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Registered number: 14251101












FOLK COMMERCE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

 

FOLK COMMERCE LIMITED

CONTENTS



Page
Company information
 
1
Directors' report
 
2
Directors' responsibilities statement
 
3
Independent auditor's report
 
4 - 7
Profit and loss account
 
8
Balance sheet
 
9
Statement of changes in equity
 
10
Notes to the financial statements
 
11 - 25


 

FOLK COMMERCE LIMITED
 
COMPANY INFORMATION


Directors
C Kurtzke 
F Harrison 
R Rabin 
Together Group Studios Limited 
Together Group Ventures & Projects Limited 




Registered number
14251101



Registered office
North Suite Third Floor
32/34 Great Marlborough Street

London

W1F 7JB




Independent auditor
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor

16 Great Queen Street

Covent Garden

London

WC2B 5AH




Page 1

 

FOLK COMMERCE LIMITED

DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the period ended 31 December 2023. This is the first period since incorporation on 22 July 2022 and therefore there are no comparative figures to present.

Results and dividends

The loss for the period, after taxation, amounted to £184,877.

The directors have not declared a dividend during the period.

Directors

The directors who served during the period were:

C Kurtzke (appointed 22 July 2022)
F Harrison (appointed 30 December 2023)
R Rabin (appointed 30 December 2023)
Together Group Studios Limited (appointed 30 December 2023)
Together Group Ventures & Projects Limited (appointed 30 December 2023)

Disclosure of information to auditor

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditor is aware of that information.

Small companies note

In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





R Rabin
Director

Date: 30 October 2024

Page 2

 

FOLK COMMERCE LIMITED
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2023

The directors are responsible for preparing the directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. 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 judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Page 3

 

FOLK COMMERCE LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FOLK COMMERCE LIMITED
 FOR THE PERIOD ENDED 31 DECEMBER 2023

Opinion


We have audited the financial statements of Folk Commerce Limited (the 'company') for the period ended 31 December 2023, which comprise the profit and loss account, the balance sheet, the statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (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 period 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.


Basis for opinion


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 United Kingdom, including the Financial Reporting Council'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.


Page 4

 

FOLK COMMERCE LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FOLK COMMERCE LIMITED (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Other information


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 reportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.


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 directors' report.


We have nothing to report in respect of the following matters in relation to which 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the directors' report and from the requirement to prepare a strategic report.


Responsibilities of directors
 

As explained more fully in the directors' responsibilities statement set out on page 3, 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.


Page 5

 

FOLK COMMERCE LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FOLK COMMERCE LIMITED (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

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:
 
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; 
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the company's sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, and taxation and employment legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
 
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
 
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
 
To address the risk of fraud through management bias and override of controls we:
 
performed analytical procedures to identify any unusual or unexpected relationships;
tested a sample of journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
 
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
 
agreeing financial statement disclosures to underlying supporting documentation; and
enquiring of management as to actual and potential litigation and claims.
 
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
 
Page 6

 

FOLK COMMERCE LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FOLK COMMERCE LIMITED (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Auditor's responsibilities for the audit of the financial statements (continued)
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they
may involve deliberate concealment or collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.


Use of our 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 2006Our 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.





Thomas Dickinson (senior statutory auditor)
  
for and on behalf of
Blick Rothenberg Audit LLP
 
Chartered Accountants
Statutory Auditor
  
16 Great Queen Street
Covent Garden
London
WC2B 5AH

 
Date: 
30 October 2024
Page 7

 

FOLK COMMERCE LIMITED
 
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 DECEMBER 2023

Period ended
31 December
2023
£

  

Turnover
  
985,098

Cost of sales
  
(432,179)

Gross profit
  
552,919

Administrative expenses
  
(748,305)

Operating loss
  
(195,386)

Interest receivable and similar income
  
48

Loss before taxation
  
(195,338)

Tax on loss
  
10,461

Loss for the financial period
  
(184,877)

The profit and loss account has been prepared on the basis that all activities are continuing operations.
There are no items of other comprehensive income for the period other than the loss for the period. Accordingly, no statement of other comprehensive income has been presented.

