Company registration number 09134929 (England and Wales)
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2023
Directors
Ms D Lipa
Mr D Lipa
Company number
09134929
Registered office
88/90 Baker Street
London
W1U 6TQ
Auditor
Turpin Barker Armstrong
Chartered Certified Accountants
Allen House
1 Westmead Road
Sutton
Surrey
SM1 4LA
Accountants
Dales Evans & Co Limited
Chartered Accountants
88/90 Baker Street
London
W1U 6TQ
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
CONTENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page
Strategic report
1
Directors' report
2
Independent auditor's report
3 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Fair review of the business

The company is principally engaged in the promotion and exploitation of various services and productions of the artist known as Dua Lipa. In assessing the performance of the company, the directors consider that success is determined by the level of turnover from which the company derives its profit and hence the company's key performance indicators are considered to be the level of turnover and the net profit margin for the year.

 

During the year, turnover increased by 27% from the previous year which led to an increase in profit before tax. This can be attributed to an increase in sponsorship and artist endorsements. Despite the increase in turnover, the net proft margin for the year decreased by 6%. This was mostly due to an increase in the cost of sales for the upcoming release of the artist's third studio album which was not released until after the year end.

 

The new album, Radical Optimism was released on 3rd May 2024. As a result, it is anticipated that the company will generate similar income for the year ended 31 December 2024 and in the years thereafter.

Principal risks and uncertainties

The company uses a variety of financial instruments including cash deposits arising from its operations and current asset investments. The main purpose of these financial instruments is to provide working capital for the company's operations. Given the nature of the company's operations and the financial instruments in existence the company is exposed to very limited credit or liquidity risk.

 

Credit risk

The principal credit risk arises from its debtors. In order to manage the credit risk associated with this the directors review payment plans on a regular basis.

 

Liquidity risk

The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

Development and performance

The directors believe that the gross core income from royalties, sponsorship and endorsement income will continue to be generated in the immediate future at a satisfactory level.

Key performance indicators

The directors use many key performance indicators to monitor the performance of the company. They regard the following as the key financial indicators of performance, all of which can be observed in the attached financial statements.

 

Turnover: £18,664,479 (2022: £14,678,899)

Profit before tax: £13,783,323 (2022: £11,694,005)

Net profit margin: 74% (2022: 80%)

 

The net profit margin is calculated as a percentage of profit before tax over turnover.

 

The net profit margin has decreased when compared with the prior year, however this was in line with the directors' expectations and they are satisfied with the overall results for the year. The directors' expect the performance of the company to be comparable in the following year as a result of similar activity within artist sponsorships and royalty distributions.

On behalf of the board

24 December 2024
Mr D Lipa
Date
Director
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Ms D Lipa
Mr D Lipa
Results and dividends

The results for the year are set out on page 7.

Dividends of £1,000 were paid during the year (2022: £4,000).

Auditor

Turpin Barker Armstrong were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the annual 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
24 December 2024
Mr D Lipa
Date
Director
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
- 3 -
Opinion

We have audited the financial statements of Radical22 Limited (formerly known as Radical 22 Limited) (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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:

 

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 contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

 

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
- 4 -
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:

 

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:

 

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

Identifying and assessing the potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

 

 

 

 

 

 

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
- 5 -

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we also consider specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, FRS102, and UK tax legislation.

Audit response to risks identified

Our procedures to respond to risks identified as a result of performing the above included the following:

 

 

 

 

 

 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit

 

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

 

 

 

 

 

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
- 6 -

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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

