 | Cash flow | At 28.2.25

| £ | £ | £

| Net cash |

| Cash at bank and in hand | 224,709 |  | (102,553 | ) | 122,156 |  |

224,709 |  | (102,553 | ) | 122,156 |  |

| Total | 224,709 |  | (102,553 | ) | 122,156 |  |

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements

for the Year Ended 28 February 2025

1. | Statutory information

| Applied Acoustic Engineering 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. | Statement of compliance

| 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.

3. | Accounting policies

| Basis of preparing the financial statements

| The financial statements have been prepared under the historical cost convention.

| Critical accounting judgements and key sources of estimation uncertainty

| The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

| Key estimation and judgements are utilised for the following:

| - Deferred tax where management form expectations of future tax rates based on the review of legislation and political changes. Values of tax sensitive items are reviewed and considered together with enhanced tax reliefs obtained.

| - Depreciation is reviewed by management using the useful economic life of assets stated within the financial statements and comparative sources of information to assess the carrying value stated at the balance sheet date.

| - Warranty provisions are reviewed by management using the historic warranty claims information to determine the likelihood and the present cost of fulfilling the warranty claims.

| - Useful economic life of intangible fixed assets uses managements knowledge of the future inflows expected by the intangible assets and comparative sources of information to assess the useful economic life of intangible assets included within the financial statements.

| Turnover

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

| The company provides design and development of a wide range of subsea navigation, positioning and survey products, both in the United Kingdom and worldwide. Turnover is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on dispatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements - continued

for the Year Ended 28 February 2025

3. | Accounting policies - continued

| Intangible assets

| Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

| Website is being amortised evenly over its estimated useful life of twenty years.

| Intangible assets are reviewed annually at the balance sheet date by management for impairment.

| Tangible fixed assets

| Tangible fixed assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.

| Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

| Property improvements - 20% on cost

| Plant and machinery - 25% on cost

| Motor vehicles - 25% on cost

| Government grants

| Government grants are recognised at fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received.

| Government grants are recognised using the accrual model.

| Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company registered the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period it becomes receivable.

| Grants related to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of the grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.

| Stocks

| Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Net realisable value is calculated at the lower of cost or selling price less cost to complete.

| Work in progress included within stock is valued at the lower of cost and net realisable value, calculated based on actual costs to date.

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements - continued

for the Year Ended 28 February 2025

3. | Accounting policies - continued

| Financial instruments

| A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

| Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

| Debt instruments are subsequently measured at amortised cost.

| Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

| For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.

| Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised. 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 entity after deducting all of its financial liabilities.

| Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

| Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

| Taxation

| Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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.

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements - continued

for the Year Ended 28 February 2025

3. | Accounting policies - continued

| 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.

| Pension costs and other post-retirement benefits

| The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

| Cash and cash equivalents

| Cash and cash equivalents in the accounts comprises of cash at bank and in hand converted to the presentational currency at the balance sheet date.

| Exceptional items

| Exceptional items are presented on the judgement of management, with the consideration of whether they constitute a material item by value or nature. They are disclosed in the notes to the financial statements to provide clarity and transparency of the financial performance of the entity.

4. | Turnover

| The turnover and profit before taxation are attributable to the principal activities of the company.

| An analysis of turnover by geographical market is given below:

2025 | 2024 |

| £ | £

| United Kingdom | 1,846,642 |  | 2,339,724 |  |

| Rest of Europe | 3,076,319 |  | 1,388,121 |  |

| Rest of World | 2,362,109 |  | 2,119,208 |  |

7,285,070 |  | 5,847,053 |  |

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements - continued

for the Year Ended 28 February 2025

5. | Employees and directors

2025 | 2024 |

| £ | £

| Wages and salaries | 2,012,624 |  | 1,806,629 |  |

| Social security costs | 186,385 |  | 172,844 |  |

| Other pension costs | 242,405 |  | 233,722 |  |

2,441,414 |  | 2,213,195 |  |

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

2025 | 2024 |

| Production | 24 |  | 25 |  |

| Administration | 29 |  | 28 |  |

| Directors | 2 |  | 2 |  |

55 |  | 55 |  |

2025 | 2024 |

| £ | £

| Directors' remuneration | 24,000 |  | 24,000 |  |

| Directors' pension contributions |  | 20,000 |  |  | 20,000 |  |

| During the year, a total of key management personnel compensation of £226,670 (2024 - £208,055) was paid.

