Shark Free No. 4 Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6th Floor, Blackfriars House, Parsonage, Manchester, M3 2JA.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling , which is the functional currency of the company. Monetary a mounts 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.
During the year the company incurred trading losses. This is due to the growth stage of the company where expenses incurred are promoting and developing it's clients careers in the music, media and entertainment industries, which is to be expected given the nature of the trade. Although the company has made a loss this year, the company has began to generate income and the loss for the year has decreased significantly.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable excluding discounts, rebates and VAT.
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.
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, 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 paymen ts 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. A m ounts 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.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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.
There has been no judgements, estimates and assumptions made in the preparation of these financial statements.
The average monthly number of persons (including directors) employed by the company during the year was 2 (2017 - 2).
The company has estimated losses of £88,038 (2017 - £76,002) available to carry forward against future trading profits. No deferred tax debtor has been provided in respect of these losses as the company does not anticipate to make profits of this size in the foreseeable future.
A change to the UK Corporation Tax rate was announced in the Chancellor's Budget on 16 March 2016. The change announced is to reduce the main rate to 17% from 1 April 2020.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
During the year the company issued a further 10 ordinary shares of £1 each for a consideration of £1,000 per share.
The total consideration received by the company during the year for all shares issued was £10,000, giving rise to a share premium of £9,990.
At the balance sheet date 690 Ordinary shares of £1 each have been issued. 600 Ordinary shares of £1 remained unpaid at the year end.
During the year the company received management charges from Shark Free Records Ltd of £1,500 (2017: £34,600 recharged to Shark Free Records Ltd). The company is related by common control, in relation to various expenses. As at the balance sheet date these recharges had been paid in full.
At the year end, Shark Free Records Limited owed the company £2,115 (2017: £nil). During the year the Shark Free Records received royalties on behalf of the company totalling £21,866. Shark Free Records Ltd also incurred marketing costs of £19,751 on behalf of the company.
The company is controlled by C Rolfe and A Balkin, both directors, by virtue of their control of Shark Free Group LLP, which holds the majority of the issued share capital of the company.