24 December 2024
David Alan Payne BA (Hons) FCA
Date
(Senior Statutory Auditor)
For and on behalf of Turpin Barker Armstrong
Chartered Certified Accountants
Statutory Auditor
Allen House
1 Westmead Road
Sutton
Surrey
SM1 4LA
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
as restated
Notes
£
£
Turnover
3
18,664,479
14,678,899
Cost of sales
(3,901,824)
(765,151)
Gross profit
14,762,655
13,913,748
Administrative expenses
(2,527,313)
(1,211,091)
Operating profit
4
12,235,342
12,702,657
Interest receivable and similar income
8
699,859
350,104
Interest payable and similar expenses
9
(11,481)
(24)
Profit/(loss) on disposal of investments
7,873
34,387
Value gains/(losses) on investments
13
851,730
(1,393,119)
Profit before taxation
13,783,323
11,694,005
Tax on profit
10
(3,349,781)
(2,105,546)
Profit for the financial year
10,433,542
9,588,459
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
12
16,921
5,289
Investment property
13
1,585,336
1,585,336
Investments
14
14,280,536
13,769,203
15,882,793
15,359,828
Current assets
Debtors
15
19,936,373
11,276,233
Investments
16
5,720,577
5,720,187
Cash at bank and in hand
13,518,194
9,842,222
39,175,144
26,838,642
Creditors: amounts falling due within one year
17
(13,228,119)
(11,137,393)
Net current assets
25,947,025
15,701,249
Total assets less current liabilities
41,829,818
31,061,077
Provisions for liabilities
Deferred tax liability
18
153,431
(182,768)
(153,431)
182,768
Net assets
41,676,387
31,243,845
Capital and reserves
Called up share capital
20
2
2
Profit and loss reserves
41,676,385
31,243,843
Total equity
41,676,387
31,243,845

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 24 December 2024 and are signed on its behalf by:
Mr D Lipa
Director
Company registration number 09134929 (England and Wales)
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
2
21,659,384
21,659,386
Year ended 31 December 2022:
Profit and total comprehensive income
-
9,588,459
9,588,459
Dividends
11
-
(4,000)
(4,000)
Balance at 31 December 2022
2
31,243,843
31,243,845
Year ended 31 December 2023:
Profit and total comprehensive income
-
10,433,542
10,433,542
Dividends
11
-
(1,000)
(1,000)
Balance at 31 December 2023
2
41,676,385
41,676,387
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
4,055,027
2,150,091
Interest paid
(11,481)
(24)
Income taxes paid
(2,425,249)
(1,370,949)
Net cash inflow from operating activities
1,618,297
779,118
Investing activities
Purchase of tangible fixed assets
(17,867)
(2,523)
Purchase of investment property
-
0
(1,585,336)
Proceeds from disposal of investments
347,880
(6,146,424)
Repayment of loans
1,028,803
43,810
Interest received
204,900
42,676
Dividends received
117,327
106,986
Other income received from investments
377,632
200,442
Net cash generated from/(used in) investing activities
2,058,675
(7,340,369)
Financing activities
Dividends paid
(1,000)
(4,000)
Net cash used in financing activities
(1,000)
(4,000)
Net increase/(decrease) in cash and cash equivalents
3,675,972
(6,565,251)
Cash and cash equivalents at beginning of year
9,842,222
16,407,473
Cash and cash equivalents at end of year
13,518,194
9,842,222
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

Radical22 Limited (formerly known as Radical 22 Limited) is a private company limited by shares incorporated in England and Wales. The registered office is 88/90 Baker Street, London, W1U 6TQ.

 

The Company's principal activities continued to be that of audio, sponsorship and artist endorsement activites relating to the artist, Dua Lipa.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound.

The financial statements have been prepared under the historical cost convention, modified to include the financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Revenue is measured at the fair value of the consideration received or receivable and represents amounts for services provided net of discounts and VAT.

 

Income from services is recognised when they are performed and entitlement has arisen under the terms of the contract.

 

Performance fees are recognised on the date of the performance.

 

Royalties are recognised on receipt or as rights are utilised on an accruals basis where sufficient reliable information is available.

 

Rental income is recognised on an accruals basis under the terms of the lease.

1.4
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 of assets less their estimated residual values over their useful lives on the following bases:

Plant and machinery
20% per annum straight line
1.5
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

1.6
Fixed asset investments

Interests in listed shares and investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in profit or loss. Transaction costs are expensed to profit or loss as incurred.

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.

