Company Registration No. 01250515 (England and Wales)
MUSIC IN PRINT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
MUSIC IN PRINT LIMITED
COMPANY INFORMATION
Director
L M Morton
Company number
01250515
Registered office
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
MUSIC IN PRINT LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 20
MUSIC IN PRINT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The director presents the strategic report for the year ended 31 December 2023.
Business review and principal activities
The Company continues to trade in the retailing of printed music and books, musical instruments, and musical accessories, through its e-commerce site.
As shown in the Company’s profit and loss account on page 8, the Company made a net loss for the year of £2,505,659 (2022: £2,016,099) primarily due to a decrease in sales following the discontinuation of its physical store operations. The discontinued operations accounted for £2,313,980 of the net loss incurred, while the loss from continuing operations significantly improved to £191,679 (2022: £826,418).
A decrease in cash reserves to £309,099 (2022: £2,459,411), driven by restructuring costs, contributed to the increase in net liabilities, which rose to £6,352,458 (2022: £3,846,799). Of the total liabilities, £6,456,443 comprises amounts owed to group undertakings (2022: £6,454,505).
Principal risks and uncertainties
The Company’s principal risks and uncertainties arise from the general economic climate and the shift from physical retail to an e-commerce presence.
These risks have been mitigated through the closure of the loss-making stores, a change of focus to a more targeted product offering, and a concerted effort to reduce overall administrative and overheads expenses.
The Company further manages these risks by working with affiliated Group companies to provide high quality services and by maintaining strong relationships with its customers through the wider Group’s dedicated sales and customer success teams.
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. Sales decreased by 47.3% due to the physical store closures, with the overall gross profit margin decreasing from 26.8% to 21.4%, primarily as a result of the closing down stores.
Continuing operations saw a reduction in sales to £4,385,863 (2022: £8,062,480), with the loss reducing to £191,679 (2022: loss of £826,418). This reflects the focus on streamlining of products offered as well as targeted reductions in administrative costs. The gross profit in 2023 was 33.0% (2022: 25.9%)
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.
L M Morton
Director
23 September 2024
MUSIC IN PRINT LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The director presents his annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of retail sale of musical instruments, accessories and sheet music.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
R I Jones
(Resigned 3 April 2023)
T E Venvell
(Resigned 19 July 2024)
D J Diekelman
(Appointed 3 April 2023 and resigned 30 August 2024)
L M Morton
Financial instruments
Objectives and Policies
The financial risk management objectives & policies and information on exposure to various risks are described in detail in Principal risks and uncertainties section in the Strategic Report.
Financial risk management
The Company is subject to cash flow and credit risk and implements stringent credit risk management policies in conjunction with regular reviews of its cash flow projections. Additionally, the company has the financial support of the Group to cover its financial obligations as they fall due.
The company is exposed to some credit risk on trade receivable balances owed by third parties. This is managed setting strict credit limits and conducting credit checks on new customers. The company regularly reviews receivables aging and provisions for expected credit losses to mitigate potential defaults.
Liquidity risk relates to the Company’s ability to settle its debts as they fall due, however, the company has received a letter of support from its parent company.
Post reporting date events
The Directors confirm that there have been no material events occurring after the balance sheet date that would require adjustment to, or disclosure in, the financial statements.
Future developments
During 2024 the e-commerce platform has since been upgraded and it is anticipated to bring long term financial benefits to the Company.
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.
MUSIC IN PRINT LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
L M Morton
Director
23 September 2024
MUSIC IN PRINT LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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. He is 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.
MUSIC IN PRINT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MUSIC IN PRINT LIMITED
- 5 -
Opinion
We have audited the financial statements of Music In Print Limited (the 'company') for the year ended 31 December 2023 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 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 director's 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 director 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 director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
MUSIC IN PRINT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MUSIC IN PRINT LIMITED
- 6 -
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 director's 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 director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
MUSIC IN PRINT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MUSIC IN PRINT LIMITED
- 7 -
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.
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.
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.
Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates.
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 him 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.
