Company registration number 09104337 (England and Wales)
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
COMPANY INFORMATION
Directors
Mr G L Dexter
Mr C Emerson
Ms N A Spence
Mr C A Greene
Secretary
Ms N A Spence
Company number
09104337
Registered office
Woodside 2
Dunmow Road
Birchanger
Bishop's Stortford
CM23 5RG
Auditor
Ensors
First Floor
Victory House, Vision Park
Chivers Way, Histon
Cambridge
CB24 9ZR
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 33
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2025
- 1 -

The directors present the strategic report for the year ended 31 August 2025.

Business Model

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

Review of the business

The financial year to 31 st August 2025 were sales of £11.7 million (2024 - £11.6 million) resulting in an operating loss of £0.4 million (2024 – loss £0.4 million). The world for consumer facing businesses has remained challenging with considerable uncertainty impacting consumer confidence across almost all markets with sales increasing only marginally with our international business out-performing the prior year and more than offsetting an under-performance in the UK markets. In the USA we moved from a “direct to consumer” sales model to one of traditional distribution in the summer, which in turn has an negative impact on sales values moving from a retail sales price to one of distribution prices. Gross margins were broadly in line with the prior year with overheads increasing by just under 3% reflecting a higher charge for amortisation and depreciation. In response to the challenging markets conditions, a review of the business operations was conducted in the second half of the year and annual operating costs reduced by circa £500k with a cost reduction program implemented and completed by the end of the financial year. Whilst this has been another difficult year, the business has again received strong support from our employees, our suppliers and key business partners who have all contributed during the year and their support is much appreciated.

Key Performance Indicators

Gross profit percentage in the year was in-line with the prior year and whilst there was increasing evidence of cost increases as the progressed, these increases did not have a material impact on margins. The cash operating costs were marginally down on the prior year, although an increase in the amortisation and depreciation charges in the year resulted in a small overall operating cost increase. A business review of costs resulted in an annual reduction of operating costs of circa £500k, the benefit of which will flow through in the new financial year starting on 1 st September 2025. The operating loss in the year was disappointing and is a reflection of the challenging market conditions across most geographical markets.

Product Development

Product development is a key part of the business strategy and fundamental to delivering future sales growth for the business. The business continues to invest in new product development with major new products scheduled for launch across all the key brands of Q Acoustics, QED and Goldring in the next 12 months.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
- 2 -
Principal risks and uncertainties

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

- The past year has seen considerable political change across the world and with it increased uncertainty that has impacted consumer confidence. The most consequential is the election of President Trump for a second term and the implementation of his global tariff policy, which has caused significant turbulence in the wider world and particularly for business into the USA. As mentioned above, the business moved from a “direct to consumer” sales model to one of traditional distribution in the USA and whilst the new tariff policy of the Trump administration has had an impact on the level of business generated in the USA, the view is that this remains an important market for our brands and with our new distribution partner, we will continue to develop the market for our brands.

- The conflict in Ukraine continues to cause uncertainty to economic environment in the wider world, and whilst the conflict has become the “norm” it continues to cast a shadow over consumer confidence. The conflict is ongoing and so long this is the case will negatively impact economic activity in many markets, which in turn will cause increased uncertainty with regard to sales for the business.

- The business requires a significant amount of US dollars each year to settle its liabilities with its Far Eastern suppliers and is consequently exposed to foreign exchange volatility between sterling and the US dollar and to a lesser extent, the Euro. Whilst the business seeks to mitigate this risk through a prudent hedging policy and international sales expansion, there remains volatility in foreign exchange that presents risks to the business. The business will continue to hedge its foreign exchange exposure in a prudent manner covering future product purchases and mitigating any potential unfavourable variances.

Outlook

The new financial year continues to be challenging not least due to the war in Middle East, which has undoubtedly had an impact on consumer confidence and consequently demand. However, the expectation that sales will be in line or marginally above the prior year and this combined with actions taken in reducing the operating costs the business is expected to be profitable at an operating level in the year to 31 st August 2026.

On behalf of the board

Mr G L Dexter
Director
13 May 2026
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2025
- 3 -

The directors present their annual report and financial statements for the year ended 31 August 2025.

