Distributed Creation UK Limited
Financial Statements
For the year ended 31 December 2023
Pages for Filing with Registrar
Company Registration No. 11478054 (England and Wales)
Distributed Creation UK Limited
Contents
Page
Balance sheet
1
Notes to the financial statements
2 - 10
Distributed Creation UK Limited
Balance Sheet
As at 31 December 2023
Page 1
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
5,997
-
0
Tangible assets
5
289,803
-
0
Investments
6
-
0
970,000
295,800
970,000
Current assets
Debtors
8
2,886,447
30,568
Cash at bank and in hand
151,586
4,269
3,038,033
34,837
Creditors: amounts falling due within one year
9
(7,485,917)
(4,753,499)
Net current liabilities
(4,447,884)
(4,718,662)
Total assets less current liabilities
(4,152,084)
(3,748,662)
Capital and reserves
Called up share capital
10
1
1
Profit and loss reserves
(4,152,085)
(3,748,663)
Total equity
(4,152,084)
(3,748,662)

The director of the company has 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 and signed by the director and authorised for issue on 16 October 2024
K Srivastava
Director
Company Registration No. 11478054
Distributed Creation UK Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 2
1
Accounting policies
Company information

Distributed Creation UK Limited is a private company limited by shares, domiciled and incorporated in England and Wales. The registered office is 3rd Floor, 1 Ashley Road, Altrincham, United Kingdom, WA14 2DT.

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 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.

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

1.2
Going concern

The financial statements are prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future. The US parent company has confirmed that it will provide financial support if required and will truenot require repayment of amounts due to it of £7,319,173 (2022: £4,745,215) to enable the company to continue trading and meet its external liabilities as they fall due for a period of at least twelve months from the date of signing these financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for 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.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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 5 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Distributed Creation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 3
1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured 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 or valuation of assets less their residual values over their useful lives on the following bases:

Internally generated assets
5 years
1.6
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:

Leasehold improvements
Depreciated for the life of the lease after work is completed
Plant and equipment
3 Years
Fixtures and fittings
7 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.

1.7
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

Distributed Creation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 4
1.8
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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

Basic financial instruments are measured at amortised cost. The company has no other financial instruments or basic financial instruments measured at fair value.

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
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.

Distributed Creation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 5
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

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.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
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.

1.16
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.

Distributed Creation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 6
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.

Critical judgements
Value of intangible assets

The annual amortisation charge for intangible assets is sensitive to changes in the estimated lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. Goodwill impairment reviews are also performed annually. These reviews require an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise for the cash generating unit and a suitable discount rate to calculate present value. See note 4 for the carrying amount of the intangible assets.

Investments in subsidiaries

The carrying value of the investments in subsidiaries is £nil (2023: 970,000) as during the year, the trade and assets of each subsidiary were hived up to the company by way of a dividend. The directors have confirmed their intention to liquidate each subsidiary during 2024. The judgement was made to convert the value of investment to goodwill to recognise the transfer of trade and other assets.

3
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Total
7
-
0
Distributed Creation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 7
4
Intangible fixed assets
Goodwill
Internally generated assets
Total
£
£
£
Cost
At 1 January 2023
-
0
-
0
-
0
Additions
-
5,997
5,997
Conversion of Investment to Goodwill
970,000
-
970,000
At 31 December 2023
970,000
5,997
975,997
Amortisation and impairment
At 1 January 2023
-
0
-
0
-
0
Amortisation charged for the year
970,000
-
0
970,000
At 31 December 2023
970,000
-
0
970,000
Carrying amount
At 31 December 2023
-
0
5,997
5,997
At 31 December 2022
-
0
-
0
-
0
5
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 January 2023
-
0
-
0
-
0
Additions
130,057
184,198
314,255
At 31 December 2023
130,057
184,198
314,255
Depreciation and impairment
At 1 January 2023
-
0
-
0
-
0
Depreciation charged in the year
10,838
13,614
24,452
At 31 December 2023
10,838
13,614
24,452
Carrying amount
At 31 December 2023
119,219
170,584
289,803
At 31 December 2022
-
0
-
0
-
0
Distributed Creation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 8
6
Fixed asset investments
2023
2022
£
£
Shares in group undertakings and participating interests
-
0
970,000
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
970,000
Conversion to goodwill
(970,000)
At 31 December 2023
-
Carrying amount
At 31 December 2023
-
At 31 December 2022
970,000
7
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
Sample Magic Limited
England and Wales
Music production
Ordinary and Ordinary B
100
-
Capsun Proaudio Limited
England and Wales
Music production
Ordinary
100
-
Origin Sound Limited
England and Wales
Music production
Ordinary
100
-

