ACCOUNTS - Final Accounts

Operating profit

The operating profit is stated after charging:

ORANGE MUSIC ELECTRONIC COMPANY LIMITED - Company Information

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Registered number: 01289884

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

COMPANY INFORMATION

Directors	C S Cooper
	A G Emsley
	C W Cooper
	C K Cooper


Company secretary	P J Whiteford


Registered number	01289884


Registered office	108 Ripon Way
	Borehamwood
	Herts
	WD6 2JA


Independent auditors	Barnes Roffe LLP
	Chartered Accountants & Statutory Auditor
	Charles Lake House
	Claire Causeway
	Crossways Business Park
	Dartford
	Kent
	DA2 6QA

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

CONTENTS

	Page
Strategic report	1 - 2
Directors' report	3 - 4
Independent auditors' report	5 - 8
Statement of comprehensive income	9
Balance sheet	10
Statement of changes in equity	11
Notes to the financial statements	12 - 25

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Introduction

The directors present the strategic report for the year ended 30 September 2021.

Business review

The results for the year and the financial position of the company are shown in the attached financial statements.
The company’s sales this year have increased to £13.3m (2020: £10.7m) although there has been a fall in the gross profit margin 22.6% (2020:25.4%) due in part to the increase seen in component parts and freight charges. From careful management and control on costs overheads have remained consistent in 2021 at £1.5m (2020: £1.5m).
During this financial year the company has continued to deal with the ongoing effects of the COVID-19 pandemic, the associated measures that governments, customers and suppliers put in place to deal with it.
The measures we have put in place measures to protect the health and safety of our staff, to manage our supply chain, and to adapt to the new market requirements since the start of the pandemic have all helped to contribution to the strong year of trading we have seen and we believe these will enable us to continue strong in 21/22.

Principal risks and uncertainties

There is a lot of change in the trading environment causing risk and uncertainty but also providing opportunities. Macroeconomic and political factors are affecting the whole distribution chain. We keep a careful eye on all the risk factors and stay focused to reach our goals. Rising inflation worldwide has the double result of increasing costs and reducing discretionary income for the end customer of our products
Worldwide shortages and price increases in core parts together with shipping shortages and increased prices are creating uncertainty in future costs but we are carefully monitoring the situation.
We work very closely with our suppliers operating on shared values and high standards enabling our suppliers to purchase in our success as we grow.
Currency rate fluctuations continue to be significant risk to the company and contribute to the fall in gross profit margin seen in 2021. Due to the current economic uncertainties, we are facing these will continue to be a big risk to the company. To help with mitigating the risk, the company regularly monitors exchanges rates and continues to match the currency it charges international customers with that of its major suppliers.

Financial key performance indicators

Turnover, Gross Margin, Debtor Days, Creditor Days and Stock Turnover are key performance indicators used to manage the business.

2021 2020
Turnover £13.3m £10.7m
Gross Margin 22.6% 25.4%
Debtor Days 22 31
Creditor Days 32 51
Stock Turnover 38 48

Page 1

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Other key performance indicators

The company carefully monitors market share, brand awareness and social media uptake in all markets. The company measures customer feedback and all quality issues raised.

The Future

The company is still dealing with the coronavirus pandemic affecting the supply chain and whilst the company will undoubtedly suffer some adverse impact from this in the short term, the directors are confident that we can work through the temporary disruption and that our business plans are robust even in the current situation due to the strong relationships we have with our business partners. A major risk is that a downturn in the economy together with increased inflation could affect customer spending and therefor impact sales.
A key priority of the company is its investment in research and development, and it will continue to invest in this area in the coming year to enable it to bring innovative and current products to the market with aim of increasing demand and market share within the industry.

This report was approved by the board on 17 June 2022 and signed on its behalf.

C S Cooper

Director

Page 2

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 30 SEPTEMBER 2021

The directors present their report and the financial statements for the year ended 30 September 2021.

Directors' responsibilities statement

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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), 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 for the company's financial statements and then apply them consistently;

∙make judgments 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 to 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.

Results and dividends

The profit for the year, after taxation, amounted to £1,229,602 (2020 - £1,034,479).

Dividends of £353,467 (2020: £900,000) were voted during the year.

Directors

The directors who served during the year were:

C S Cooper

A G Emsley

C W Cooper

C K Cooper

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Page 3

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Post balance sheet events

There have been no significant events affecting the company since the year end except as noted in the future developments in relation to the impact of coronavirus on the company.

Auditors

The auditors, Barnes Roffe LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 17 June 2022 and signed on its behalf.

