Somesuch & Co Limited
Annual Report and Financial Statements
For the year ended 31 December 2022
Company Registration No. 07330281 (England and Wales)
Somesuch & Co Limited
Company Information
Directors
S A Campbell
T J Nash
Secretary
T J Nash
Company number
07330281
Registered office
Charlotte Building
17 Gresse Street
London
W1T 1QL
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Bankers
Coutts & Co
440 Strand
London
WC2R 0QS
Somesuch & Co Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
Somesuch & Co Limited
Strategic Report
For the year ended 31 December 2022
Page 1
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
The directors are somewhat pleased to report that in the year ended 31 December 2022 the business proved resilient to the economic challenges facing businesses globally, and managed to sustain reasonable turnover and profits.
The company's results for the year saw a decrease in turnover from £21.0m to £20.1m and a decrease in profit before tax from £1.38m to £0.2m.
Principal risks and uncertainties
The principal business risks affecting the company are considered to relate to the economy and political uncertainty in the UK where the company operates. Other risks include financial pressures on clients and advertising agencies, the ongoing uncertainty with regards to Brexit, the Russia-Ukraine war, and evolving business practices to combat the climate emergency.
In light of these, the directors have taken the following steps:
- Adherence to industry-approved sustainability protocol on all shoots
- Carbon offsetting for shoots and for flights to support forestry and wildlife projects throughout the UK
- Close management of cash to ensure payment is made upon receipt of goods or services
- Forged new working relationships with high quality / low-cost shoot centres outside of Ukraine
In the event that revenues are significantly impacted for a longer period then the company will consider cost cutting measures in order to ensure the long-term viability of the business.
However, the company has sufficient cash reserves as at the date of approval of the financial statements to enable it to continue to meet its liabilities as they fall due for at least the next twelve months.
At the end of the financial year the directors feel the company is well placed to meet these challenges, underpinned by a strong balance sheet including net assets of £2.8m (2021: £2.7m) and cash balances of over £0.8m (2021: £0.8m).
Somesuch & Co Limited
Strategic Report (Continued)
For the year ended 31 December 2022
Page 2
Key performance indicators
The Directors review KPIs throughout the year as part of the normal management process. The key performance indicators monitored by the directors are those that best demonstrate the financial performance and strength of the group. Specifically, we look at year on year trends in the profit and loss account, in turnover and gross profit margin.
As with most businesses, the financial uncertainty from Brexit and the Russian-Ukraine war has led to a slight decrease in the group’s key performance indicators compared to the prior year. Whilst gross profit margin remained the same, the operating profit margin decreased. This was driven largely by investment in new office space, new talent and an increase in travel costs post-Pandemic.
The KPIs for the year ended 31 December 2022 are:
2022 2021
Turnover £20.18m £21.05m
Gross profit £3.79m £3.92m
Gross profit margin 19% 19%
Operating profit margin 1% 7%
The economic climate has remained challenging in the months that have followed year end, and so the company remains vigilant and open to cost cutting measures should they be necessary to ensure the long-term viability of the business.
S A Campbell
Director
28 September 2023
Date
Somesuch & Co Limited
Directors' Report
For the year ended 31 December 2022
Page 3
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company is that of the production of television commercials, short films and music videos.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
S A Campbell
T J Nash
Auditor
In accordance with the company's articles, a resolution proposing that Moore Kingston Smith 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.
On behalf of the board
S A Campbell
Director
28 September 2023
Somesuch & Co Limited
Directors' Responsibilities Statement
For the year ended 31 December 2022
Page 4
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Somesuch & Co Limited
Independent Auditor's Report
To the Members of Somesuch & Co Limited
Page 5
Opinion
We have audited the financial statements of Somesuch & Co Limited (the 'company') for the year ended 31 December 2022 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit 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 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.
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.
Somesuch & Co Limited
Independent Auditor's Report (Continued)
To the Members of Somesuch & Co Limited
Page 6
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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where 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 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.
Somesuch & Co Limited
Independent Auditor's Report (Continued)
To the Members of Somesuch & Co Limited
Page 7
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Perform substantive tests of detail to evaluate the cut off, completeness, and accuracy of production revenue and associated production costs.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Somesuch & Co Limited
Independent Auditor's Report (Continued)
To the Members of Somesuch & Co Limited
Page 8
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.
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.