6. | Operating profit

| The operating profit is stated after charging:

2025 | 2024 |

| £ | £

| Other operating leases | 121,517 |  | 101,000 |  |

| Depreciation - owned assets | 87,298 |  | 66,689 |  |

| Loss on disposal of fixed assets | 5,953 |  | 145 |  |

| Website amortisation | 1,983 |  | 1,983 |  |

| Foreign exchange differences | 4,533 |  | 1,747 |  |

| Exceptional items of roof repairs for £111,878 are included within operating profit for 2024.

7. | Auditors' remuneration

2025 | 2024 |

| £ | £

| Fees payable to the company's auditors for the audit of the company's financial statements | 13,450 |  | 11,500 |  |

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements - continued

for the Year Ended 28 February 2025

8. | Interest payable and similar expenses |

2025 | 2024 |

| £ | £

| HMRC corporation tax interest | 48 |  | - |  |

9. | Taxation

| Analysis of the tax charge

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

2025 | 2024 |

| £ | £

| Current tax:

| UK corporation tax | 230,697 |  | 849 |  |

| Deferred tax | 47,641 |  | 47,295 |  |

| Tax on profit | 278,338 |  | 48,144 |  |

| Reconciliation of total tax charge included in profit and loss

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

2025 | 2024 |

| £ | £

| Profit before tax | 1,110,867 |  | 272,815 |  |

| Profit multiplied by the standard rate of corporation tax in the UK of 25% (2024 - 19%) | 277,717 |  | 51,835 |  |

| Effects of:

| Expenses not deductible for tax purposes | 621 |  | 1,150 |  |

| Capital allowances in excess of depreciation | (29,344 | ) | (2,353 | ) |

| Utilisation of tax losses | (18,297 | ) | (33,709 | ) |

| Research and development enhanced deduction | - |  | (16,074 | ) |

| Deferred tax | 47,641 |  | 47,295 |  |

| Total tax charge | 278,338 |  | 48,144 |  |

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements - continued

for the Year Ended 28 February 2025

10. | Intangible fixed assets

Website |

| £

| Cost

| At 1 March 2024

| and 28 February 2025 | 39,659 |  |

| Amortisation

| At 1 March 2024 | 6,618 |  |

| Amortisation for year | 1,983 |  |

| At 28 February 2025 | 8,601 |  |

| Net book value

| At 28 February 2025 | 31,058 |  |

| At 29 February 2024 | 33,041 |  |

11. | Tangible fixed assets

Property | Plant and | Motor |

improvements | machinery | vehicles | Totals |

| £ | £ | £ | £

| Cost

| At 1 March 2024 | - |  | 688,646 |  | 57,841 |  | 746,487 |  |

| Additions | 150,386 |  | 34,091 |  | 25,078 |  | 209,555 |  |

| Disposals | - |  | (122,635 | ) | - |  | (122,635 | ) |

| At 28 February 2025 | 150,386 |  | 600,102 |  | 82,919 |  | 833,407 |  |

| Depreciation

| At 1 March 2024 | - |  | 571,660 |  | 29,341 |  | 601,001 |  |

| Charge for year | 22,524 |  | 55,774 |  | 9,000 |  | 87,298 |  |

| Eliminated on disposal | - |  | (116,682 | ) | - |  | (116,682 | ) |

| At 28 February 2025 | 22,524 |  | 510,752 |  | 38,341 |  | 571,617 |  |

| Net book value

| At 28 February 2025 | 127,862 |  | 89,350 |  | 44,578 |  | 261,790 |  |

| At 29 February 2024 | - |  | 116,986 |  | 28,500 |  | 145,486 |  |

12. | Fixed asset investments

| Investments (neither listed nor unlisted) were as follows:

2025 | 2024 |

| £ | £

| Other investments | 16,207 |  | 16,207 |  |

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements - continued

for the Year Ended 28 February 2025

12. | Fixed asset investments - continued

| Investments are recorded within the financial statements at cost and are subject to any revaluations at the discretion of the directors. Any revaluation gain or loss on the investments are recorded within the profit and loss account.