Page 8


 
REGISTERED NUMBER:14251101
FOLK COMMERCE LIMITED

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
Note
£

Fixed assets
  

Intangible assets
 9 
71,665

Tangible assets
 10 
8,368

Investments
 11 
100

  
80,133

Current assets
  

Debtors: amounts falling due within one year
 12 
115,153

Cash at bank and in hand
  
47,837

  
162,990

Creditors: amounts falling due within one year
 13 
(427,999)

Net current (liabilities)/assets
  
 
 
(265,009)

  

Net (liabilities)/assets
  
(184,876)


Capital and reserves
  

Called up share capital 
 15 
1

Profit and loss account
 16 
(184,877)

Total equity
  
(184,876)




The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




R Rabin
Director

Date: 30 October 2024

The notes on pages 11 to 25 form part of these financial statements.

Page 9

 

FOLK COMMERCE LIMITED

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£

At 22 July 2022
-
-
-



Loss for the period
-
(184,877)
(184,877)

Shares issued during the period
1
-
1


At 31 December 2023
1
(184,877)
(184,876)

The notes on pages 11 to 25 form part of these financial statements.

Page 10

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

1.


General information

Folk Commerce Limited is a private company limited by shares and is incorporated in England and Wales. The registered office and principal place of business is North Suite Third Floor, 32/34 Great Marlborough Street, London, United Kingdom, W1F 7JB.
The company's principal activity consist of the provision of social media marketing services.
The company is presenting its accounts for the 17 month period from incorporation on 22nd July 2022 until 31 December 2023. As this is the first period of account there is no comparative information to present.
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework'  and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).

The company was, at the end of the year, a wholly-owned subsidiary of Together Group Studios Limited, whose registered address is North Suite Third Floor, 32/34 Great Marlborough Street, London, United Kingdom, W1F 7JB. The ultimate parent undertaking and for which group financial statements are drawn up and of which the company is a member is Together Group Holdings PLC, whose registered office is at North Suite Third Floor, 32/34 Great Marlborough Street, London, United Kingdom, W1F 7J.

The following principal accounting policies have been applied:

Page 11

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.2

Financial Reporting Standard 101 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of IFRS 7 Financial Instruments: Disclosures
the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers
the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
 - paragraph 79(a)(iv) of IAS 1;
 - paragraph 73(e) of IAS 16 Property, Plant and Equipment;
 - paragraph 118(e) of IAS 38 Intangible Assets;
the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements
the requirements of IAS 7 Statement of Cash Flows
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member

This information is included in the consolidated financial statements of Together Group Holdings PLC as at 31 December 2023 and these financial statements may be obtained from Companies House.

 
2.3

Going concern

The directors of the controlling entity, Together Group Holdings Plc, have prepared forecasts until 31 December 2025 which show that the Group will have sufficient cash available from a combination of existing facilities and generated from its principal trading activity in order to settle liabilities in the due course of business and will maintain compliance with covenants with the borrowing facilities (a $55m borrowing facility entered into on 7 April 2023 which is due for repayment in quarterly instalments commencing on 31 March 2025 and a $65m borrowing facility entered into on 19 May 2024 which is due for repayment on 19 October 2029). 
Group management has performed sensitivity analysis on these forecasts which show that if growth, which is forecast by the Group’s acquired agencies, were not achieved in the timeframe which is expected the Group would continue to maintain compliance with its borrowing covenants.
The directors of the company have received a letter of support from the controlling entity, Together Group Holdings Plc, which confirms that it will provide financial support to the company for a period of at least twelve months from the date of approval of the financial statements if it were necessary.
Accordingly, the directors have prepared the financial statements on the going concern basis, notwithstanding the fact that the company has a deficiency on total equity at the end of the year, having assessed that the Group and the company has a reasonable expectation of continuing to settle liabilities as they fall due for a period of at least twelve months from the date of approval of the financial statements.

Page 12

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from providing services is recognised in the accounting period in which the services are rendered. Revenue is adjusted for amounts invoiced to customers in advance or arrears at both the beginning and end of the year, such that the revenue is recognised in line with the performance obligations under the contract.

Amounts invoiced to customers in advance of services being provided are included within creditors until the promised services are transferred to the customer. Services provided to customers in advance of being invoiced are recognised within receivables until the invoices are raised to the customer. The company does not expect to have any contracts where the period between the transfer of the promised services to the customer and payment by the customer exceeds one year. As a consequence, the company does not adjust any of the transaction prices for the time value of money.