C S Cooper

Director

Page 4

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORANGE MUSIC ELECTRONIC COMPANY LIMITED

Opinion

We have audited the financial statements of Orange Music Electronic Company Limited (the 'company') for the year ended 30 September 2021, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, 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 30 September 2021 and of its profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.

Page 5

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORANGE MUSIC ELECTRONIC COMPANY LIMITED (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.

Opinion 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 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, 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 Directors' responsibilities statement set out on page 3, 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 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.

Page 6

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORANGE MUSIC ELECTRONIC COMPANY LIMITED (CONTINUED)

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 an Auditors' 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.

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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with law and regulations, was as follows:
• The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
• We identified the laws and regulations applicable to the company through discussion with directors and other management, and from our commercial knowledge and experience of the relevant sector;
• The specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, are as follows;
o Companies Act 2006
o FRS102
o Health and Safety legislation
o Employment legislation
o Product reporting and associated regulations
o Tax legislation
• We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, reviewing board minutes and inspecting legal correspondence;
• Laws and regulations were communicated within the audit team at the planning meeting, and during the audit as any further laws and regulation were identified. The audit team remained alert to instances of non-compliance throughout the audit; and
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur by:
• Making enquires of management as to where they consider there was susceptibility to fraud and their knowledge of actual suspected and alleged fraud;
• Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations;
• Reviewing the financial statements and testing the disclosures against supporting documentation;
• Performing analytical procedures to identify any unusual or unexpected trends or anomalies;
• Inspecting and testing journal entries to identify unusual or unexpected transactions;
• Assessing whether judgement and assumptions made in determining significant accounting estimates, were indicative of management bias; and
• Investigating the rationale behind significant transactions, or transactions that are unusual or outside the company’s usual course of business.

Page 7

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORANGE MUSIC ELECTRONIC COMPANY LIMITED (CONTINUED)

The areas that we identified as being susceptible to misstatement through fraud were:
• Management bias in the estimates and judgements made;
• Management override of controls; and
• Posting of unusual journals or transactions.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.

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 an Auditors' 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 company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Mario Cientanni (Senior statutory auditor)

for and on behalf of

Barnes Roffe LLP

Chartered Accountants & Statutory Auditor

Charles Lake House

Claire Causeway

Crossways Business Park

Dartford

Kent

DA2 6QA

Date: 27 June 2022

Page 8

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 SEPTEMBER 2021

	2021	2020
Note	£	£


Turnover	4	13,298,086	10,734,466
Cost of sales		(10,289,527)	(8,002,936)
Gross profit		3,008,559	2,731,530
Administrative expenses		(1,475,123)	(1,505,272)
Other operating income	5	764	42,958
Operating profit	6	1,534,200	1,269,216
Interest receivable and similar income	10	1,160	1,832
Interest payable and similar expenses	11	(206)	-
Profit before tax		1,535,154	1,271,048
Tax on profit	12	(305,552)	(236,569)
Profit for the financial year		1,229,602	1,034,479

There were no recognised gains and losses for 2021 or 2020 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2021 (2020:£NIL).

The notes on pages 12 to 25 form part of these financial statements.

Page 9

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

REGISTERED NUMBER: 01289884

BALANCE SHEET

AS AT 30 SEPTEMBER 2021

		2021		2020
Note		£		£

Fixed assets
Tangible assets	14		61,606		96,240
Investments	15		25,000		25,000
			86,606		121,240
Current assets
Stocks	16	1,065,869		1,048,017
Debtors: amounts falling due after more than one year	17	2,138,502		2,254,122
Debtors: amounts falling due within one year	17	4,060,547		2,829,441
Cash at bank and in hand	18	3,109,211		3,435,402
		10,374,129		9,566,982
Creditors: amounts falling due within one year	19	(1,347,958)		(1,452,185)
Net current assets			9,026,171		8,114,797
Total assets less current liabilities			9,112,777		8,236,037
Provisions for liabilities
Deferred tax			(17,052)		(16,447)
Net assets			9,095,725		8,219,590

Capital and reserves
Called up share capital	21	9,000	9,000
Profit and loss account		9,086,725	8,210,590
		9,095,725	8,219,590

The financial statements were approved and authorised for issue by the board and were signed on its behalf
on 17 June 2022.

C S Cooper

Director

The notes on pages 12 to 25 form part of these financial statements.