1.8
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.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including a group of managed investments and investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

 

The fair value of financial assets traded on active liquid markets are determined by reference to quoted market prices.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, 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, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.10
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.

1.11
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.

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.

1.12
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.

1.13
Retirement benefits

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

1.14
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.

1.15
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.

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.16

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

2
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Investment property

Management has applied judgement in evaluating the fair value of the investment property. This judgement is based on a review of the property prices and sales in the area.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Recording advances and royalties
3,890,511
5,509,845
Publishing advances and royalties
1,984,983
2,784,687
Sponsorship, endorsement and other income
12,650,530
5,820,923
Merchandise income and royalties
97,229
563,444
Rental income
41,226
-
18,664,479
14,678,899
2023
2022
£
£
Other revenue
Interest income
582,532
243,118
Dividends received
117,327
106,986

The turnover and profit before tax are attributable to the promotion and exploitation of various services and productions of Dua Lipa. Given the nature of the company's activities, any analysis of turnover between different geographical markets is impracticable to determine and would in any case be of little meaning or relevance.

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
6,235
2,661
Operating lease charges
85,113
-
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,000
-
0
6
Employees

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

2023
2022
Number
Number
6
4

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
323,543
241,837
Social security costs
33,796
24,098
Pension costs
5,037
2,960
362,376
268,895
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
9,100
9,035
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
178,079
14,083
Other interest income
404,453
229,035
Total interest revenue
582,532
243,118
Other income from investments
Dividends received
117,327
106,986
Total income
699,859
350,104
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
204,900
42,676
Interest on financial assets measured at fair value through profit or loss
377,632
200,442
Dividends from financial assets measured at fair value through profit or loss
117,327
106,986
9
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Other interest
11,481
24
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
2,991,510
2,383,536
Adjustments in respect of prior periods
2,242
-
0
Total UK current tax
2,993,752
2,383,536
Foreign current tax on profits for the current period
19,829
3,078
Total current tax
3,013,581
2,386,614
Deferred tax
Origination and reversal of timing differences
336,200
(281,068)
Total tax charge
3,349,781
2,105,546
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 18 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and a hybrid rate of tax as follows:

2023
2022
£
£
Profit before taxation
13,783,323
11,694,005
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
3,241,838
2,221,861
Tax effect of expenses that are not deductible in determining taxable profit
8,626
1,424
Change in unrecognised deferred tax assets
336,200
(281,068)
Adjustments in respect of prior years
2,242
-
0
Effect of change in corporation tax rate
70
-
0
Permanent capital allowances in excess of depreciation
(4,386)
(623)
Depreciation on assets not qualifying for tax allowances
1,466
506
Effect of revaluations of investments
(210,532)
183,773
Other permanent differences
1,852
-
0
Dividend income
(27,595)
(20,327)
Taxation charge for the year
3,349,781
2,105,546

A hybrid tax rate of 23.52% has been used to reflect the two different tax rates charged on profits for the year. Profits for the period 1 January 2023 to 31 March 2023 were taxed at 19% and profits for the period 1 April 2023 to 31 December 2023 were taxed at 25%.

11
Dividends
2023
2022
£
£
Interim paid
1,000
4,000
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Tangible fixed assets
Plant and machinery
Studio
Total
£
£
£
Cost
At 1 January 2023
13,307
52,010
65,317
Additions
17,867
-
0
17,867
At 31 December 2023
31,174
52,010
83,184
Depreciation and impairment
At 1 January 2023
8,018
52,010
60,028
Depreciation charged in the year
6,235
-
0
6,235
At 31 December 2023
14,253
52,010
66,263
Carrying amount
At 31 December 2023
16,921
-
0
16,921
At 31 December 2022
5,289
-
0
5,289
13
Investment property
2023
£
Fair value
At 1 January 2023 and 31 December 2023
1,585,336

The purchase of the investment property was completed on 7th December 2022 in an arms length transaction. The director's believe that the purchase cost still reflects the fair value of the property as at 31 December 2023.