 
2.5

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is Sterling (£).

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.

Foreign exchange gains and losses are presented in profit or loss within 'administrative expenses'.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 13

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.7

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

 
2.8

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
Current tax is the amount of income tax payable in respect of taxable profit for the year or prior years.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.

Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
 
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.9

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 14

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

 The estimated useful lives range as follows:

Brands
-
5
years

 
2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Computer equipment
-
3 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.12

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.13

Cash

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

  
2.14

Share capital

Ordinary shares are classified as equity. 

Page 15

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.15

Financial instruments

The company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The company's accounting policies in respect of financial instruments transactions are explained below:
Financial assets and financial liabilities are initially measured at fair value.
Financial assets
All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.
Trade and other receivables
Trade and other receivables where payment is due within one year do not constitute a financing transaction and are recorded at the undiscounted amount expected to be received, less attributable transaction costs. Any subsequent impairment is recognised as an expense in profit or loss. If payment is due after more than one year or if there is any other indication of a financing transaction, trade and other receivables are recorded initially at fair value less attributable transaction costs. In this situation, fair value is equal to the amount expected to be received, discounted at a market related interest rate.
All trade and other receivables are subsequently measured at amortised cost, net of impairment.
Impairment and write-offs
The company makes an estimate of the recoverable value of trade and other receivables. When assessing impairment of trade and other receivables, management considers factors including the credit rating of the receivable, the ageing profile of receivables and historical experience. The company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected credit loss allowance for all trade receivables. See note 12 for the net carrying amount of the receivables and associated impairment provision.
The company writes off a receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case of trade receivables, when the amounts are over one year past due, whichever occurs sooner. Financial assets written off are still subject to enforcement activities. Any recoveries made are recognised in the profit or loss.
Financial liabilities
Trade and other payables
Trade and other payables are initially recognised at fair value less attributable transaction costs. They are subsequently measured at amortised cost.

Page 16

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments, estimates and assumptions on historical experience and on other various factors, including expectations of future events, that management believes to be reasonable under the circumstances. The resulting accounting judgments and estimates will seldom equal the related actual results. The judgments, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
Impairment of trade receivables
The company makes an estimate of the recoverable value of trade and other receivables. When assessing impairment of trade and other receivables, management considers factors including the credit rating of the receivable, the ageing profile of receivables and historical experience. The company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected credit loss allowance for all trade receivables. See note 12 for the net carrying amount of the receivables and associated impairment provision.
Impairment of intangible fixed assets
The company makes an estimate of the recoverable value of the brand recognised in intangible fixed assets on the balance sheet of the company. Where the assessed recoverable value of the asset is lower than the carrying value an impairment is recognised. The recoverable value of the intangible is assessed by the company based on the anticipated impact the brand will have on the cashflow generation of the company. In making this assessment the company has made assumptions in respect of future growth of the entity, customer lead generation and resulting free cash flow of these sales. See note 9 for the net carrying amount of the intangible fixed assets.

Page 17

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


Period ended
31 December
2023
£

Retainer revenue
728,529

Production revenue
197,669

Other project fees
57,600

Commission
1,300

985,098


Analysis of turnover by country of destination:

Period ended
31 December
2023
£

United Kingdom
569,098

Rest of Europe
20,000

Rest of the world
396,000

985,098


Page 18

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

5.


Operating loss

The operating loss is stated after charging:

Period ended
31 December
2023
£

Depreciation of tangible fixed assets
1,085

Amortisation of intangible assets, including goodwill
28,335

Fees payable to the company's auditor for the audit of the company's
financial statements
18,868

Exchange differences
1,490

Defined contribution pension cost
1,948

The company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent company.


6.


Employees

Period ended
31 December
2023
£

Wages and salaries
213,526

Social security costs
7,413

Cost of defined contribution scheme
1,948

222,887


The average monthly number of employees, including the directors, during the period was as follows:


     Period ended
     31 December
        2023
            No.






Directors
1



Employees
1

2

Page 19

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

7.


Directors' remuneration

Period ended
31 December
2023
£

Directors' emoluments
120,186

120,186



8.


Taxation


Period ended
31 December
2023
£



Total current tax
-

Deferred tax


Tax losses carried forward
(10,461)

Total deferred tax
(10,461)


Tax on loss
(10,461)
Page 20

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
 
8.Taxation (continued)


Factors affecting tax charge for the period

The tax assessed for the period is lower than the standard rate of corporation tax in the UK of 19%. From 1 April 2023 the corporation tax rate would increase to 25% for companies with profits of over £250,000. A small profits rate was also introduced for companies with profits of £50,000 or less so that they will continue to pay corporation tax at 19%. From this date companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective corporation tax rate. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements. The differences are explained below:

Period ended
31 December
2023
£


Loss on ordinary activities before tax
(195,338)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19%
(37,114)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
4,036

Capital allowances for period in excess of depreciation
(1,723)

Tax losses carried forward
(10,461)

Group relief
34,801

Total tax charge for the period
(10,461)


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 21

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

9.


Intangible assets



Brands

£



Cost


Additions
100,000



At 31 December 2023

100,000



Amortisation


Charge for the period on owned assets
28,335



At 31 December 2023

28,335



Net book value



At 31 December 2023
71,665

Intangible fixed assets comprise a brand acquired during the period for consideration of £100,000. The brand is being amortised over 5 years and at the balance sheet date has approximately 3.5 years remaining.





10.


Tangible fixed assets





Computer equipment

£



Cost


Additions
9,453



At 31 December 2023

9,453



Depreciation


Charge for the period on owned assets
1,085



At 31 December 2023

1,085



Net book value



At 31 December 2023
8,368

Page 22

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

11.


Fixed asset investments





Investments in subsidiary companies

£



Cost


Additions
100



At 31 December 2023
100





12.


Debtors

2023
£


Trade debtors
79,597

Other debtors
13,153

Prepayments and accrued income
11,942

Deferred taxation
10,461

115,153


Trade debtors are stated after provisions for expected credit losses of £nil.
Amounts owed by group undertakings are unsecured, interest-free, have no fixed date for repayment and are repayable on demand. They are stated after provisions for expected credit losses of £nil.


13.


Creditors: Amounts falling due within one year

2023
£

Trade creditors
28,951

Amounts owed to group undertakings
125,256

Other taxation and social security
17,334

Other creditors
137,674

Accruals and deferred income
118,784

427,999


Amounts owed to group undertakings are unsecured, interest free, have no fixed date for repayment and are repayable on demand.

Page 23

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

14.


Deferred taxation



2023


£






Charged to profit or loss
10,461



At end of year
10,461

The deferred tax asset is made up as follows:

2023
£


Tax losses carried forward
10,461

10,461


15.


Share capital

2023
£
Allotted, called up and fully paid


120 Ordinary shares of £0.01 each
1


120 Ordinary £0.01 shares were issued upon incorporation on 22 July 2022 at par.
There is a single class of Ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.


16.


Reserves

Profit and loss account

The profit and loss account includes all current period retained profits and losses.


17.


Contingent liabilities

The company's assets have been secured against bank borrowings of a group undertaking. The company is a cross guarantor for borrowings of a group undertaking. The balance at the period end was $55,000,000.

Page 24

 

FOLK COMMERCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

18.


Pension commitments

The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension expense represents contributions payable by the company to the fund during the year and amounted to £1,948. Contributions totalling £1,294 were payable to the fund at the reporting date and are included in other creditors.


19.


Commitments under leases

At 31 December 2023 the company had future minimum lease payments due under non-cancellable short-term leases for each of the following periods:

2023
£


Not later than 1 year
8,540


20.


Related party transactions

As permitted by FRS 101, the company has taken advantage of the exemption contained in IAS 24 Related Party Disclosures not to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly-owned by such a member.
At the balance sheet date the company owed directors amounts totalling £10,956.


21.


Controlling party

The immediate parent undertaking is Together Group Studios Limited. The parent's registered office is North Suite Third Floor, 32/34 Great Marlborough Street, London, England, W1F 7JB.
The ultimate parent undertaking and for which group financial statements are drawn up and of which the company is a member is Together Group Holdings PLC, whose registered office is at North Suite Third Floor, 32/34 Great Marlborough Street, London, England, W1F 7JB. Copies of the group financial statements are available to the public from Companies House, Crown Way, Cardiff, CF14 3UZ.

 
Page 25