Company registration number 06460702 (England and Wales)
THE STATE51 CONSPIRACY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
THE STATE51 CONSPIRACY LIMITED
COMPANY INFORMATION
Director
P Sanders
Secretary
P Sanders
Company number
06460702
Registered office
8-10 Rhoda Street
London
E2 7EF
Auditor
Hardwick & Morris LLP
41 Great Portland Street
London
W1W 7LA
THE STATE51 CONSPIRACY LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2
Director's responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 20
THE STATE51 CONSPIRACY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The director presents the strategic report for the year ended 31 March 2024.
Review of the business
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| | | |
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Gross Profit Administrative expenses Net Profit/(loss) | 2,408,869 2,556,053 (329,936) | 1,582,704 1,244,247 214,869 | |
This year we made significant progress as we reshaped the organisation and our activities to be better adapted to the changes in the music industry. In particular we saw our work on rights management for UGC start to deliver results.
Alongside our work in the digital music markets we continued to build our capabilities and reputation for the design and production of physical products.
Our strategy remains to build an independent, international music company with capabilities that are broad, coordinated, and well adapted to the market. This will require significant investment in technology, and in our facilities and our design and production team. We see a need for a company that can do almost everything needed to create, exploit, and distribute music efficiently and at very high quality.
Principal risks and uncertainties
While most of the impact from the pandemic has passed, we are still needing to adapt to changed working patterns, and the technical, organisation, and security implications arising.
The Russian invasion of Ukraine continues to disrupt trade and payments, and has led to heightened concerns in the financial systems about money laundering and sanctions. Some markets are effectively closed to us.
Key performance indicators
The key performance indicators of the Company are turnover and gross margins, which reflect the success of our licenced rights and our exposure to this success.
P Sanders
Director
10 March 2025
THE STATE51 CONSPIRACY LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
The director presents his annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of digital music retail and management.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
P Sanders
Auditor
In accordance with the company's articles, a resolution proposing that Hardwick & Morris LLP be reappointed as auditor of the company will be put at a General Meeting.
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
P Sanders
Director
10 March 2025
THE STATE51 CONSPIRACY LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements 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 director is 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. He is 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.
THE STATE51 CONSPIRACY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE STATE51 CONSPIRACY LIMITED
- 4 -
Opinion
We have audited the financial statements of The state51 Conspiracy Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its loss for the year 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.
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 director's 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 director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
THE STATE51 CONSPIRACY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE STATE51 CONSPIRACY LIMITED (CONTINUED)
- 5 -
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 director's 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to industry sector regulations and unethical and prohibited business practices, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and UK Tax Legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Appropriate audit procedures in response to these risks were carried out. These procedures included:
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;
Reading minutes of meetings of those charged with governance;
Obtaining and reading correspondence from legal and regulatory bodies including HMRC;
Identifying and testing journal entries;
Challenging assumptions and judgements made by management in their significant accounting estimates.
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 non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
THE STATE51 CONSPIRACY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE STATE51 CONSPIRACY LIMITED (CONTINUED)
- 6 -
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.
Stephanie Hardwick FCA
Senior Statutory Auditor
For and on behalf of Hardwick & Morris LLP
10 March 2025
Chartered Accountants
Statutory Auditor
41 Great Portland Street
London
W1W 7LA
THE STATE51 CONSPIRACY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
20,605,623
18,204,451
Cost of sales
(18,196,754)
(16,621,747)
Gross profit
2,408,869
1,582,704
Distribution costs
(167,749)
(122,335)
Administrative expenses
(2,556,053)
(1,244,247)
Operating (loss)/profit
4
(314,933)
216,122
Interest receivable and similar income
6
1
(Loss)/profit before taxation
(314,933)
216,123
Tax on (loss)/profit
7
(15,003)
(1,254)
(Loss)/profit for the financial year
(329,936)
214,869
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE STATE51 CONSPIRACY LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
8
108,367
172,158
Tangible assets
9
26,112
14,142
Investments
10
1
1
134,480
186,301
Current assets
Stocks
12
70,707
59,197
Debtors
13
3,734,843
3,493,715
Cash at bank and in hand
1,597,917
2,282,052
5,403,467
5,834,964
Creditors: amounts falling due within one year
14
(7,502,368)
(7,655,750)
Net current liabilities
(2,098,901)
(1,820,786)
Net liabilities
(1,964,421)
(1,634,485)
Capital and reserves
Called up share capital
16
100
100
Profit and loss reserves
(1,964,521)
(1,634,585)
Total equity
(1,964,421)
(1,634,485)
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 10 March 2025
P Sanders
Director
Company registration number 06460702 (England and Wales)
THE STATE51 CONSPIRACY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2022
100
(1,849,454)
(1,849,354)
Year ended 31 March 2023:
Profit and total comprehensive income
-
214,869
214,869
Balance at 31 March 2023
100
(1,634,585)
(1,634,485)
Year ended 31 March 2024:
Loss and total comprehensive income
-
(329,936)
(329,936)
Balance at 31 March 2024
100
(1,964,521)
(1,964,421)
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
1
Accounting policies
Company information
The state51 Conspiracy Limited is a private company limited by shares incorporated in England and Wales. The registered office is 8-10 Rhoda Street, London, E2 7EF.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 26 ‘Share based Payment’: Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of The state51 Music Group Limited. These consolidated financial statements are available from its registered office, 8-10 Rhoda Street, London, E2 7EF.
1.2
Going concern
At the time of approving the financial statements, the director has reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.true
The Company meets its day to day working capital requirements through the financial support of group companies. The directors believe that it is appropriate to prepare the financial statements on a going concern basis which assumes that the Company will continue its operational existence with continued support from group companies.
In formulating this assessment the directors have carried out detailed forecasts which indicate that the Company should be able to continue as a financial and operational going concern.
If the Company is unable to continue in operational existence for the foreseeable future, adjustments would have to be made to reduce the balance sheet values of the assets to their recoverable amounts, provide for further liabilities that might arise and reclassify fixed assets as current assets.
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 11 -
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Music catalogues
straight line over 5-10 years
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
10% straight line
Fixtures and fittings
25% straight line
Computers
33% straight line
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments' 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
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.
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.
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
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.
1.12
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.
1.13
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.
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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.
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Amortisation
The basis for the period over which intangible assets are being amortised has been assessed by management as the useful life of the asset and is considered an appropriate basis.
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Digital sales
19,167,998
17,842,146
Physical sales
1,112,587
150,107
Greedbag sales
227,740
126,694
All other sales
97,298
85,504
20,605,623
18,204,451
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
1,923,485
1,570,328
Rest of Europe
14,769,165
13,326,864
Rest of the world
3,912,973
3,307,259
20,605,623
18,204,451
2024
2023
£
£
Other revenue
Interest income
-
1
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging:
£
£
Exchange losses
86,873
27,221
Research and development costs
18
16
Fees payable to the company's auditor for the audit of the company's financial statements
21,336
40,525
Depreciation of owned tangible fixed assets
6,142
5,857
Amortisation of intangible assets
63,791
64,725
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
15
13
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
5
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
484,486
362,624
Social security costs
44,306
30,881
Pension costs
8,583
7,401
537,375
400,906
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
1
7
Taxation
2024
2023
£
£
Current tax
Other taxes
15,003
1,254
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(314,933)
216,123
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(78,733)
41,063
Tax effect of expenses that are not deductible in determining taxable profit
303
480
Tax effect of utilisation of tax losses not previously recognised
(39,638)
Unutilised tax losses carried forward
81,354
Permanent capital allowances in excess of depreciation
(2,993)
(1,886)
Other non-reversing timing differences
69
(19)
Withholding tax
15,003
1,254
Taxation charge for the year
15,003
1,254
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
8
Intangible fixed assets
Music catalogues
£
Cost
At 1 April 2023 and 31 March 2024
404,420
Amortisation and impairment
At 1 April 2023
232,262
Amortisation charged for the year
63,791
At 31 March 2024
296,053
Carrying amount
At 31 March 2024
108,367
At 31 March 2023
172,158
9
Tangible fixed assets
Leasehold land and buildings
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2023
37,230
12,144
74,944
1,628
125,946
Additions
9,621
8,491
18,112
At 31 March 2024
46,851
12,144
83,435
1,628
144,058
Depreciation and impairment
At 1 April 2023
30,140
12,144
67,892
1,628
111,804
Depreciation charged in the year
1,516
4,626
6,142
At 31 March 2024
31,656
12,144
72,518
1,628
117,946
Carrying amount
At 31 March 2024
15,195
10,917
26,112
At 31 March 2023
7,090
7,052
14,142
Charges are in place in respect of a HSBC UK Bank debenture and inter-company guarantee, which are held over the assets of the company.
10
Fixed asset investments
2024
2023
Notes
£
£
Investments in joint ventures
11
1
1
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
11
Joint ventures
Details of the company's joint ventures at 31 March 2024 are as follows:
Name of undertaking
Registered office
Interest
% Held
held
Direct
Hurdy Gurdy Investments Ltd
8-10 Rhoda Street, London E2 7EF
Ordinary
50.00
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
70,707
59,197
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
682,180
390,707
Amounts owed by group undertakings
218,016
13,016
Other debtors
119,586
1
Prepayments and accrued income
2,715,061
3,089,991
3,734,843
3,493,715
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
443,148
327,545
Amounts owed to group undertakings
12,236
275,001
Amounts owed to undertakings in which the company has a participating interest
1
Taxation and social security
13,692
153,727
Other creditors
886,528
507,349
Accruals and deferred income
6,146,763
6,392,128
7,502,368
7,655,750
15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
8,583
7,401
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
THE STATE51 CONSPIRACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
10,000
10,000
100
100
17
Ultimate controlling party
The parent undertaking is The state51 Music Group Limited, a company registered in England and Wales, registered office 8-10 Rhoda Street, Shoreditch, London, E2 7EF.
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