All subsidiaries have the same registered office as Distributed Creation UK Limited.

 

During the year, the trade and assets of each subsidiary were hived up to the company by way of a dividend. The directors have confirmed their intention to liquidate each subsidiary during 2024.

Distributed Creation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 9
8
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
2,781,116
30,568
Other debtors
88,412
-
Prepayments and accrued income
16,919
-
0
2,886,447
30,568
9
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
25,162
1,984
Amounts owed to group undertakings
7,319,173
4,745,215
Accruals and deferred income
141,582
6,300
7,485,917
4,753,499

The amount due to group undertakings is repayable on demand but the group company has confirmed that it will not seek repayment until this company is able to do so.

10
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.1p each
1,000
1,000
1
1
11
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.

Senior Statutory Auditor:
Ryan Day
Statutory Auditor:
Moore Kingston Smith LLP
Distributed Creation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 10
12
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

2023
2022
£
£
264,000
25,700
13
Parent company

The parent company of Distributed Creation UK Limited is Distributed Creation Inc and its registered office is 817 Broadway 4th floor, New York, NY10003 USA,Consolidated accounts incorporating this company are available from this address.

2023-12-312023-01-01false2024-10-21CCH SoftwareCCH Accounts Production 2024.210No description of principal activityThis audit opinion is unqualifiedK SrivastavafalsefalseStatement on quality and completeness of information provided to auditors2024-10-164,152,084114780542023-01-012023-12-31114780542023-12-31114780542022-12-3111478054core:NetGoodwill2023-12-3111478054core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2023-12-3111478054core:NetGoodwill2022-12-3111478054core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-12-3111478054core:LandBuildings2023-12-3111478054core:OtherPropertyPlantEquipment2023-12-3111478054core:LandBuildings2022-12-3111478054core:OtherPropertyPlantEquipment2022-12-3111478054core:CurrentFinancialInstruments2023-12-3111478054core:CurrentFinancialInstruments2022-12-3111478054core:ShareCapital2023-12-3111478054core:ShareCapital2022-12-3111478054core:RetainedEarningsAccumulatedLosses2023-12-3111478054core:RetainedEarningsAccumulatedLosses2022-12-3111478054bus:Director12023-01-012023-12-3111478054core:Goodwill2023-01-012023-12-3111478054core:IntangibleAssetsOtherThanGoodwill2023-01-012023-12-3111478054core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2023-01-012023-12-3111478054core:LeaseholdImprovements2023-01-012023-12-3111478054core:PlantMachinery2023-01-012023-12-3111478054core:FurnitureFittings2023-01-012023-12-31114780542022-01-012022-12-3111478054core:NetGoodwill2022-12-3111478054core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-12-31114780542022-12-3111478054core:NetGoodwill2023-01-012023-12-3111478054core:LandBuildings2022-12-3111478054core:OtherPropertyPlantEquipment2022-12-3111478054core:LandBuildings2023-01-012023-12-3111478054core:OtherPropertyPlantEquipment2023-01-012023-12-3111478054bus:PrivateLimitedCompanyLtd2023-01-012023-12-3111478054bus:FRS1022023-01-012023-12-3111478054bus:Audited2023-01-012023-12-3111478054bus:FullAccounts2023-01-012023-12-3111478054bus:SmallCompaniesRegimeForAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP