Company Registration No. 10684804 (England and Wales)
HAL LEONARD EUROPE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
HAL LEONARD EUROPE LIMITED
COMPANY INFORMATION
Directors
R Jones
L Morton
T Venvell
Company number
10684804
Registered office
130 Shaftesbury Avenue
London
United Kingdom
W1D 5EU
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
HAL LEONARD EUROPE LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 18
HAL LEONARD EUROPE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Business review and principal activities
The principal activity of the Company is the publishing of printed music and the licensing of copyrights.
As shown in the profit and loss account on page 7, the Company reported a lower turnover of £5,636,125 (2020: £7,825,318) due to a reduced income stream. However, gross profit increased by +8.9%, to £2,170,456 (2020: £1,992,453).
Higher administrative expenses led to an overall lower net operating profit of £1,053,858 (2020: £1,285,870), however overall profitability on sales increased to 18.7% of turnover (2020: 16.4%)
The balance sheet on page 8 shows that the Company’s net assets at 31 December 2021 were £11,135,813 (2020: £10,081,955) with cash levels increasing to £2,821,509 (2020: £2,345,422).
Principal risks and uncertainties
The Company’s results may potentially be impacted by market competition and the general economic climate. The Company manages these risks by working with affiliated Group companies to provide high quality services to its customers, having fast response times to customer queries, and maintaining strong relationships with the Group’s customers.
The Covid-19 pandemic has not had a significant impact on the business as increased sales through e-commerce channels have mitigated lower sales in trade channels.
Key performance indicators
The Company’s directors consider sales and profitability to be the key measures of performance, and both were in line with the directors’ expectations.
The Company’s directors do not consider that presentation of non-financial indicators for the Company are necessary or appropriate for an understanding of the development, performance, or position of the business.
The Company takes care to minimise the impact of its operations on the environment.
Future developments
The Company will continue to grow sales by creation and launching of new titles and by developing its customer base and strategic partnerships.
The directors aim to continue to identify and realise further operating efficiencies which will facilitate net operating profit growth.
The level of underlying business is satisfactory, and the directors look to the future with confidence for improved performance.
R Jones
Director
12 September 2022
HAL LEONARD EUROPE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be that of publishing of printed music and the licensing of copyrights.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R Jones
L Morton
T Venvell
T Farncombe
(Resigned 22 July 2022)
Auditor
The auditor, HW Fisher LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 company’s auditor 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 company’s auditor is aware of that information.
On behalf of the board
R Jones
Director
12 September 2022
HAL LEONARD EUROPE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HAL LEONARD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HAL LEONARD EUROPE LIMITED
- 4 -
Opinion
We have audited the financial statements of Hal Leonard Europe Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. 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 company's affairs as at 31 December 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.
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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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:
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.
HAL LEONARD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAL LEONARD EUROPE LIMITED
- 5 -
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 and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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, 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.
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.
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.
HAL LEONARD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAL LEONARD EUROPE LIMITED
- 6 -
As part of our planning process:
We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006 and Copyright laws.
We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
Testing revenue and expenses, in particular cut-off, for evidence of management bias.
Obtaining third-party confirmation of material bank balances.
Documenting and verifying all significant related party balances and transactions.
Performing a physical verification of key assets.
Review of internal control procedures to ensure expenses were approved prior to paying suppliers
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Completing analytical review of key expenditure and revenue items and seeking explanations from management for exceptions.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
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.
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 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 company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
David Selwyn (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
12 September 2022
HAL LEONARD EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
2021
2020
Notes
£
£
Turnover
3
5,636,125
7,825,318
Cost of sales
(3,465,669)
(5,832,865)
Gross profit
2,170,456
1,992,453
Administrative expenses
(1,710,250)
(1,300,024)
Other operating income
593,652
593,441
Profit before taxation
1,053,858
1,285,870
Tax on profit
7
Profit for the financial year
1,053,858
1,285,870
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HAL LEONARD EUROPE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 8 -
2021
2020
Notes
£
£
£
£
Fixed assets
Goodwill
8
123,551
138,994
Tangible assets
9
145,792
216,341
269,343
355,335
Current assets
Stocks
10
1,970,930
Debtors
11
12,711,469
10,495,831
Cash at bank and in hand
2,821,509
2,345,422
15,532,978
14,812,183
Creditors: amounts falling due within one year
12
(854,092)
(1,148,712)
Net current assets
14,678,886
13,663,471
Total assets less current liabilities
14,948,229
14,018,806
Accruals
13
(3,812,416)
(3,936,851)
Net assets
11,135,813
10,081,955
Capital and reserves
Called up share capital
15
100,000
100,000
Profit and loss reserves
11,035,813
9,981,955
Total equity
11,135,813
10,081,955
The financial statements were approved by the board of directors and authorised for issue on 12 September 2022 and are signed on its behalf by:
R Jones
Director
Company Registration No. 10684804
HAL LEONARD EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2020
200
6,838,656
1,957,229
8,796,085
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
1,285,870
1,285,870
Bonus issue of shares
15
99,800
(99,800)
Reduction of shares
15
6,738,856
6,738,856
Other movements
-
(6,738,856)
-
(6,738,856)
Balance at 31 December 2020
100,000
9,981,955
10,081,955
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
1,053,858
1,053,858
Balance at 31 December 2021
100,000
11,035,813
11,135,813
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
1
Accounting policies
Company information
Hal Leonard Europe Limited is a private company limited by shares incorporated in England and Wales. The registered office is 130 Shaftesbury Avenue, London, United Kingdom, W1D 5EU.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts 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.
This 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:
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Hal Leonard LLC.