 

14
Fixed asset investments
2023
2022
£
£
Other investments other than loans
14,280,536
13,769,203
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Fixed asset investments
(Continued)
- 20 -
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 January 2023
13,769,203
Fair value losses through profit and loss
851,342
Disposals
(340,009)
At 31 December 2023
14,280,536
Carrying amount
At 31 December 2023
14,280,536
At 31 December 2022
13,769,203
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,645,527
1,509,411
Other debtors
6,188,443
5,146,118
Prepayments and accrued income
10,102,403
4,620,704
19,936,373
11,276,233

Included within the company accrued income is an amount of £51,863 (2022: £nil) due from related parties in respect of recharged expenses.

16
Current asset investments
2023
2022
£
£
Unlisted investments
5,720,577
5,720,187
17
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
100,128
415,295
Corporation tax
1,639,627
1,051,294
Other taxation and social security
-
0
374,201
Other creditors
2,141,471
53,843
Accruals and deferred income
9,346,893
9,242,760
13,228,119
11,137,393

Included within accruals is an amount of £3,214,085 (2022: £nil) due to related parties in respect of management commission and recharged expenses.

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
4,230
1,005
Investments
149,201
(183,773)
153,431
(182,768)
2023
Movements in the year:
£
Asset at 1 January 2023
(182,768)
Charge to profit or loss
336,199
Liability at 31 December 2023
153,431

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
19
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Dec 2022
£
£
£
Current assets
Debtors due within one year
9,502,869
1,773,364
11,276,233
Creditors due within one year
Taxation
(1,119,966)
(305,529)
(1,425,495)
Other creditors
(9,546,581)
(165,317)
(9,711,898)
Net assets
29,941,327
1,302,518
31,243,845
Capital and reserves
Profit and loss reserves
29,941,325
1,302,518
31,243,843
Reconciliation of changes in equity
1 January
31 December
2022
2022
£
£
Adjustments to prior year
Accrue sponsorship income for 2022
-
1,773,364
Accrue consultancy fees for 2022
-
(165,317)
Additional corporation tax liability 2022
-
(305,529)
Total adjustments
-
1,302,518
Equity as previously reported
21,659,386
29,941,327
Equity as adjusted
21,659,386
31,243,845
Analysis of the effect upon equity
Profit and loss reserves
-
1,302,518
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
21
Reserves
Own shares

Called up share capital represents the nominal value of the shares that have been issued.

22
Reserves
Profit and loss reserves

Profit and loss account includes all current and prior period distributable retained profits and losses.

RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
23
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
173,536
-
0
Between two and five years
173,536
-
0
347,072
-
0
Lessor

The operating lease relates to a lease of the company's investment property to third parties. The leases are negotiated over terms of 4 years and rentals are fixed for 2 years. There are no options in place for either party to extend the lease terms.

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2023
2022
£
£
Within one year
27,483
-
0
Between two and five years
51,940
-
0
79,423
-
0
24
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Purchases
Purchases
2023
2022
£
£
Other related parties
1,136,636
-
0

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Other related parties
684,392
-
0

The following loans were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Other related parties
5,750,556
3,821,643
RADICAL22 LIMITED (FORMERLY KNOWN AS RADICAL 22 LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
25
Directors' transactions
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Loan
2.25
1,288,181
1,462,634
23,119
(2,514,556)
259,378
1,288,181
1,462,634
23,119
(2,514,556)
259,378

Included within accrued income is an amount of £12,529 (2022: £17,728) for interest charged on the director's loan.

26
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
10,433,542
9,588,459
Adjustments for:
Taxation charged
3,349,781
2,105,546
Finance costs
11,481
24
Investment income
(699,859)
(350,104)
Depreciation and impairment of tangible fixed assets
6,235
2,661
Other gains and losses
(859,603)
1,358,732
Movements in working capital:
Increase in debtors
(9,688,943)
(6,247,942)
Increase/(decrease) in creditors
1,502,393
(4,307,285)
Cash generated from operations
4,055,027
2,150,091
27
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
9,842,222
3,675,972
13,518,194
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