Page 10

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2021

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 October 2020	9,000	8,210,590	8,219,590

Profit for the year	-	1,229,602	1,229,602
Dividends	-	(353,467)	(353,467)
At 30 September 2021	9,000	9,086,725	9,095,725

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2020

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 October 2019	9,000	8,076,111	8,085,111

Profit for the year	-	1,034,479	1,034,479
Dividends	-	(900,000)	(900,000)
At 30 September 2020	9,000	8,210,590	8,219,590

The notes on pages 12 to 25 form part of these financial statements.

Page 11

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

1.	General information

Orange Music Electronic Company Limited is a private company limited by shares and incorporated in England and Wales. The address of the registered office is 108 Ripon Way, Borehamwood, Hertfordshire, England, WD6 2JA. The principal activity of the company during the year has been that of the wholesaling of music equipment.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).

The following principal accounting policies have been applied:

2.2

Financial reporting standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

∙the requirements of Section 7 Statement of Cash Flows;

∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).

This information is included in the consolidated financial statements of OMEC Holdings Limited as at 30 September 2021 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.

Page 12

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

2.Accounting policies (continued)

2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

∙the company has transferred the significant risks and rewards of ownership to the buyer;

∙the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of revenue can be measured reliably;

∙it is probable that the company will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

2.4

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following bases:

Leasehold property	-	10% straight line
Plant and machinery	-	25% straight line
Motor vehicles	-	33.3% straight line
Fixtures and fittings	-	25% to 33% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of comprehensive income.

Page 13

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

2.Accounting policies (continued)

2.5

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Finished goods are valued to include all direct costs.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of comprehensive income.

2.6

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.7

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

2.8

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

2.9

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 14

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

2.Accounting policies (continued)

2.10

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of comprehensive income.

2.11

Finance costs

Finance costs are charged to the Statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

2.12

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

2.13

Operating leases: the company as lessee

Rentals paid under operating leases are charged to the Statement of comprehensive income on a straight line basis over the lease term.

2.14

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.

Page 15

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

2.Accounting policies (continued)

2.15

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.

2.16

Interest income

Interest income is recognised in the Statement of comprehensive income using the effective interest method.

2.17

Warranty provision

Provision is made for claims under warranties given by the company for some of its products. The provision is based on an assessment of future claims with reference to past experience. Such costs are generally incurred within two years post sale and are included within other creditors.

2.18

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of comprehensive income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

2.19

Research and development

Research and development expenditure is written off in the year in which it is incurred.

Page 16

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

2.Accounting policies (continued)

2.20

Valuation of investments

Investments in unlisted company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

a) Critical judgements in applying the company's accounting policies:
There were no significant judgments exercised by management in the preparation of the financial statements.
b) Key accounting estimates and assumptions:
The company made key assumptions regarding the useful economic life of tangible fixed assets and this is further described in note 2.4 of accounting policies.

Turnover

The whole of the turnover is attributable to the company's principal activity.

Analysis of turnover by country of destination:

					2021	2020
					£	£

United Kingdom	1,547,386	1,597,481
Rest of Europe	1,503,093	1,320,059
Rest of the world	10,247,607	7,816,926
	13,298,086	10,734,466

5.	Other operating income
		2021	2020
		£	£

Coronavirus Job Retention Grant	764	42,958
	764	42,958

Page 17

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Depreciation of tangible fixed assets	41,570	37,832
Exchange differences	190,949	160,384
Other operating lease rentals	162,797	176,056
Defined contribution pension cost	24,243	25,940

7.	Auditors' remuneration
		2021	2020
		£	£

Fees payable to the company's auditor and its associates for the audit of the company's annual financial statements

26,450

25,750

The company has taken advantage of the exemption not to disclose amounts paid for non audit services as these are disclosed in the group accounts of the parent company.

Page 18

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Wages and salaries	740,826	756,375
Social security costs	73,648	74,538
Cost of defined contribution scheme	24,243	25,940
	838,717	856,853

The average monthly number of employees, including the directors, during the year was as follows:

	2021	2020
	No.	No.

Directors	4	4
Administration	11	10
Sales and marketing	2	2
Technical and workshop	1	2
Warehouse	1	2

	19	20

9.	Directors' remuneration
		2021	2020
		£	£

Directors' emoluments	113,768	112,565
Company contributions to defined contribution pension schemes	3,637	1,989
	117,405	114,554

During the year retirement benefits were accruing to 2 directors (2020 - 2) in respect of defined contribution pension schemes.

