Company Registration No. 04064738 (England and Wales)
DEFECTED MUSIC LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
DEFECTED MUSIC LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 6
DEFECTED MUSIC LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
4
439
585
Current assets
Debtors
5
1,648,108
957,257
Cash at bank and in hand
343,748
364,631
1,991,856
1,321,888
Creditors: amounts falling due within one year
6
(1,691,379)
(1,084,654)
Net current assets
300,477
237,234
Total assets less current liabilities
300,916
237,819
Creditors: amounts falling due after more than one year
7
(16,514)
(26,612)
Net assets
284,402
211,207
Capital and reserves
Called up share capital
8
2
2
Profit and loss reserves
284,400
211,205
Total equity
284,402
211,207

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

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

The financial statements were approved by the board of directors and authorised for issue on 12 June 2024 and are signed on its behalf by:
W A Saunders
Director
Company Registration No. 04064738
DEFECTED MUSIC LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information

Defected Music Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ground Floor, 23 Curtain Road, London, England, EC2A 3LT.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have obtained assurance from its parent company, Optimum Defected Holdings Limited, that it and the group will continue to provide support and that it will not recall the amounts due to any group member for a period of at least 12 months after the date of signing these financial statements. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

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

1.4
Tangible fixed assets

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

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

Plant and machinery
25% on cost

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.

1.5
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand.

1.6
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.

DEFECTED MUSIC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
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.

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, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future 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.

1.7
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.

1.8
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

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

 

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

 

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

1.9
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.

DEFECTED MUSIC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Accrued income

The company relies on third party statements to recognise royalty and digital streaming income for the year. In the absence of these statements, the directors consider the income received post-year end in prior years, and any anticipated growth in sales based on recent releases of music, to calculate a reasonable estimate of royalty and digital streaming income to accrue at year end.

3
Employees

The average number of employees during the year was NIL (2022 - NIL).

4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023 and 31 December 2023
18,121
Depreciation and impairment
At 1 January 2023
17,536
Depreciation charged in the year
146
At 31 December 2023
17,682
Carrying amount
At 31 December 2023
439
At 31 December 2022
585
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
591,489
671,489
Other debtors
1,056,619
285,768
1,648,108
957,257
DEFECTED MUSIC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Debtors
(Continued)
- 5 -
6
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans
10,098
9,849
Trade creditors
71,968
7,040
Amounts owed to group undertakings
782,170
553,838
Corporation tax
34,682
34,682
Other taxation and social security
37,857
-
0
Other creditors
754,604
479,245
1,691,379
1,084,654
7
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
16,514
26,612

The company is a joint borrower with Defected Records Limited. Both companies jointly guarantee a loan facility of which either company may drawdown. Defected Records Limited holds long-term loans under the joint guarantee of £26,224,264 at 31 December 2023 of which Defected Music Limited is jointly liable.

 

The long-term loans are secured by fixed and floating charges over all property and assets of both the companies, including all of the company's rights in any intellectual property and vehicles, both present and future, for the duration of the loan.

8
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
2
2
2
2
9
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

The senior statutory auditor was Russell Nathan.
The auditor was HW Fisher LLP.
DEFECTED MUSIC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
10
Parent company

The parent company of Defected Music Limited is Optimum Defected Holdings Limited and its registered office is 23 Curtain Road, London, England, EC2A 3LT. The results of Defected Music Limited are included within the consolidated financial statements of Optimum Defected Holdings Limited.

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