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COMPANY REGISTRATION NUMBER: 06729435
Label Worx Limited
Financial Statements
For the year ended
31 December 2023
Label Worx Limited
Financial Statements
Year ended 31 December 2023
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
4
Independent auditor's report to the members
6
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15
Label Worx Limited
Officers and Professional Advisers
The board of directors
M Abbott
C Chambers
Company secretary
M Abbott
Registered office
61b Humber Street
Hull
East Yorkshire
England
HU1 1TU
Auditor
Streets Audit LLP
Chartered accountants & statutory auditor
Enterprise House
38 Tyndall Court
Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
PE2 6LR
Label Worx Limited
Strategic Report
Year ended 31 December 2023
Introduction The directors present their strategic report on the company for the year ended 31 December 2023. The principal activity of the company during the year continued to be that of digital music services for independent record labels. The company continued its expansion and experienced strong growth in the period. Business review Turnover of the financial year ended 31 December 2023 amounted to £33.5m (2022 - £34.7m) a decrease of 3.46% when compared to the year ended 31 December 2022. Profit before taxation increased from £1.6m in 2022 to £2m during the year under review. As at 31 December 2023 the balance sheet net assets were £1.3m (2022 - £1.3m) and cash at bank was £2.9m (2022 - £6.6m). Principal risks and uncertainties Business environment and market risks The company's revenues are concentrated within the digital music industry, which is both highly competitive and constantly subject to change. The digital nature of this space brings significant risks with regards to changes in end user consumption, new technologies and the emergence of new competitive products. The directors maintain very close links with the entire chain and continue to invest significant time and resource in its software platform to mitigate these risks. Credit risk The company is exposed to credit risk from potential default of its customers. This risk is minimised by most revenues being derived from well-established and market leading streaming platforms across a number of geographic markets where the risk of default is considered to be low. Liquidity risk The directors monitor liquid resources on an ongoing basis to ensure the operating needs of the business are met. This monitoring is especially directed at ensuring Royalty payments are met within contractual terms with no history of default. Research and development activities The directors are keenly aware of the ever-changing nature of the digital music space. To mitigate the inherent risks this brings, the company is constantly assessing and adapting its product offering. This expenditure is capitalised where the relevant criteria is met or otherwise written off to the profit and loss account. Financial key performance indicators The key performance indicators that the directors use to assess the performance of the business are turnover and profit before taxation. Future developments The directors aim to continue the growth of the business by using their experience in the industry to increase the number of labels for whom they distribute. The directors aim to continue to invest in the development of their platform.
This report was approved by the board of directors on 3 December 2024 and signed on behalf of the board by:
M Abbott
Director
Registered office:
61b Humber Street
Hull
East Yorkshire
England
HU1 1TU
Label Worx Limited
Directors' Report
Year ended 31 December 2023
The directors present their report and the financial statements of the company for the year ended 31 December 2023 .
Directors
The directors who served the company during the year were as follows:
M Abbott
C Chambers
Dividends
Particulars of recommended dividends are detailed in note 12 to the financial statements.
Disclosure of information in the strategic report
The company has chosen to set out in the strategic report information about the future developments of the company and the financial instruments.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 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; - 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 3 December 2024 and signed on behalf of the board by:
M Abbott
Director
Registered office:
61b Humber Street
Hull
East Yorkshire
England
HU1 1TU
Label Worx Limited
Independent Auditor's Report to the Members of Label Worx Limited
Year ended 31 December 2023
Opinion
We have audited the financial statements of Label Worx Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and the related notes, including a summary of 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 profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 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 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.
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. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have 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 strategic report or 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.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
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: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - 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 and sector in which it operates; - 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 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 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; - reading the minutes of meetings of those charged with governance; - enquiring of management as to actual and potential litigation and claims; and - reviewing correspondence with HMRC, relevant regulators and the company's legal advisors. 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. 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. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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 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 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.
Jonathan Day
(Senior Statutory Auditor)
For and on behalf of
Streets Audit LLP
Chartered accountants & statutory auditor
Enterprise House
38 Tyndall Court
Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
PE2 6LR
4 December 2024
Label Worx Limited
Statement of Comprehensive Income
Year ended 31 December 2023
2023
2022
Note
£
£
Turnover
4
33,536,428
34,673,928
Cost of sales
31,153,116
32,431,794
-------------
-------------
Gross profit
2,383,312
2,242,134
Administrative expenses
521,177
629,238
Other operating income
5
46,428
2,000
------------
------------
Operating profit
6
1,908,563
1,614,896
Other interest receivable and similar income
10
108,750
20,917
------------
------------
Profit before taxation
2,017,313
1,635,813
Tax on profit
11
456,797
314,220
------------
------------
Profit for the financial year and total comprehensive income
1,560,516
1,321,593
------------
------------
All the activities of the company are from continuing operations.
