| Registered number |
| Pages for filing with registrar |
| Registered number: | |||||||
| Balance Sheet | |||||||
| as at |
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| Notes | 2023 | 2022 | |||||
| £ | £ | ||||||
| Fixed assets | |||||||
| Tangible assets | 5 | ||||||
| Current assets | |||||||
| Debtors | 6 | ||||||
| Cash at bank and in hand | |||||||
| Creditors: amounts falling due within one year | 7 | ( |
( |
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| Net current liabilities | ( |
( |
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| Net liabilities | ( |
( |
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| Capital and reserves | |||||||
| Called up share capital | |||||||
| Share premium | |||||||
| Profit and loss account | ( |
( |
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| Shareholders' funds | ( |
( |
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| The financial statements were approved by the board of directors and authorised for issue on |
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| Ms E Northeast | |||||||
| Director | |||||||
| Notes to the Accounts | ||||||||
| for the year ended |
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| 1 | Accounting policies | |||||||
| Basis of preparation | ||||||||
| Going concern | ||||||||
| The financial statements have been prepared on a going concern basis. Downtown Music Publishing LLC have confirmed that they will not be recalling their loan to the company for the foreseeable future and will continue to provide ongoing support both financially and operationally in order for the company to continue trading. Having regard to this intention, the director believe it is appropriate to prepare these financial statements on a going concern basis. | ||||||||
| Turnover | ||||||||
The Company has prepared the financial statements in accordance with ASC 606 and all related amendments. In applying ASC 606, the Company has followed a five-step approach for evaluating its contracts with customers for digital distribution and publishing revenues. For each, the Company identified the type of customer contracts, identified its performance obligations under contracts, determined a transaction price, allocated the transaction price over the life of the contracts, and established revenue recognition policies for recognising revenue as its performance obligations are satisfied. Digital distribution revenues are generated from royalties earned from streaming through third-party digital service providers (“DSP”) platforms. Digital distribution revenues are variable based on actual usage or consumption of the distributed content. Revenue is recognized based on usage reports provided by the DSP that confirm the applicable client’s usage for a given period, and the Company has rendered the agreed upon services with respect to such royalties. Publishing revenues are earned from the receipt of royalties relating to the licensing of rights in musical compositions. The receipt of royalties principally relates to amounts earned from the public performance of musical compositions, the mechanical reproduction of musical compositions on recorded media including digital formats and the use of musical compositions in synchronization with visual images. Publishing royalties, except for synchronization royalties, generally are recognized when the sale or usage occurs. The most common form of consideration for publishing contracts is sales and usage-based royalties. The collecting societies and DSPs submit usage reports, typically with payment for royalties due, often on a quarterly or bi-annual reporting period, in arrears. Royalty revenues are recognized when it is confirmed the applicable client's sale or usage occurs for a given period, and when the Company has rendered the agreed upon services to the client with respect to such royalties. |
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| Royalty expense represents the portion of royalties collected from DSPs and other channels that are owed to the artists. | ||||||||
| Intangible fixed assets | ||||||||
| 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: | ||||||||
| Copyrights | over 15 years - straight line | |||||||
| Tangible fixed assets | ||||||||
| Plant and machinery | 25% straight line | |||||||
| Fixtures, fittings, tools and equipment | 25% straight line | |||||||
| Cash | ||||||||
| Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. | ||||||||
| Financial instruments | ||||||||
| The company has only basic financial instruments. Basic financial assets Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method. Basic financial liabilities Basic financial liabilities, including creditors, bank loans and loans from fellow group are initially recognised at transaction price unless the arrangement constitutes a financing transaction. |
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| Taxation | ||||||||
| Foreign currency translation | ||||||||
| 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. |
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| Pensions | ||||||||
| Copyrights | ||||||||
| The acquisition costs of audio and visual copyrights and catalogues which are owned in perpetuity are capitalised as intangible fixed assets and amortised by equal instalments over their estimated useful economic life, not exceeding 15 years. When, in the view of the directors, the revenue profile profile of an acquisition is not spread evenly over the asset's life the amortisation may be increased accordingly in the first few years to match the revenue recognised. Revenue forecasts are prepared and reviewed annually in order to assess the carrying value of intangible fixed assets. Provisions are made where the review indicates that the carrying value may not be recoverable from future revenues. |
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| Publishing advances | ||||||||
| Publishing advances are recoupable from royalties arising in accordance with the terms specified in individual contracts and licence agreements. Un-recouped publishing advances will be reviewed on a regular basis to assess their recoverability. Where the directors anticipate that royalties from future revenue will be insufficient to fully recoup a publishing advance, provision will be made to write down the carrying value of the advance to its estimated net recoupable amount. | ||||||||
| 2 | Audit information | |||||||
| Senior statutory auditor: | ||||||||
| Firm: | ||||||||
| Date of audit report: | ||||||||
| 3 | Employees | 2023 | 2022 | |||||
| Number | Number | |||||||
| Average number of persons employed by the company | ||||||||
| 4 | Intangible fixed assets | £ | ||||||
| Goodwill: | ||||||||
| Cost | ||||||||
| At 1 January 2023 | ||||||||
| At 31 December 2023 | ||||||||
| Amortisation | ||||||||
| At 1 January 2023 | ||||||||
| At 31 December 2023 | ||||||||
| Net book value | ||||||||
| At 31 December 2023 | - | |||||||
| 5 | Tangible fixed assets | |||||||
| Plant and machinery etc | ||||||||
| £ | ||||||||
| Cost | ||||||||
| At 1 January 2023 | ||||||||
| Additions | ||||||||
| At 31 December 2023 | ||||||||
| Depreciation | ||||||||
| At 1 January 2023 | ||||||||
| Charge for the year | ||||||||
| At 31 December 2023 | ||||||||
| Net book value | ||||||||
| At 31 December 2023 | ||||||||
| At 31 December 2022 | ||||||||
| 6 | Debtors | 2023 | 2022 | |||||
| £ | £ | |||||||
| Trade debtors | - | |||||||
| Amounts owed by group undertakings and undertakings in which the company has a participating interest | ||||||||
| Other debtors | ||||||||
| 7 | Creditors: amounts falling due within one year | 2023 | 2022 | |||||
| £ | £ | |||||||
| Trade creditors | ||||||||
| Amounts owed to group undertakings and undertakings in which the company has a participating interest | ||||||||
| Taxation and social security costs | - | |||||||
| Other creditors | ||||||||
| 8 | Subsequent events | |||||||
| On December 16, 2024, the Parent entered into a definitive agreement with Virgin Music Group whereby it would acquire Downtown Music Holdings LLC for cash consideration of USD $775,000,000. However, the acquisition is subject to regulatory approvals and has not officially closed as of the date of these financial statements. If the transaction does eventually close, it would result in a change of control of the Company. | ||||||||
| 9 | Other information | |||||||
| Downtown Music UK Ltd is a private company limited by shares and incorporated in England. Its registered office is: | ||||||||
| 7 Bell Yard | ||||||||
| London | ||||||||
| WC2A 2JR | ||||||||