13. | Stocks

2025 | 2024 |

| £ | £

| Stocks | 3,814,913 |  | 3,491,651 |  |

| Included within stock is work in progress of £662,491 (2024 - £446,287)

14. | Debtors: amounts falling due within one year |

2025 | 2024 |

| £ | £

| Trade debtors | 828,948 |  | 1,053,398 |  |

| Amounts owed by group undertakings | 314,729 |  | 330,986 |  |

| Other debtors | - |  | 95,544 |  |

| VAT | 530,690 |  | 47,861 |  |

| Prepayments | 142,904 |  | 129,756 |  |

1,817,271 |  | 1,657,545 |  |

15. | Creditors: amounts falling due within one year |

2025 | 2024 |

| £ | £

| Trade creditors | 438,348 |  | 312,399 |  |

| Amounts owed to group undertakings | 2,103,603 |  | 2,942,041 |  |

| Tax | 206,387 |  | 849 |  |

| Social security and other taxes | 44,814 |  | 41,559 |  |

| Other creditors | 206,733 |  | 107,332 |  |

| Accrued expenses | 129,130 |  | 108,544 |  |

3,129,015 |  | 3,512,724 |  |

16. | Creditors: amounts falling due after more than one year |

2025 | 2024 |

| £ | £

| Deferred government grants | 59,988 |  | 61,868 |  |

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements - continued

for the Year Ended 28 February 2025

17. | Leasing agreements

| Minimum lease payments under non-cancellable operating leases fall due as follows:

2025 | 2024 |

| £ | £

| Within one year | 75,175 |  | 126,175 |  |

| Between one and five years | 8,006 |  | 83,181 |  |

83,181 |  | 209,356 |  |

18. | Provisions for liabilities

2025 | 2024 |

| £ | £

| Deferred tax

| Accelerated capital allowances | 63,987 |  | 16,346 |  |

| Other provisions | 29,735 |  | 29,560 |  |

93,722 |  | 45,906 |  |

Deferred | Other |

tax | provisions |

| £ | £

| Balance at 1 March 2024 | 16,346 |  | 29,560 |  |

| Provided during year | 47,641 |  | 175 |  |

| Balance at 28 February 2025 | 63,987 |  | 29,735 |  |

19. | Called up share capital

| Allotted, issued and fully paid:

| Number: | Class: | Nominal | 2025 | 2024 |

value: |  | £ | £

| 100 | Ordinary | 1 | 100 |  | 100 |  |

20. | Reserves

Retained |

earnings |

| £

| At 1 March 2024 | 1,948,041 |  |

| Profit for the year | 832,529 |  |

| At 28 February 2025 | 2,780,570 |  |

| Profit and loss account - This reserve records distributable retained earnings and accumulated losses.

Applied Acoustic Engineering Limited (Registered number: 02357352)

Notes to the Financial Statements - continued

for the Year Ended 28 February 2025

21. | Related party disclosures

| 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 wholly owned subsidiaries within the group.

| During the year a close family member of the directors was employed by the company and was paid a competitive market rate.

| A loan of £1.25m has been secured within the parent company AAE Technologies Limited , resulting in a fixed charge over all assets in this entity and all other subsidiaries. Furthermore, a floating charge over all the other property, assets and rights of the entity owned now or in the future which are not subject to an effective fixed charge.

22. | Ultimate controlling party

| The parent company and controlling party is AAE Technologies Ltd

| The registered office of AAE Technologies Ltd is Marine House, Marine Park, Gapton Hall Road, Great Yarmouth, Norfolk, NR31 0NB. The group consolidated accounts are available from the Registrar of Companies.