Label Worx Limited
Statement of Financial Position
31 December 2023
2023
2022
Note
£
£
Fixed assets
Intangible assets
13
113,441
78,441
Tangible assets
14
73,286
69,773
---------
---------
186,727
148,214
Current assets
Debtors
15
5,873,705
5,768,368
Investments
16
3,610,384
Cash at bank and in hand
2,900,896
6,583,063
-------------
-------------
12,384,985
12,351,431
Creditors: amounts falling due within one year
17
11,297,480
11,199,303
-------------
-------------
Net current assets
1,087,505
1,152,128
------------
------------
Total assets less current liabilities
1,274,232
1,300,342
Provisions
18
19,062
45,688
------------
------------
Net assets
1,255,170
1,254,654
------------
------------
Capital and reserves
Called up share capital
21
100
100
Profit and loss account
22
1,255,070
1,254,554
------------
------------
Shareholders funds
1,255,170
1,254,654
------------
------------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 3 December 2024 , and are signed on behalf of the board by:
M Abbott
Director
Company registration number: 06729435
Label Worx Limited
Statement of Changes in Equity
Year ended 31 December 2023
Called up share capital
Profit and loss account
Total
£
£
£
At 1 January 2022
100
1,552,961
1,553,061
Profit for the year
1,321,593
1,321,593
----
------------
------------
Total comprehensive income for the year
1,321,593
1,321,593
Dividends paid and payable
12
( 1,620,000)
( 1,620,000)
----
------------
------------
Total investments by and distributions to owners
( 1,620,000)
( 1,620,000)
At 31 December 2022
100
1,254,554
1,254,654
Profit for the year
1,560,516
1,560,516
----
------------
------------
Total comprehensive income for the year
1,560,516
1,560,516
Dividends paid and payable
12
( 1,560,000)
( 1,560,000)
----
------------
------------
Total investments by and distributions to owners
( 1,560,000)
( 1,560,000)
----
------------
------------
At 31 December 2023
100
1,255,070
1,255,170
----
------------
------------
Label Worx Limited
Statement of Cash Flows
Year ended 31 December 2023
2023
2022
£
£
Cash flows from operating activities
Profit for the financial year
1,560,516
1,321,593
Adjustments for:
Depreciation of tangible assets
44,131
76,424
Amortisation of intangible assets
65,000
106,330
Other interest receivable and similar income
( 108,750)
( 20,917)
Gains on disposal of intangible assets
( 8,806)
Tax on profit
456,797
314,220
Changes in:
Trade and other debtors
( 105,337)
( 156,682)
Trade and other creditors
98,177
632,437
------------
------------
Cash generated from operations
2,010,534
2,264,599
Interest received
108,750
20,917
Tax paid
( 483,423)
( 462,000)
------------
------------
Net cash from operating activities
1,635,861
1,823,516
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 47,644)
( 43,754)
Purchase of intangible assets
( 100,000)
( 4,000)
Proceeds from sale of intangible assets
13,208
Purchases of other investments
( 3,610,384)
------------
------------
Net cash used in investing activities
( 3,758,028)
( 34,546)
------------
------------
Cash flows from financing activities
Dividends paid
( 1,560,000)
( 1,620,000)
------------
------------
Net cash used in financing activities
( 1,560,000)
( 1,620,000)
------------
------------
Net (decrease)/increase in cash and cash equivalents
( 3,682,167)
168,970
Cash and cash equivalents at beginning of year
6,583,063
6,414,093
------------
------------
Cash and cash equivalents at end of year
2,900,896
6,583,063
------------
------------
Label Worx Limited
Notes to the Financial Statements
Year ended 31 December 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 61b Humber Street, Hull, East Yorkshire, HU1 1TU, England.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. Judgements and key sources of estimation uncertainty The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The judgements and accounting estimates that management have made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as disclosed in the accounting policies and notes to these financial statements. 1) Principal vs agent assessment Management assess the contractual agreements with its distributors and customers to establish whether the agreement constitutes a principal or an agency arrangement. This is a material judgement as the disclosure of revenue is significantly different. The company considers that online retailers are its customers as the company has no direct contact with the end users and once a product is provided to an online retailer (upon release) the company has satisfied all performance obligations associated with the agreements with these parties. If the company acted as agent, income would be recognised as net commissions received. Revenue recognition Turnover 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. Turnover is measured as the fair value of the consideration received or receivable, excluding Value Added Tax. Royalties are accounted for in the period in which they are earned. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered. Income tax The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all material timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference. Operating leases Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis. Goodwill Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years. Intangible assets Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
5 years
Development costs
-
3 years
Patents
-
10 years
Trademarks
-
5 years
Computer software
-
3 years
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Freehold property
-
25% straight line
Fixtures and fittings
-
25% straight line
Computer equipment
-
33% straight line
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Investments
Investment has been classified as a basic financial instrument and have been initially recognised as a financial asset at the transaction price.