Principal activities

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

Overview

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

Business review

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

Results and dividends

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

The Group's profit and loss account is shown on page 9 of these financial statements. Sales for the year were £11.7 million (2024: £11.6 million) and the loss from operations was £0.4 million (2024 £0.35 million profit). The Group's balance sheet is shown on page 11 of these financial statements. This shows the Group's financial position as 31 August 2025 and shareholders' funds of £2.6 million (2024: £3.3 million).

The directors have not proposed a final dividend for the year ended 31 August 2025 (2024: £nil).

Directors

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

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

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

Auditor

On 1 September 2025 our auditors, Ensors Accountants LLP, merged with Azets Audit Services Limited. Accordingly Ensors Accountants LLP formally resigned as the company’s auditors with the directors duly appointing Azets Audit Services Limited, trading as Ensors to fill the vacancy arising.

The auditor, Azets Audit Services Limited, trading as Ensors will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Energy and carbon report

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
- 4 -
Statement of disclosure to auditor

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

On behalf of the board
Mr G L Dexter
Director
13 May 2026
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2025
- 5 -

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

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

- state whether applicable U nited K ingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

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

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

We have audited the financial statements of Q Acoustics Limited and its Subsidiaries (the 'group') for the year ended 31 August 2025 set out on pages 9 to 33. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

- give a true and fair view of the state of the group's and the parent company's affairs as at 31 August 2025 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

- T he information given in the strategic report and the directors' r eport 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.

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

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

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

- adequate accounting records have not been kept 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 directors' r esponsibilities s tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group's and 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 parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

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

- obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company are complying with the legal and regulatory framework;

- inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;

- discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

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

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

Use of our report

This report is made solely to the parent 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 parent company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Jayson Lawson
Senior Statutory Auditor
For and on behalf of
14 May 2026
Ensors
Chartered Accountants
Statutory Auditor
First Floor
Victory House, Vision Park
Chivers Way, Histon
Cambridge
CB24 9ZR
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2025
- 9 -
2025
2024
Notes
£
£
Turnover
3
11,744,103
11,649,592
Change in stocks of finished goods and in work in progress
47,978
(347,597)
Raw materials and consumables
37,414
(41,621)
Other external expenses
(6,883,398)
(6,210,733)
Staff costs
6
(2,320,519)
(2,327,002)
Depreciation and other amounts written off tangible and intangible fixed assets
4
(1,050,349)
(802,678)
Exceptional item
7
-
0
(159,509)
Other operating expenses
(2,010,238)
(2,110,496)
Operating loss
4
(435,009)
(350,044)
Interest receivable and similar income
8
18,241
473
Interest payable and similar expenses
10
(459,546)
(434,676)
Loss before taxation
(876,314)
(784,247)
Tax on loss
11
191,673
194,989
Loss for the financial year
(684,641)
(589,258)
Loss for the financial year is all attributable to the owners of the parent company.

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2025
- 10 -
2025
2024
£
£
Loss for the year
(684,641)
(589,258)
Other comprehensive income
Currency translation gain taken to retained earnings
16,766
20,491
Cash flow hedges gain arising in the year
-
0
-
0
Total comprehensive income for the year
(667,875)
(568,767)
Total comprehensive income for the year is all attributable to the owners of the parent company.
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP BALANCE SHEET
AS AT 31 AUGUST 2025
31 August 2025
- 11 -
2025
2024
Notes
£
£
£
£
Fixed assets
Intangible assets
12
3,485,989
3,706,308
Tangible assets
13
429,170
556,743
3,915,159
4,263,051
Current assets
Stocks
16
4,320,342
4,297,479
Debtors
17
2,743,048
3,146,887
Cash at bank and in hand
258,931
252,304
7,322,321
7,696,670
Creditors: amounts falling due within one year
18
(7,529,538)
(7,092,312)
Net current (liabilities)/assets
(207,217)
604,358
Total assets less current liabilities
3,707,942
4,867,409
Creditors: amounts falling due after more than one year
19
(1,065,116)
(1,556,708)
Net assets
2,642,826
3,310,701
Capital and reserves
Called up share capital
23
15
15
Share premium account
374,995
374,995
Profit and loss reserves
2,267,816
2,935,691
Total equity
2,642,826
3,310,701
The financial statements were approved by the board of directors and authorised for issue on 13 May 2026 and are signed on its behalf by:
13 May 2026
Ms N A Spence
Director
Company registration number 09104337 (England and Wales)
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
COMPANY BALANCE SHEET
AS AT 31 AUGUST 2025
31 August 2025
- 12 -
2025
2024
Notes
£
£
£
£
Fixed assets
Investments
14
1
1
Current assets
Debtors
17
375,009
375,009
Net current assets
375,009
375,009
Net assets
375,010
375,010
Capital and reserves
Called up share capital
23
15
15
Share premium account
374,995
374,995
Total equity
375,010
375,010