Tanya Craft (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
23 September 2024
MUSIC IN PRINT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Continuing
Discontinued
31 December
Continuing
Discontinued
31 December
operations
operations
2023
operations
operations
2022
Notes
£
£
£
£
£
£
Turnover
3
4,385,863
2,032,985
6,418,848
8,062,480
4,120,440
12,182,920
Cost of sales
(2,936,719)
(2,111,247)
(5,047,966)
(5,970,450)
(2,946,277)
(8,916,727)
Gross profit
1,449,144
(78,262)
1,370,882
2,092,030
1,174,163
3,266,193
Administrative expenses
(2,063,972)
(1,808,369)
(3,872,341)
(2,917,787)
(2,348,377)
(5,266,164)
Other operating income
421,552
(421,552)
(661)
9,066
8,405
Operating loss
5
(193,276)
(2,308,183)
(2,501,459)
(826,418)
(1,165,148)
(1,991,566)
Interest payable and similar expenses
7
1,597
(6,180)
(4,583)
(24,533)
(24,533)
Loss before taxation
(191,679)
(2,314,363)
(2,506,042)
(826,418)
(1,189,681)
(2,016,099)
Tax on loss
8
383
383
Loss for the financial year
(191,679)
(2,313,980)
(2,505,659)
(826,418)
(1,189,681)
(2,016,099)
MUSIC IN PRINT LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
252,583
Current assets
Debtors
11
243,580
250,945
Cash at bank and in hand
309,099
2,459,441
552,679
2,710,386
Creditors: amounts falling due within one year
12
(6,547,682)
(6,784,668)
Net current liabilities
(5,995,003)
(4,074,282)
Total assets less current liabilities
(5,995,003)
(3,821,699)
Provisions for liabilities
Provisions
13
357,355
25,000
(357,355)
(25,000)
Net liabilities
(6,352,358)
(3,846,699)
Capital and reserves
Called up share capital
15
100
100
Profit and loss reserves
(6,352,458)
(3,846,799)
Total equity
(6,352,358)
(3,846,699)
The financial statements were approved by the board of directors and authorised for issue on 23 September 2024 and are signed on its behalf by:
L M Morton
Director
Company Registration No. 01250515
MUSIC IN PRINT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
100
(1,830,700)
(1,830,600)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(2,016,099)
(2,016,099)
Balance at 31 December 2022
100
(3,846,799)
(3,846,699)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
(2,505,659)
(2,505,659)
Balance at 31 December 2023
100
(6,352,458)
(6,352,358)
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Music In Print Limited is a private company limited by shares incorporated in England and Wales. The registered office is Acre House, 11-15 William Road, London, United Kingdom, NW1 3ER.
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
Notwithstanding net liabilities of £6,352,358 as at 31 December 2023 and a loss for the year of £2,505,659, the financial statements have been prepared as a going concern, on the basis that the company has the financial support of the group to cover obligations as they fall due for a period of at least 12 months from the date of signing these financial statements and that the group have also committed to not seek repayment of the amounts currently due unless the company is in a position to make the repayment. true
As at 31 December 2023 the amounts owed to group amounted to £6,456,443, once the group liability is removed, the company has a positive financial position of £104,085. Therefore, based on the group support the directors consider the going concern assumption to be appropriate.
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. 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
Tangible fixed assets
Tangible fixed assets are initially measured at cost net of depreciation and any impairment losses.
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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
5 years
Fixtures and fittings
4 years
Computers
4 years
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
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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).
1.6
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.
1.7
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.
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets 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.
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and loans from fellow group companies are 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
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.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Deferred tax
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
1.14
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 director is 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.