Investment has been subsequently measured at fair value with any gains or losses recognised as profit and loss in the Statement of Comprehensive income.
Investment will be tested at least once a year, on the reporting date, for any possible impairment. Impairment will be recognised in profit and loss.
Investment will be derecognised when no future economic benefits are expected to flow to the entity.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
Financial instruments
The company holds basic financial instruments as defined in FRS102. The financial assets and financial liabilities of the company and their measurement basis are as follows: Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at amortised cost. Financial liabilities - trade creditors and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided.
4. Turnover
Turnover arises from:
2023
2022
£
£
Digital music revenue
33,105,412
34,223,972
LMS credit sales
55,411
72,875
Subscriptions & Services
182,518
183,709
Consultancy Fees
27,980
53,806
Physical ordering
64,984
42,965
Other income
100,123
96,601
-------------
-------------
33,536,428
34,673,928
-------------
-------------
Turnover by geographical area is as follows:
2023
2022
£
£
United Kingdom
2,177,448
2,516,291
Rest of Europe
21,825,079
21,430,236
Rest of world
9,232,497
10,727,401
Total
33,235,024
34,673,928
5. Other operating income
2023
2022
£
£
Other operating income
46,428
2,000
--------
-------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Amortisation of intangible assets
65,000
106,330
Depreciation of tangible assets
44,131
76,424
Gains on disposal of intangible assets
( 8,806)
--------
---------
7. Auditor's remuneration
2023
2022
£
£
Fees payable for the audit of the financial statements
10,972
17,500
--------
--------
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023
2022
No.
No.
Administrative staff
16
23
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
642,842
699,757
Social security costs
58,529
71,108
Other pension costs
12,890
15,111
---------
---------
714,261
785,976
---------
---------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
9,117
8,844
Company contributions to defined contribution pension plans
84
78
-------
-------
9,201
8,922
-------
-------
The number of directors who accrued benefits under company pension plans was as follows:
2023
2022
No.
No.
Defined contribution plans
1
1
----
----
10. Other interest receivable and similar income
2023
2022
£
£
Interest on cash and cash equivalents
74,228
20,917
Gain on financial instruments
34,522
---------
--------
108,750
20,917
---------
--------
11. Tax on profit
Major components of tax expense
2023
2022
£
£
Current tax:
UK current tax expense
483,423
337,758
Deferred tax:
Origination and reversal of timing differences
( 26,626)
( 23,538)
---------
---------
Tax on profit
456,797
314,220
---------
---------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is lower than (2022: higher than) the standard rate of corporation tax in the UK of 23.52 % (2022: 19 %).