As permitted by section 408 of the Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £0 (2024 - £0 profit).

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

The financial statements were approved by the board of directors and authorised for issue on 13 May 2026 and are signed on its behalf by:
13 May 2026
Ms N A Spence
Director
Company registration number 09104337 (England and Wales)
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2025
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 September 2023
10
-
0
3,504,458
3,504,468
Year ended 31 August 2024:
Loss for the year
-
-
(589,258)
(589,258)
Other comprehensive income:
Currency translation differences
-
-
20,491
20,491
Total comprehensive income
-
-
(568,767)
(568,767)
Issue of share capital
23
5
374,995
-
375,000
Balance at 31 August 2024
15
374,995
2,935,691
3,310,701
Year ended 31 August 2025:
Loss for the year
-
-
(684,641)
(684,641)
Other comprehensive income:
Currency translation differences
-
-
16,766
16,766
Total comprehensive income
-
-
(667,875)
(667,875)
Balance at 31 August 2025
15
374,995
2,267,816
2,642,826
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2025
- 14 -
Share capital
Share premium account
Total
Notes
£
£
£
Balance at 1 September 2023
10
-
0
10
Year ended 31 August 2024:
Profit and total comprehensive income for the year
-
-
-
0
Issue of share capital
23
5
374,995
375,000
Balance at 31 August 2024
15
374,995
375,010
Year ended 31 August 2025:
Profit and total comprehensive income
-
-
-
0
Balance at 31 August 2025
15
374,995
375,010
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2025
- 15 -
2025
2024
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
934,432
841,571
Interest paid
(459,546)
(434,676)
Income taxes refunded/(paid)
194,583
-
Net cash inflow from operating activities
669,469
406,895
Investing activities
Purchase of intangible assets
(648,605)
(838,715)
Proceeds on disposal of intangibles
-
1
Purchase of tangible fixed assets
(53,852)
(156,621)
Proceeds on disposal of tangible fixed assets
-
(1)
Interest received
18,241
473
Net cash used in investing activities
(684,216)
(994,863)
Financing activities
Proceeds from issue of shares
-
375,000
Repayment of borrowings
(491,593)
741,483
Movement on bank loans
512,967
(616,757)
Net cash generated from financing activities
21,374
499,726
Net increase/(decrease) in cash and cash equivalents
6,627
(88,242)
Cash and cash equivalents at beginning of year
252,304
340,546
Cash and cash equivalents at end of year
258,931
252,304
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
- 16 -
1
Accounting policies
Company information

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

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

1.1
Basis of preparation

The financial statements are prepared under the historical cost convention.

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

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

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

- Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;

- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

- Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.

1.2
Business combinations

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

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
1
Accounting policies
(Continued)
- 17 -
1.3
Basis of consolidation

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

All financial statements are made up to 31 August 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.

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

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

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

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

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

1.4
Going concern

A t the time of approving the financial statements, t he directors have a reasonable expectation that the group and parent company ha s adequate resources to continue in operational existence for the foreseeable future. The directors have prepared detailed forecasts to support this view and consider available sources of finance.

Thus t he directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Revenue

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

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

1.6
Research and development expenditure

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
1
Accounting policies
(Continued)
- 18 -
1.7
Intangible fixed assets - goodwill

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

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

- at the end of the first full financial year period following acquisition; and

- in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.