1.2
Going concern
Whilst Covid-19 is impacting retailers and consequently has had an adverse effect on the business to business sector, this was mitigated by the increased demand from the e-commerce business to the consumer sector. In respect of current trading the directors are confident that the company can continue as a going concern for a period of at least twelve months from the date of approval of these financial statements, and in addition the company has the support from its ultimate parent company.true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 11 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised 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 fair 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.
Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Development costs
2 - 5 years
Brand names
5 years
Copyrights
10 years
1.6
Tangible fixed assets
Tangible fixed assets are measured at cost net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
4 years
Fixtures and fittings
4 - 10 years
Computers
4 years
Assets under construction
Not depreciated
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 credited or charged to profit or loss.
1.7
Impairment of fixed assets
At each reporting period end date, the company 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).
1.8
Stocks
Amounts recognised as stock at year end relate to unfinished projects held as work in progress. These costs will be recharged to the group companies to which they relate upon completion.
1.9
Cash at bank and in hand
Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.
1.10
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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.
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 12 -
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 method 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.
Impairment of financial assets
Financial assets 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.
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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, 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 payments 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.
1.11
Equity instruments
Equity instruments issued by the company 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 company.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
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 leases asset are consumed.
1.15
Government grants
Government grants, which include amounts received under the Coronavirus Job Retention Scheme, are recognised at the fair value of the grant received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. The income is recognised in other income on a systematic basis over the periods in which the associated costs are incurred, using the accruals model.
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
1.16
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
There are no critical judgements in the financial statements.
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Music sales
5,636,125
7,825,318
2021
2020
£
£
Other significant revenue
Grants received
48,387
49,947
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
3,858,409
6,242,494
Europe
1,493,064
1,097,468
Rest of World
284,652
485,356
5,636,125
7,825,318
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 14 -
4
Operating profit
2021
2020
Operating profit for the year is stated after charging:
£
£
Exchange losses
24,349
27,200
Fees payable to the company's auditor for the audit of the company's financial statements
28,000
25,000
Depreciation of owned tangible fixed assets
74,597
103,718
Amortisation of intangible assets
15,443
15,444
Operating lease charges
357,089
388,807
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Administrative
101
111
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
3,404,731
3,311,098
Social security costs
322,846
290,163
Pension costs
122,859
125,658
3,850,436
3,726,919
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
332,852
168,100
Company pension contributions to defined contribution schemes
16,397
8,099
349,249
176,199
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
(Continued)
- 15 -
7
Taxation
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
1,053,858
1,285,870
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
200,233
244,315
Tax effect of expenses that are not deductible in determining taxable profit
1,279
133
Tax effect of utilisation of tax losses not previously recognised
(199,255)
(243,306)
Capital allowances in excess of depreciation
(8,335)
(3,012)
Depreciation on assets not qualifying for tax allowances
3,126
1,164
Amortisation on assets not qualifying for tax allowances
2,934
2,934
Short term timing differences
18
(2,228)
Taxation charge for the year
-
-
The company has estimated tax losses of £2,380,000 (2020: £3,400,000). In view of the fact that it is less likely than not that these can be fully utilised, no deferred tax asset, which would equate to approximately £636,000, has been recognised.
8
Intangible fixed assets
Goodwill
Development costs
Brand names
Copyrights
Total
£
£
£
£
£
Cost
At 1 January 2021 and 31 December 2021
402,657
646,421
577
239,285
1,288,940
Amortisation and impairment
At 1 January 2021
263,663
646,421
577
239,285
1,149,946
Amortisation charged for the year
15,443
15,443
At 31 December 2021
279,106
646,421
577
239,285
1,165,389
Carrying amount
At 31 December 2021
123,551
123,551
At 31 December 2020
138,994
138,994
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 16 -
9
Tangible fixed assets
Leasehold improvements
Assets under construction
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 1 January 2021
25,408
44,338
140,572
294,916
505,234
Additions
23,545
24,841
48,386
Transfers
(44,338)
(44,338)
At 31 December 2021
48,953
140,572
319,757
509,282
Depreciation and impairment
At 1 January 2021
8,561
70,414
209,918
288,893
Depreciation charged in the year
6,352
28,970
39,275
74,597
At 31 December 2021
14,913
99,384
249,193
363,490
Carrying amount
At 31 December 2021
34,040
41,188
70,564
145,792
At 31 December 2020
16,847
44,338
70,158
84,998
216,341
10
Stocks
2021
2020
£
£
Finished goods and goods for resale
1,970,930
11
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
115,824
26,004
Amounts owed by group undertakings
10,181,952
8,366,014
Other debtors
548,805
252,443
Prepayments and accrued income
1,864,888
1,851,370
12,711,469
10,495,831
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 17 -
12
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
232,634
205,253
Amounts owed to group undertakings
431,185
757,053
Taxation and social security
114,887
111,020
Other creditors
75,386
75,386
854,092
1,148,712
13
Accruals
2021
2020
£
£
Accruals
3,812,416
3,936,851
14
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
122,859
125,658
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
15
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
16
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
348,842
255,416
Between two and five years
46,713
395,555
395,555
650,971
17
Related party transactions
HAL LEONARD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
17
Related party transactions
(Continued)
- 18 -
During the year Hal Leonard Europe Limited made sales of £627,316 (2020: £544,807) to a company in which directors of Hal Leonard Europe Limited were also directors at different periods in the year.
Remuneration for the highest paid director was £130,746 (2020: £109,052) and company pension contributions to defined contribution schemes for the highest paid director was £6,446 (2020: £5,252).
18
Ultimate controlling party
The parent company for which consolidated financial statements are drawn up and of which Hal Leonard Europe Limited is a member is Hal Leonard LLC.
The ultimate controlling party is SEP V HL Holdings LP.
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