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 15 -
Dilapidations provision
Management have applied judgement in order to estimate the dilapidations provision relating to the retail stores. Management have assessed the potential dilapidation based on the available RICS information and square footage of the stores, along with post year end discussions and agreements with the landlords.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
6,418,848
12,182,920
2023
2022
£
£
Other significant revenue
Grants received
-
8,405
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
6,351,734
11,925,394
Europe
67,114
257,526
6,418,848
12,182,920
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional item - dilapidation expense
394,611
-
5
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
104
(2,879)
Government grants
-
(8,405)
Fees payable to the company's auditor for the audit of the company's financial statements
22,500
26,207
Depreciation of owned tangible fixed assets
52,139
64,287
Loss on disposal of tangible fixed assets
195,544
-
Operating lease charges
415,747
418,405
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administrative
23
55
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
741,085
1,040,953
Social security costs
51,819
80,724
Pension costs
17,909
29,047
810,813
1,150,724
7
Interest payable and similar expenses
2023
2022
£
£
Other interest
4,583
24,533
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(383)
Changes to the UK corporation tax rates were substantially enacted as part of the 2021 budget on 3 March 2021. This included an increase to the main rate from 19% to 25% from April 2023. The Company will be taxes at a rate of 25% unless its profits are sufficiently low enough to qualify for a lower rate of tax, the lowest being 19%.
Where applicable, deferred taxes at the balance sheet date have been measured using a tax rate of 25% to reflect the rate that the timing differences are likely to unwind and are reflected in the financial statements.
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
(Continued)
- 17 -
The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(2,506,042)
(2,016,099)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(589,421)
(383,059)
Tax effect of expenses that are not deductible in determining taxable profit
68,970
207
Unutilised tax losses carried forward
386,703
397,399
Depreciation on assets not qualifying for tax allowances
1,222
(14,475)
Other permanent differences
(72)
Deferred tax remeasurement change in tax rates
(22,885)
Adjustments made in repect of prior periods
(383)
Group relief surrendered
155,411
Taxation credit for the year
(383)
-
The company has estimated tax losses of £10.2M (2022: £9.0M). 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 £2.56M, has been recognised.
9
Discontinued operations
During the year ended 31 December 2023, the company ceased to operate via high street shops, electing to maintain only the online presence of the business. The final shop closed on 30 September 2023.
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
10
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2023
245,660
16,633
326,314
588,607
Disposals
(245,660)
(16,633)
(326,314)
(588,607)
At 31 December 2023
Depreciation and impairment
At 1 January 2023
239,611
15,456
80,957
336,024
Depreciation charged in the year
1,277
369
50,493
52,139
Eliminated in respect of disposals
(240,888)
(15,825)
(131,450)
(388,163)
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
6,049
1,177
245,357
252,583
During the year, all tangible fixed assets were disposed of following the closure of the Music In Print stores.
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,601
Corporation tax recoverable
390
Amounts owed by group undertakings
29,203
Other debtors
233,266
55,770
Prepayments and accrued income
10,314
160,981
243,580
250,945
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
26,643
167,065
Amounts owed to group undertakings
6,456,443
6,454,505
Taxation and social security
62,217
Accruals and deferred income
64,596
100,881
6,547,682
6,784,668
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Provisions for liabilities
2023
2022
£
£
Property dilapidation provision
135,000
25,000
Onerous lease provision
222,355
-
357,355
25,000
Movements on provisions:
Property dilapidation provision
Onerous lease provision
Total
£
£
£
At 1 January 2023
25,000
-
25,000
Additional provisions in the year
110,000
222,355
332,355
At 31 December 2023
135,000
222,355
357,355
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
17,909
29,047
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
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
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:
2023
2022
£
£
Within one year
72,000
249,750
Between two and five years
110,000
314,667
182,000
564,417
MUSIC IN PRINT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Operating lease commitments
(Continued)
- 20 -
There are three operating leases held by Music In Print Limited for vacant shop premises following the closure of physical stores. These leases are therefore considered onerous and have been provided for at the year-end. This is disclosed at Note 13 in the financial statements.
17
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
18
Ultimate controlling party
The parent company for which consolidated financial statements are drawn up and of which Music in Print Limited is a member is Hal Leonard LLC. The registered office is 7777 West Bluemound Road, Milwaukee, WI 53213, United States. Consolidated financial statements can be obtained from this address.
The ultimate controlling party is Zeta8 Foundation. The registered office is Austrasse 14, 9495 Triesen, Liechtenstein.
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