Joanna Cosgrove
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
3 October 2023
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Somesuch & Co Limited
Statement of Comprehensive Income
For the year ended 31 December 2022
Page 9
2022
2021
Notes
£
£
Turnover
3
20,183,308
21,049,590
Cost of sales
(16,391,575)
(17,125,409)
Gross profit
3,791,733
3,924,181
Administrative expenses
(3,636,260)
(2,576,060)
Other operating income
46,482
27,780
Operating profit
4
201,955
1,375,901
Interest receivable and similar income
8
320
46
Profit before taxation
202,275
1,375,947
Tax on profit
9
(67,196)
(262,838)
Profit for the financial year
135,079
1,113,109
Other comprehensive income
-
-
Total comprehensive income for the year
135,079
1,113,109
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
Somesuch & Co Limited
Balance Sheet
As at 31 December 2022
Page 10
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
540,968
36,331
Current assets
Work in progress
11
215,630
3,000
Debtors
12
4,238,659
4,616,830
Cash at bank and in hand
879,861
843,804
5,334,150
5,463,634
Creditors: amounts falling due within one year
13
(2,986,555)
(2,838,507)
Net current assets
2,347,595
2,625,127
Total assets less current liabilities
2,888,563
2,661,458
Provisions for liabilities
(92,026)
Net assets
2,796,537
2,661,458
Capital and reserves
Called up share capital
16
780
780
Capital redemption reserve
120
120
Profit and loss reserves
2,795,637
2,660,558
Total equity
2,796,537
2,661,458
The financial statements were approved by the board of directors and authorised for issue on 28 September 2023 and are signed on its behalf by:
S A Campbell
Director
Company Registration No. 07330281
Somesuch & Co Limited
Statement of Changes in Equity
For the year ended 31 December 2022
Page 11
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
780
120
1,847,449
1,848,349
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
1,113,109
1,113,109
Dividends
-
-
(300,000)
(300,000)
Balance at 31 December 2021
780
120
2,660,558
2,661,458
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
135,079
135,079
Balance at 31 December 2022
780
120
2,795,637
2,796,537
Somesuch & Co Limited
Notes to the Financial Statements
For the year ended 31 December 2022
Page 12
1
Accounting policies
Company information
Somesuch & Co Limited is a private company limited by shares incorporated in England and Wales. The registered office is Charlotte Building, 17 Gresse Street, London, W1T 1QL.
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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Somesuch Industries Limited. These consolidated financial statements are available from its registered office, 6th Floor Charlotte Building, 17 Gresse Street, London, United Kingdom, W1T 1QL.
1.2
Going concern
The directors have prepared cash flow projections for a period of 12 months from the date of approval of these financial statements, which indicate that the company will continue to generate sufficient cash to meet liabilities as they fall due based on existing financing facilities. The directors will continue to monitor the trading conditions in the industry, and in the event income is impacted significantly they will consider cost cutting measures in order to ensure the long term viability of the business.
The directors have also received sufficient confirmation and assurances that the related party loan will continue to be repaid during the next 12 months to enable the company to continue to trade and to meet its liabilities as they fall due. Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 13
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Revenue is recognised in respect of the production of commercials from the point at which the company has obtained the right to consideration in return for performance. This is considered to be when all necessary approvals during the process of pre-production have been obtained from the commissioning agency and normally equates to the date at which shooting of the production commences. No profit element is recognised until the company is able to estimate the profit on the production reliably.
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 or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
Over the term of the lease
Fixtures, fittings & equipment
20% straight line
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.
1.5
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.
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.
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.
1.6
Work in progress
Work in progress is recognised as costs that have been incurred during the year, where the revenue is to be recognised in the following period as per the revenue recognition policy. Work-in-progress is stated at the lower of the costs incurred and the estimated amount that is going to be charged as revenue in the following period.
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 14
1.7
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.
1.8
Financial instruments
The company only has basic financial instruments measured at amortised cost, with no financial instruments classified as other or basic instruments measured at fair value.
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.
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.
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 15
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
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.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 16
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.
1.14
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 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.
Revenue Recognition
Significant management judgement is required in determining the point at which revenue should be recognised. Revenue is recognised in respect of each production from the point at which the company has obtained the right to consideration in return for performance. This is considered to be when all necessary approvals during the process of pre-production have been obtained from the commissioning agency and normally equates to the date at which shooting commences. No profit element is recognised until the company is able to estimate the profit on the production reliably. In arriving at this point of recognition, management have considered the liabilities and amounts that would be due if at different points of the contract, the project were to be pulled.
