Warwick Acoustics Limited - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 04451674 (England and Wales)

WARWICK ACOUSTICS LIMITED

UNAUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2020

Page

Company Information

1

Statement of Financial Position

2

to

3

Notes to the Financial Statements

4

to

10

DIRECTORS:

Dr D R Billson

Dr M A Grant

R J Kendrick

Mercia Fund Management (Nominees) Limited

G Waters

A J Hawken

D Roberts

SECRETARY:

Brodies Secretarial Services Limited

REGISTERED OFFICE:

Mira Technology Park

Unit 3, NW07

Watling Street

NUNEATON

Warwickshire

CV10 0TU

REGISTERED NUMBER:

04451674 (England and Wales)

ACCOUNTANTS:

Duncan & Toplis Limited

3 Princes Court,

Royal Way

Loughborough

Leicestershire

LE11 5XR

FIXED ASSETS

Intangible assets

4

2,696,358

2,744,074

Property, plant and equipment

5

121,955

142,998

Investments

6

1

1

2,818,314

2,887,073

CURRENT ASSETS

Inventories

316,020

252,624

Debtors

7

241,288

457,268

Cash at bank

1,549,132

774,488

2,106,440

1,484,380

CREDITORS

Amounts falling due within one year

8

3,278,796

1,580,968

NET CURRENT LIABILITIES

(1,172,356

)

(96,588

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,645,958

2,790,485

CREDITORS

Amounts falling due after more than one year

9

13,754

-

NET ASSETS

1,632,204

2,790,485

CAPITAL AND RESERVES

Called up share capital

11

637,910

420,154

Share premium

-

13,934,054

Share option reserve

402,667

402,667

Retained earnings

591,627

(11,966,390

)

1,632,204

2,790,485

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 30 September 2020.

The members have not required the company to obtain an audit of its financial statements for the year ended 30 September 2020 in accordance with Section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for:

(a)	ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

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

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 27 May 2021 and were signed on its behalf by:

Dr M A Grant - Director

1.	GENERAL INFORMATION

Warwick Acoustics Limited (Formerly Warwick Audio Technologies Limited) is a Private Company, Limited by shares, registered in England and Wales.

The company's registered office address and principal place of business is MIRA Technology Park Unit 3 NW07, Watling Street, Nuneaton, United Kingdom, CV10 0TU.

The company's registered number is 04451674.

The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £.

The significant accounting policies applied in the preparation of these financial statements are set out below.

These policies have been consistently applied to all years presented unless otherwise stated.

The financial statements cover the individual entity.

Sonoma Acoustics Limited is a subsidiary of the company, however the company is exempt by virtue of size from the requirement to prepare group accounts.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Related party exemption

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

Revenue

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

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.

Development costs are being amortised evenly over their estimated useful life of eight years.

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

SAP Implementation in Progress

Also included within Intangible Assets is SAP implementation in progress. No amortisation has been charged on SAP implementation in progress as this is an ongoing project, and the directors have judged that the useful economic life of this software will not be realised until completion of the project.

Upon completion of the project, SAP implementation will be amortised evenly over it's estimated useful life of three years.

Property, plant and equipment

Property, plant and equipment is stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Office construction

Straight line over 24 months

Tooling

Straight line over 36 months

Other assets

Straight line over 36 months

Grant income

IUK grants relating to revenue are recognised as income on a systemic basis over the period in which the related costs for which the grant is intended to compensate are recognised.

Coronavirus Job Retention Scheme grant income is recognised as other income on a systemic basis over the period in which the related costs for which the grant is intended to compensate are recognised.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost less impairment.

Inventories

Inventories are valued at the lower of cost and fair value less costs to complete and sell, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

Research and development

Research expenditure is written off to the income statement 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 capitalised and amortised over the period during which the company is expected to benefit.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position 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.

Share-based payment

The cost and corresponding increase in equity in respect of equity-settled share-based payment transactions with employees are measured by reference to the fair value of equity instruments issued at the date of grant. Amounts are expensed on a straight line basis over the vesting period based on the estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions. The cost and fair value of the liability incurred in respect of cash-settled transactions is measured using an appropriate option pricing model with changes in fair value recognised in profit or loss for the period.

Going concern

Despite having positive retained earnings as a result of a capital reduction in the financial year that cancelled the historic retained losses, the company continues to be loss making. This has necessitated the need to consider the appropriateness of preparing the financial statements on a going concern basis.

With the progress the company continues to make in executing its stated strategy, shareholders continue to demonstrate support of the business and of management's strategy through the support of further funding rounds. This, coupled with commercial progress made to date, gives the directors confidence that funding to continue the business through the coming twelve months will be forthcoming.

