Registered number
13722564
Downtown Music Capital UK Ltd
Financial statements
31 December 2023
Pages for filing with registrar
Downtown Music Capital UK Ltd
Registered number: 13722564
Balance Sheet
as at 31 December 2023
Notes 2023 2022
£ £
Current assets
Debtors 4 3,379,092 3,090,837
Cash at bank and in hand 27,814 37,273
3,406,906 3,128,110
Creditors: amounts falling due within one year 5 (3,893,599) (3,743,392)
Net current liabilities (486,693) (615,282)
Net liabilities (486,693) (615,282)
Capital and reserves
Called up share capital 100 100
Profit and loss account (486,793) (615,382)
Shareholders' funds (486,693) (615,282)
The accounts have been prepared and delivered in accordance with the special provisions applicable to companies subject to the small companies regime. The profit and loss account has not been delivered to the Registrar of Companies.
Mr Andrew Bergman
Director
Approved by the board on 30 September 2024
Downtown Music Capital UK Ltd
Notes to the Accounts
for the year ended 31 December 2023
1 Accounting policies
Basis of preparation
The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard).
Going concern
These accounts have been prepared on the going concern basis, the validity of which is dependent upon the continuing financial support of the parent company, Downtown Music Capital LLC, to ensure adequate facilities are available for the company to discharge its liabilities as they fall due. This was the second year of trading for the Company and funding was provided by the parent company which will not seek repayment until such time as the Company is in a financial position to do so. Based on this, the directors believe that it is appropriate to prepare the financial statements on the going concern basis.
Turnover
Turnover represents amounts receivable for royalties net of VAT.

The Company has prepared the financial statements in accordance with ASC 606 and all related amendments. In applying ASC 606, the Company has followed a five-step approach for evaluating its contracts with customers for digital distribution and publishing revenues. For each, the Company identified the type of customer contracts, identified its performance obligations under contracts, determined a transaction price, allocated the transaction price over the life of the contracts, and established revenue recognition policies for recognising revenue as its performance obligations are satisfied.

Digital distribution revenues are generated from royalties earned from streaming through third-party digital service providers (“DSP”) platforms. Digital distribution revenues are variable based on actual usage or consumption of the distributed content. Revenue is recognized based on usage reports provided by the DSP that confirm the applicable client’s usage for a given period, and the Company has rendered the agreed upon services with respect to such royalties.

Publishing revenues are earned from the receipt of royalties relating to the licensing of rights in musical compositions. The receipt of royalties principally relates to amounts earned from the public performance of musical compositions, the mechanical reproduction of musical compositions on recorded media including
digital formats and the use of musical compositions in synchronization with visual images. Publishing royalties, except for synchronization royalties, generally are recognized when the sale or usage occurs. The most common form of consideration for publishing contracts is sales and usage-based royalties. The collecting societies and DSPs submit usage reports, typically with payment for royalties due, often on a
quarterly or bi-annual reporting period, in arrears.

Royalty revenues are recognized when it is confirmed the applicable client's sale or usage occurs for a given period, and when the Company has rendered the agreed upon services to the client with respect to such royalties.

Royalty expense represents the portion of royalties collected from DSPs and other channels that are owed to the artists.
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.
Financial instruments
The company has only basic financial instruments.

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.

Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction.
Foreign currency translation
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss.
Publishing advances
The company regularly commits to and pays publishing advances to its clients in respect of future anticipated royalties. Unrecouped royalties at the end of the accounting period are included within Debtors on the company’s balance sheet. Publishing advances are recoupable from royalties arising in accordance with the terms specified in individual contracts and licence agreements. Un-recouped publishing advances will be reviewed on a regular basis to assess their recoverability. Where the directors anticipate that royalties from future revenue will be insufficient to fully recoup a publishing advance, provision will be made to write down
the carrying value of the advance to its estimated net recoupable amount.
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.
2 Audit information
The audit report is unqualified.
Senior statutory auditor: Mr Shaun Philpott
Firm: TAG Assurance Services Limited
Date of audit report: 30 September 2024
3 Employees 2023 2022
Number Number
Average number of persons employed by the company 1 2
4 Debtors 2023 2022
£ £
Amounts owed by group undertakings and undertakings in which the company has a participating interest 2,337,498 2,391,894
Other debtors 1,041,594 698,943
3,379,092 3,090,837
5 Creditors: amounts falling due within one year 2023 2022
£ £
Bank loans and overdrafts 792,321 526,919
Amounts owed to group undertakings and undertakings in which the company has a participating interest 3,087,242 3,214,186
Other creditors 14,036 2,287
3,893,599 3,743,392
6 Other information
Downtown Music Capital UK Ltd is a private company limited by shares and incorporated in England. Its registered office is:
7 Bell Yard
London
WC2A 2JR
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