1.8
Intangible fixed assets other than goodwill

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

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

The company has recognis ed development cost as an intangible asset as:

- the projects are clearly defined

- expenditures are separately identifiable

- the projects are commercially viable

- the projects are technically feasible

- projects income is expected to outweigh cost

- resources are available to complete the project

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

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

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

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

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

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
1
Accounting policies
(Continued)
- 19 -
1.10
Fixed asset investments

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

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

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

1.11
Impairment of fixed assets

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

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

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

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

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

1.12
Stocks

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

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

1.13
Cash and cash equivalents

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
1
Accounting policies
(Continued)
- 20 -
1.14
Financial instruments

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

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

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

Basic financial assets

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

Other financial assets

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

Impairment of financial assets

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

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

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
1
Accounting policies
(Continued)
- 21 -
Basic financial liabilities

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

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

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

Other financial liabilities

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

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

Derecognition of financial liabilities

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

1.15
Equity instruments

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

1.16
Taxation

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

Current tax

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
1
Accounting policies
(Continued)
- 22 -
Deferred tax

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

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

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

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.17
Employee benefits

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

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

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

1.18
Retirement benefits

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

1.19
Leases
As lessee

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

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
1
Accounting policies
(Continued)
- 23 -
1.20
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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

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

1.21

Exceptional items

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

2
Judgements and key sources of estimation uncertainty

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

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

Bad debt provision

The group makes an estimate of the recoverable value of trade debtors. When assessing impairment of trade debtors management considers factors including the current credit rating of the debtor, the aging profile of debtors, whether covered by insurance and historical experience. The bad debt provision at the end of the accounting period was £47,642 (2024: £47,642).

Stock provision

The group monitors the value of stock lines regularly to ensure stock is recorded and the lower of cost and net realisable value. Where this is not the case a provision is made to write down the value of stock to the correct level. The condition of stock and current market conditions are also taken into account when making stock provisions. The stock provision at the end of the accounting period was £212,498 (2024: £255,396)

3
Turnover and other revenue

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

2025
2024
£
£
Turnover analysed by class of business
Design & manufacture of hi-fi products
11,744,103
11,649,592
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
3
Turnover and other revenue
(Continued)
- 24 -
2025
2024
£
£
Other revenue
Interest income
18,241
473

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

4
Operating loss
2025
2024
£
£
Operating loss for the year is stated after charging/(crediting):
Exchange (losses)/gains
25,946
(30,038)
Research and development costs
85,490
55,568
Depreciation of owned tangible fixed assets
181,407
167,568
Loss on disposal of tangible fixed assets
18
-
Amortisation of intangible assets
868,924
635,112
Profit on disposal of intangible assets
-
(2)
Operating lease charges
482,628
468,049
5
Auditor's remuneration
2025
2024
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,000
5,000
Audit of the financial statements of the company's subsidiaries
27,507
26,118
32,507
31,118
6
Employees

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

Group
Company
2025
2024
2025
2024
Number
Number
Number
Number
Manufacturing
3
6
-
-
Selling and distribution
15
15
-
-
Administration
20
24
-
-
Total
38
45
0
0
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
6
Employees
(Continued)
- 25 -

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

Group
Company
2025
2024
2025
2024
£
£
£
£
Wages and salaries
1,996,244
1,979,607
-
0
-
0
Social security costs
241,845
245,495
-
-
Pension costs
82,430
101,900
-
0
-
0
2,320,519
2,327,002
-
0
-
0
7
Exceptional item
2025
2024
£
£
Refinancing
-
159,509
8
Interest receivable and similar income
2025
2024
£
£
Interest income
Interest on bank deposits
324
473
Other interest income
17,917
-
Total income
18,241
473
9
Directors' remuneration
2025
2024
£
£
Remuneration for qualifying services
333,829
277,266
Company pension contributions to defined contribution schemes
16,777
84,335
Sums paid to third parties for directors' services
29,400
44,667
380,006
406,268