Also in common with many other organisations, the company's operations have been impacted by the coronavirus outbreak. The full impact of Covid-19 remains uncertain and continues to develop on a daily basis. Therefore the directors are monitoring the exposure to the company's trade and are referring to government and professional advice being published so that action can be considered which may help minimise the impact of this risk. The directors are confident that the company is in a position to manage the situation and possible outcomes, while working to mitigate the risk where possible.

The directors considered a period in excess of 12 months from the date of approval of the financial statements when making this assessment and consider that in preparing the financial statements, they have taken into account all information that could reasonably be expected to be available.

On this basis they consider that it is appropriate to prepare the financial statements on the going concern basis.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 14 (2019 - 10 ) .

4.	INTANGIBLE FIXED ASSETS

Other

intangible

assets

£

COST

At 1 October 2019

3,369,705

Additions

374,468

At 30 September 2020

3,744,173

AMORTISATION

At 1 October 2019

625,631

Charge for year

422,184

At 30 September 2020

1,047,815

NET BOOK VALUE

At 30 September 2020

2,696,358

At 30 September 2019

2,744,074

5.	PROPERTY, PLANT AND EQUIPMENT

Plant and

machinery

etc

£

COST

At 1 October 2019

403,396

Additions

76,090

At 30 September 2020

479,486

DEPRECIATION

At 1 October 2019

260,398

Charge for year

97,133

At 30 September 2020

357,531

NET BOOK VALUE

At 30 September 2020

121,955

At 30 September 2019

142,998

6.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 1 October 2019

and 30 September 2020

1

NET BOOK VALUE

At 30 September 2020

1

At 30 September 2019

1

The fixed asset investment relates to Sonoma Acoustics Limited, a wholly owned subsidiary. The trade and assets of Sonoma Acoustics Limited were transferred to Warwick Acoustics Limited on 28th September 2018.

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Trade debtors

13,125

125,698

Amounts owed by group undertakings

-

6,799

Other debtors

4,218

248

Tax

121,023

264,390

VAT

23,741

31,538

Accrued income

42,569

-

Prepayments

36,612

28,595

241,288

457,268

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Bank loans and overdrafts

1,033

-

Loan notes

2,710,000

1,110,000

Trade creditors

163,220

93,420

Other taxes and social security

102,280

25,542

Other creditors

2,514

114

Other creditors- credit card

3,820

12,290

Deferred income

10,833

195,452

Accrued expenses

285,096

144,150

3,278,796

1,580,968

9.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2020

2019

£

£

Bank loans - 1-2 years

3,001

-

Bank loans - 2-5 years

9,003

-

Bank loans more 5 yr by instal

1,750

-

13,754

-

2020

2019

£

£

Amounts falling due in more than five years:

Repayable by instalments

Bank loans more 5 yr by instal

1,750

-

10.	SECURED DEBTS

The following secured debts are included within creditors:

2020

2019

£

£

Loan Notes

2,710,000

1,110,000

The loan notes are each secured with a fixed and floating charge over the assets of the company.

It is agreed that after the year end the outstanding loans of £1,000,000 due to Mercia Investment Plan LP (Acting by Its General Partner Mercia (General Partner) Limited) and £110,000 due to Britania Limited, along with the interest accrued on these loans, will be converted into shares. These conversions have been revised and are expected to happen in May 2021.

The Future fund loan of £800k and other loan notes issued totalling £800k, along with the interest accrued on these loans were converted into shares in January 2021.

11.	CALLED UP SHARE CAPITAL

2020

2019

£

£

Allotted, called up and fully paid

749,815,288 Ordinary of £0.0001 each

74,982

74,982

462,198,951 C Ordinary of £0.001 each

462,199

244,443

1,007,291,871 D Ordinary of £0.0001 each

100,729

100,729

637,910

420,154

During the year the company issued 217,755,608 (2019: nil) C Ordinary £0.001 shares and nil (2019: nil ) D Ordinary £0.0001 shares with a total nominal value of £217,756 (2019: £40,954). Total consideration of £455,976 (2019: £2,572,704) was received which resulted in a share premium of £238,220 (2019: £2,531,750).

During the year share options for directors vested with a fair value of nil (2019: £131,645) which has been recognised with an increase in the share option reserve.

12.	OTHER FINANCIAL COMMITMENTS

The company has the following commitments due as follows:

2020

2019

£

£

In one year

37,515

54,176

2-5 years

-

1,515

37,515

55,691