2023
2022
£
£
Profit on ordinary activities before taxation
2,017,313
1,635,813
------------
------------
Profit on ordinary activities by rate of tax
474,483
310,804
Adjustment to tax charge in respect of prior periods
( 18,610)
Effect of expenses not deductible for tax purposes
572
3,198
Other differences leading to an increase in the tax charge
352
218
------------
------------
Tax on profit
456,797
314,220
------------
------------
12. Dividends
Dividends proposed before the year end and recognised as a liability:
2023
2022
£
£
Dividends on equity shares
1,560,000
1,620,000
------------
------------
13. Intangible assets
Goodwill
Development costs
Patents
Trademarks
Computer software
Total
£
£
£
£
£
£
Cost
At 1 Jan 2023
12,000
228,646
2,234
11,798
92,602
347,280
Additions
100,000
100,000
--------
---------
---------
--------
--------
---------
At 31 Dec 2023
12,000
228,646
102,234
11,798
92,602
447,280
--------
---------
---------
--------
--------
---------
Amortisation
At 1 Jan 2023
12,000
190,109
2,234
7,659
56,837
268,839
Charge for the year
35,576
5,000
2,234
22,190
65,000
--------
---------
---------
--------
--------
---------
At 31 Dec 2023
12,000
225,685
7,234
9,893
79,027
333,839
--------
---------
---------
--------
--------
---------
Carrying amount
At 31 Dec 2023
2,961
95,000
1,905
13,575
113,441
--------
---------
---------
--------
--------
---------
At 31 Dec 2022
38,537
4,139
35,765
78,441
--------
---------
---------
--------
--------
---------
14. Tangible assets
Freehold property
Fixtures and fittings
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2023
15,276
86,741
373,775
475,792
Additions
47,644
47,644
Write off
( 11,762)
( 172,625)
( 184,387)
--------
--------
---------
---------
At 31 December 2023
15,276
74,979
248,794
339,049
--------
--------
---------
---------
Depreciation
At 1 January 2023
15,276
85,232
305,511
406,019
Charge for the year
1,509
42,622
44,131
Write off
( 11,762)
( 172,625)
( 184,387)
--------
--------
---------
---------
At 31 December 2023
15,276
74,979
175,508
265,763
--------
--------
---------
---------
Carrying amount
At 31 December 2023
73,286
73,286
--------
--------
---------
---------
At 31 December 2022
1,509
68,264
69,773
--------
--------
---------
---------
15. Debtors
2023
2022
£
£
Trade debtors
357,937
166,343
Prepayments and accrued income
5,283,233
5,400,552
Other debtors
232,535
201,473
------------
------------
5,873,705
5,768,368
------------
------------
16. Investments
2023
2022
£
£
Other investments
3,610,384
------------
----
Investment in Wise savings/investment account measured at fair value through profit and loss.
17. Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
276,256
193,016
Accruals and deferred income
10,531,068
10,708,879
Social security and other taxes
345,662
187,622
Director loan accounts
247
Other creditors
144,247
109,786
-------------
-------------
11,297,480
11,199,303
-------------
-------------
18. Provisions
Deferred tax (note 19)
£
At 1 January 2023
45,688
Charge against provision
( 26,626)
--------
At 31 December 2023
19,062
--------
19. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
£
£
Included in provisions (note 18)
19,062
45,688
--------
--------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
£
£
Accelerated capital allowances
19,062
45,688
--------
--------
20. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 12,890 (2022: £ 15,111 ).
21. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary 'A' shares of £ 1 each
50
50
50
50
Ordinary 'B' shares of £ 1 each
50
50
50
50
----
----
----
----
100
100
100
100
----
----
----
----
All shares issued are non-redeemable and rank equally in terms of voting rights, rights to participate in all approved dividend distributions and the right to participate in any capital distribution on winding up.
22. Reserves
Profit and loss account - This reserve records retained earnings and accumulated losses.
23. Analysis of changes in net debt
At 1 Jan 2023
Cash flows
At 31 Dec 2023
£
£
£
Cash at bank and in hand
6,583,063
(3,682,167)
2,900,896
Debt due within one year
(247)
(247)
Current asset investments
3,610,384
3,610,384
------------
------------
------------
6,583,063
( 72,030)
6,511,033
------------
------------
------------
Label Worx Limited
Notes to the Financial Statements (continued)
Year ended 31 December 2023
24. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2023
2022
£
£
Not later than 1 year
10,000
20,000
--------
--------
25. Directors' advances, credits and guarantees
The company operated loan accounts with the directors. The director loaned £247 to the company during this year.
26. Related party transactions
At the year end directors loans had a balance of £247 (2022: loans to directors £Nil). The loans are interest free and have no set repayment terms. During the year the company charged consultancy fees to a company which the directors and shareholders of this company are also directors and shareholders. This amounted to £nil (2022: £14,844). At year end the balance owed by the connected party was £69,110 (2021: £104,558). During the year, total dividends of £1,560,000 (2022: £1,620,000) were paid to the shareholders, who are also the directors.
27. Controlling party
In the opinion of the directors there is no controlling party.