Trade debtors recoverability
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 17
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Production services
20,183,308
21,049,590
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
18,578,907
16,960,582
United States of America
328,081
1,632,822
European Union
1,276,320
2,456,186
20,183,308
21,049,590
2022
2021
£
£
Other significant revenue
Interest income
320
46
Grants received
-
12,000
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(46,595)
(113,487)
Government grants
-
(12,000)
Depreciation of owned tangible fixed assets
38,825
20,851
Operating lease charges
215,397
142,953
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
39,000
31,500
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 18
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
26
22
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
2,119,677
1,764,158
Social security costs
250,904
164,112
Pension costs
61,210
40,975
2,431,791
1,969,245
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
24,000
27,525
Company pension contributions to defined contribution schemes
24,000
-
48,000
27,525
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
320
46
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
262,838
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
9
Taxation
2022
2021
£
£
(Continued)
Page 19
Deferred tax
Origination and reversal of timing differences
67,196
Total tax charge
67,196
262,838
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
202,275
1,375,947
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
38,432
261,430
Tax effect of expenses that are not deductible in determining taxable profit
13,134
2,248
Unutilised tax losses carried forward
(2,590)
Effect of change in corporation tax rate
21,965
Depreciation on assets not qualifying for tax allowances
3,962
Provisions tax adjustment
65
Capital Allowances
(3,745)
(4,867)
Taxation charge for the year
67,196
262,838
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 20
10
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 January 2022
334,813
334,813
Additions
519,176
24,286
543,462
Disposals
(72,575)
(72,575)
At 31 December 2022
519,176
286,524
805,700
Depreciation and impairment
At 1 January 2022
298,482
298,482
Depreciation charged in the year
24,723
14,102
38,825
Eliminated in respect of disposals
(72,575)
(72,575)
At 31 December 2022
24,723
240,009
264,732
Carrying amount
At 31 December 2022
494,453
46,515
540,968
At 31 December 2021
36,331
36,331
11
Work in progress
2022
2021
£
£
Work in progress
215,630
3,000
12
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
1,288,249
1,551,439
Corporation tax recoverable
26,844
Other debtors
2,272,128
2,021,836
Prepayments and accrued income
626,608
1,043,555
4,213,829
4,616,830
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
12
Debtors
(Continued)
Page 21
2022
2021
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 14)
24,830
Total debtors
4,238,659
4,616,830
13
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
494,250
1,108,886
Corporation tax
195,701
Other taxation and social security
517,772
324,994
Other creditors
22,573
16,383
Accruals and deferred income
1,951,960
1,192,543
2,986,555
2,838,507
14
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Assets
Assets
2022
2021
2022
2021
Balances:
£
£
£
£
Deferred tax
92,026
-
21,338
-
Tax losses
-
-
3,492
-
92,026
-
24,830
-
2022
Movements in the year:
£
Liability at 1 January 2022
-
Charge to profit or loss
67,196
Liability at 31 December 2022
67,196
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 22
15
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
61,210
40,975
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.
16
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of 10p each
2,800
2,800
280
280
Ordinary B shares of 10p each
2,800
2,800
280
280
Ordinary C shares of 10p each
2,200
2,200
220
220
7,800
7,800
780
780
The holders of the ordinary A, B, and C shares have full voting rights and all shares rank pari passu in all aspects with each of the other classes. The holders of the shares shall have the right to receive dividends, but the directors are empowered to declare different amounts of dividend in respect of each class of shares. The directors may decide to pay interim dividends on any of the shares to the exclusion of the other classes of shares then in existence in the company's capital. Insofar as a greater amount of dividends shall have been paid per share during any time in respect of the holder of one class.
17
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:
2022
2021
£
£
Within one year
182,272
166,799
Between two and five years
697,708
288,597
In over five years
136,944
1,016,924
455,396
18
Related party transactions
Transactions with related parties
Somesuch & Co Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
18
Related party transactions
(Continued)
Page 23
During the year sales of £295,460 (2021: £1,082,597) and purchases of £3,048,029 (2021: £1,216,220) were made from Somesuch Inc, a related party by virtue of common control. At the year end a debtor of £1,643,452 (2021: £1,696,462) was owed from Somesuch Inc.
At the year end directors owed the company £263,384 on an interest free loan.
19
Ultimate controlling party
The immediate and ultimate parent company is Somesuch Industries Limited, a company registered in England and Wales. There is no ultimate controlling party of Somesuch Industries Limited.
Somesuch Industries Limited is the smallest and largest group for which consolidated financial statements including the company are prepared. The consolidated financial statements of Somesuch Industries Limited are available from its registered office, 6th Floor Charlotte Building, 17 Gresse Street, London, United Kingdom, W1T 1QL.
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