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2024 - 2).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2025
2024
£
£
Remuneration for qualifying services
206,061
218,270
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
- 26 -
10
Interest payable and similar expenses
2025
2024
£
£
Interest on bank overdrafts and loans
8,577
8,549
Other interest
450,969
426,127
Total finance costs
459,546
434,676
11
Taxation
2025
2024
£
£
Current tax
Adjustments in respect of prior periods
(191,673)
(194,989)

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

2025
2024
£
£
Loss before taxation
(876,314)
(784,247)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%)
(219,079)
(196,062)
Tax effect of expenses that are not deductible in determining taxable profit
1,464
909
Change in unrecognised deferred tax assets
200,385
177,000
Permanent capital allowances in excess of depreciation
1,888
1,071
Under/(over) provided in prior years
(191,673)
(194,989)
Other short term differences
15,342
17,082
Taxation credit
(191,673)
(194,989)

At the year end the group had approx. £7.7m of unrelieved tax losses (2024: £7.1m). A deferred tax asset of £1,131,287 has been recognised on these losses.

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
- 27 -
12
Intangible fixed assets
Group
Goodwill
Patents
Development Costs
Total
£
£
£
£
Cost
At 1 September 2024
(3,613,943)
20,344
4,646,745
1,053,146
Additions - internally developed
-
0
-
0
648,605
648,605
At 31 August 2025
(3,613,943)
20,344
5,295,350
1,701,751
Amortisation and impairment
At 1 September 2024
(3,613,943)
15,697
945,084
(2,653,162)
Amortisation charged for the year
-
0
2,567
866,357
868,924
At 31 August 2025
(3,613,943)
18,264
1,811,441
(1,784,238)
Carrying amount
At 31 August 2025
-
0
2,080
3,483,909
3,485,989
At 31 August 2024
-
0
4,647
3,701,661
3,706,308
The company had no intangible fixed assets at 31 August 2025 or 31 August 2024.
13
Tangible fixed assets
Group
Leasehold land and buildings
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 September 2024
105,414
998,206
71,679
35,174
43,657
1,254,130
Additions
-
0
34,911
-
0
18,941
-
0
53,852
Disposals
-
0
(12,580)
(956)
(8,184)
-
0
(21,720)
At 31 August 2025
105,414
1,020,537
70,723
45,931
43,657
1,286,262
Depreciation and impairment
At 1 September 2024
45,647
529,730
71,357
6,996
43,657
697,387
Depreciation charged in the year
10,727
150,295
579
19,806
-
0
181,407
Eliminated in respect of disposals
-
0
(12,580)
(956)
(8,166)
-
0
(21,702)
At 31 August 2025
56,374
667,445
70,980
18,636
43,657
857,092
Carrying amount
At 31 August 2025
49,040
353,092
(257)
27,295
-
0
429,170
At 31 August 2024
59,767
468,476
322
28,178
-
0
556,743
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
13
Tangible fixed assets
(Continued)
- 28 -
The company had no tangible fixed assets assets at 31 August 2025 or 31 August 2024.
14
Fixed asset investments
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
1
1
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 September 2024 and 31 August 2025
1
Carrying amount
At 31 August 2025
1
At 31 August 2024
1
15
Subsidiaries

Details of the company's subsidiaries at 31 August 2025 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
AHE123 Limited
United Kingdom
Dormant
"A" shares
0
100.00
Armour Home Electronics Limited
United Kingdom
Development & trading of audio products
"A" shares
100.00
-
Armour Hong Kong Limited
Hong Kong
Management services & trading of audio products
"A" shares
0
100.00
Goldring Producst Limited
United Kingdom
Dormant
"A" shares
0
100.00
Myryad Systems Limited
United Kingdom
Dormant
"A" shares
0
100.00
QED Audio Products Limited
United Kingdom
Dormant
"A" shares
0
100.00

Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
- 29 -
16
Stocks
Group
Company
2025
2024
2025
2024
£
£
£
£
Raw materials and consumables
560,563
523,149
-
-
Finished goods and goods for resale
3,759,779
3,774,330
-
0
-
0
4,320,342
4,297,479
-
-
17
Debtors
Group
Company
2025
2024
2025
2024
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,397,143
1,649,366
-
0
-
0
Corporation tax recoverable
192,079
194,989
-
0
-
0
Amounts owed by group undertakings
-
0
-
0
375,000
375,000
Other debtors
451,860
431,296
9
9
Prepayments and accrued income
201,966
371,236
-
0
-
0
2,243,048
2,646,887
375,009
375,009
Deferred tax asset (note 21)
500,000
500,000
-
0
-
0
2,743,048
3,146,887
375,009
375,009
18
Creditors: amounts falling due within one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans
20
2,817,784
2,304,817
-
0
-
0
Other borrowings
20
491,592
491,593
-
0
-
0
Trade creditors
3,555,601
3,548,730
-
0
-
0
Other taxation and social security
137,389
166,926
-
0
-
0
Other creditors
353,051
396,437
-
0
-
0
Accruals and deferred income
174,121
183,809
-
0
-
0
7,529,538
7,092,312
-
0
-
0
19
Creditors: amounts falling due after more than one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Other borrowings
20
1,065,116
1,556,708
-
0
-
0
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
- 30 -
20
Loans and overdrafts
Group
Company
2025
2024
2025
2024
£
£
£
£
Bank loans
2,817,784
2,304,817
-
0
-
0
Other loans
1,556,708
2,048,301
-
0
-
0
4,374,492
4,353,118
-
-
Payable within one year
3,309,376
2,796,410
-
0
-
0
Payable after one year
1,065,116
1,556,708
-
0
-
0

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

Under an asset based lending agreement the group can borrow funds based on the value of unpaid sales invoices and stock held in its UK warehouse. Amounts borrowed are secured by way of a cross guarantee and debenture over the assets of the group. Included within bank loans and overdrafts are secured loans of £2,817,784 (2024 - £2,304,817).

21
Deferred taxation

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

Assets
Assets
2025
2024
Group
£
£
Accelerated capital allowances
(631,287)
(631,287)
Tax losses
1,131,287
1,131,287
500,000
500,000
The company has no deferred tax assets or liabilities.
There were no deferred tax movements in the year.

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

22
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
82,430
101,900
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
22
Retirement benefit schemes
(Continued)
- 31 -

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. Contributions totalling £21,791 (2024 - £25,927) were payable to the fund at the year end and are included in creditors.

23
Share capital
Group and company
2025
2024
2025
2024
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of 1p each
780
780
7
7
Ordinary B of 1p each
750
750
8
8
1,530
1,530
15
15
24
Financial commitments, guarantees and contingent liabilities

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

25
Operating lease commitments
As lessee

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

Group
Company
2025
2024
2025
2024
£
£
£
£
Within 1 year
343,084
343,084
-
-
Years 2-5
223,190
380,592
-
-
566,274
723,676
-
-
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
- 32 -
26
Related party transactions
Transactions with related parties

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

The company has a loan agreement with Hawk Investment Holdings Limited (Transferred from Armour Group Plc, a company which was previously the parent company) for £1,556,708 (2024 - £2,048,301). The company incurred loan interest of £178,140 (2024 - £80,479) during the year.

27
Controlling party

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

28
Cash generated from group operations
2025
2024
£
£
Loss after taxation
(684,641)
(589,258)
Adjustments for:
Taxation credited
(191,673)
(194,989)
Finance costs
459,546
434,676
Investment income
(18,241)
(473)
Loss on disposal of tangible fixed assets
18
-
Gain on disposal of intangible assets
-
(2)
Amortisation and impairment of intangible assets
868,924
635,112
Depreciation and impairment of tangible fixed assets
181,407
167,568
Foreign exchange gains on cash equivalents
16,766
20,491
Movements in working capital:
(Increase)/decrease in stocks
(22,863)
389,218
Decrease/(increase) in debtors
400,929
(107,520)
(Decrease)/increase in creditors
(75,740)
86,748
Cash generated from operations
934,432
841,571
Q ACOUSTICS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
- 33 -
29
Analysis of changes in net debt - group
1 September 2024
Cash flows
31 August 2025
£
£
£
Cash at bank and in hand
252,304
6,627
258,931
Borrowings excluding overdrafts
(4,353,118)
(21,374)
(4,374,492)
(4,100,814)
(14,747)
(4,115,561)
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