Page 19

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

10.	Interest receivable
		2021	2020
		£	£

	Other interest receivable	1,160	1,832
		1,160	1,832

11.	Interest payable and similar expenses
		2021	2020
		£	£

	Other interest payable	206	-
		206	-

Corporation tax
Current tax on profits for the year	304,947	242,768
Adjustments in respect of previous periods	-	(6,315)

Total current tax	304,947	236,453

	Deferred tax
	Origination and reversal of timing differences	605	116


	Taxation on profit on ordinary activities	305,552	236,569

Page 20

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

12.Taxation (continued)

Profit on ordinary activities before tax

1,535,154

1,271,048

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)	291,679	241,499
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	16,088	1,386
Capital allowances for year less than/(in excess of) depreciation	6,065	(117)
Prior year adjustment	-	(6,315)
Movement in deferred tax	605	116
Group relief	(8,885)	-
Total tax charge for the year	305,552	236,569

Factors that may affect future tax charges

There were no factors that may affect future tax charges.

13.	Dividends
		2021	2020
		£	£

	Ordinary Shares	353,467	900,000
		353,467	900,000

Page 21

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

14.	Tangible fixed assets

	Leasehold Property	Plant and machinery	Motor vehicles	Fixtures and fittings	Total
	£	£	£	£	£
Cost or valuation
At 1 October 2020	114,759	25,205	12,900	264,516	417,380
Additions	-	2,099	-	4,837	6,936
Disposals	-	-	(12,900)	-	(12,900)
At 30 September 2021	114,759	27,304	-	269,353	411,416
Depreciation
At 1 October 2020	100,629	9,577	12,900	198,034	321,140
Charge for the year on owned assets	1,452	4,044	-	36,074	41,570
Disposals	-	-	(12,900)	-	(12,900)
At 30 September 2021	102,081	13,621	-	234,108	349,810
Net book value
At 30 September 2021	12,678	13,683	-	35,245	61,606
At 30 September 2020	14,130	15,628	-	66,482	96,240

15.	Fixed asset investments

		Unlisted investments
		£
	Cost or valuation
	At 1 October 2020	25,000
	At 30 September 2021	25,000

Page 22

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

16.	Stocks
		2021	2020
		£	£

Raw materials and consumables	365,274	240,912
Finished goods and goods for resale	700,595	807,105
	1,065,869	1,048,017

The difference between the purchase price or production cost of stocks and their replacement cost is not material.

17.	Debtors
		2021	2020
		£	£

Due after more than one year
Amounts owed by group undertakings	2,138,502	2,254,122
	2,138,502	2,254,122

					2021	2020
					£	£

Due within one year
Trade debtors	372,274	453,320
Amounts owed by group undertakings	3,475,654	2,216,862
Other debtors	22,311	10,379
Prepayments and accrued income	190,308	148,880
	4,060,547	2,829,441

18.	Cash and cash equivalents
		2021	2020
		£	£

	Cash at bank and in hand	3,109,211	3,435,402

Page 23

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

19.	Creditors: Amounts falling due within one year
		2021	2020
		£	£

Trade creditors	888,650	1,115,389
Corporation tax	177,365	125,278
Other taxation and social security	22,632	19,797
Other creditors	64,740	53,850
Accruals and deferred income	194,571	137,871
	1,347,958	1,452,185

20.	Deferred taxation

	2021	2020
	£	£

At beginning of year	(16,447)	(16,331)
Charged to the Statement of comprehensive income	(605)	(116)
At end of year	(17,052)	(16,447)

The provision for deferred taxation is made up as follows:
	2021	2020
	£	£

	Accelerated capital allowances	(17,052)	(16,447)
		(17,052)	(16,447)

21.	Share capital
		2021	2020
		£	£

Allotted, called up and fully paid

900,000 (2020 - 900,000) Ordinary shares shares of £0.01 each	9,000	9,000

Page 24

ORANGE MUSIC ELECTRONIC COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

22.	Pension commitments

The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £Nil (2020: £Nil) were payable to the fund at the balance sheet date.

Land and Buildings
Not later than 1 year	106,612	101,000
Later than 1 year and not later than 5 years	106,343	134,583
	212,955	235,583

					2021	2020
					£	£

Motor vehicles
Not later than 1 year	8,758	17,450
Later than 1 year and not later than 5 years	252	9,010
	9,010	26,460

24.	Related party transactions
	As at 30 September 2021 the company owed C S Cooper £615 (2020: £11,485) which is included within creditors due within one year. During the year purchases of £77,975 (2020: £74,953) were made from companies with common directors.

25.	Parent undertaking

The ultimate parent company is OMEC Holdings Limited, a company registered in England and Wales.

Page 25