Registered number: 12329089
Once Upon A Time Global Ltd
Annual report and consolidated financial statements
For the Year Ended 30 April 2023
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Once Upon A Time Global Ltd
Company Information
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Hurst Accountants Limited
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Chartered Accountants & Statutory Auditors
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Once Upon A Time Global Ltd
Contents
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Independent Auditors' Report
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Consolidated Statement of Profit or Loss and Other Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Consolidated Financial Statements
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Once Upon A Time Global Ltd
Group Strategic Report
For the Year Ended 30 April 2023
The directors present their Group Strategic Report and financial statements for the year ended 30 April 2023.
Review of the business and looking ahead
The 12 month period to April 2023 was another strong year for the Agency with growth coming through the full year benefit of our most recent acquisition, The Special Treats Production Company Limited (now renamed Once Upon A Time Content Limited), growth in boxset and standard vinyl sales in our Music division, new clients such as Amazon and Starzplay (Lionsgate) in our Digital division, and the strong performance of our Entertainment division. During the year, we invested in a new P5 digital printer and a new die cutting machine at our Alfreton premises, the latter allowing us to have an end to end facility for production of point of sale materials which will reduce outsourced spend and significantly enhance gross margin. Separately, in April 2023 we became B-Corp certified, demonstrating the Agency’s commitment to making a positive social and environmental impact. Overall gross profit achieved was £25.0m (2022: £19.1m) whilst EBITDAE (Earnings before Interest, Tax, Depreciation, Amortisation and Exceptional items) was £7.0m (2022: £5.4m). After financing costs, which include charges and credits relating to the change in fair value of contingent consideration, and a goodwill write down relating to our US business, the Agency made a loss before tax of £2.0m (2022: profit of £1.9m). Profit from Operations as a proportion of Gross Profit was 10% (2022: 23%) whilst staff costs as a proportion of Gross Profit were 51% (2022: 47%).
Advertising/Digital division
Our Advertising/Digital division saw impressive growth, in particular seeing the full year benefit of the new relationships with Amazon and Starzplay whilst we also benefited from significant spend from US travel giant Travel & Leisure.
Our Digital team were the main recipients of the positive trading mentioned above. During the year we were chosen to help launch Disney+ in the Middle East & North Africa ('MENA') region, whilst for Netflix once again we advertised a broad array of both Original and licensed titles in Europe, the Middle East and Africa ('EMEA'). Additionally, we worked on our first title for Sky, The Amazing Maurice. We now have significant new business opportunities for the year ahead. We have commenced working on the UK launch of Amazon Freevee, Amazon’s new Advertising-based Video on Demand (AVOD) service where we have also worked on the relaunch of Neighbours. Separately, we have recently been “onboarded” by another major US streaming platform to be their London Agency for marketing of their main streaming titles in Europe. This means that we now work with 5 of the world’s top 7 global streaming platforms. We are also looking to expand our offering to gaming clients, and to that end we have been onboarded by SEGA. Offsetting these opportunities, Travel and Leisure have now taken their work in house, and we expect limited activity with them in the new fiscal year.
Our Content team, which specialises in the production of interviews, EPK's (Electronic Press Kits) and junkets for the film industry had an excellent year, with good growth in production of junkets mirroring the growth in streaming content. We acquired this business (see Once Upon A Time Content Limited in Note 30 to the Financial Statements, 'Business Combinations') in April 2022 and immediately commenced integration with the wider Agency. In April 2023 we re-branded this business to Once Upon A Time and the Content team have already worked on titles together with our Digital team, with creative staff working across both teams. Looking forward to the new fiscal year, the Hollywood actors' strike have temporarily impacted the performance of this team, with a reduction in activity in the 2023/24 year to date.
Our Media team achieved a solid profit in the year largely as a result of sales to Travel & Leisure, which will not be repeated in the new fiscal year. Furthermore, we are currently experiencing a tougher trading environment due to economic headwinds which tend to disproportionately impact media budgets, and consequently we are expecting a small loss in the new fiscal year. We are putting significant focus on new business opportunities. Separately, our media buying has transitioned away from terrestrial TV to worldwide digital suppliers (e.g. Facebook) which now provides opportunities to work with customers outside of the UK.
In the US, our Hospitality team made a small loss in the year. Towards the latter part of the year we switched focus to bigger ticket work and also more towards branding of high end hotels and restaurants as opposed to website development. As a result of these measures, and some significant new business wins, the Hospitality team are now back on track and profitable in the new fiscal year.
Overall, the Advertising/Digital division achieved a record EBITDAE of £5,899k (2022: £4,736k).
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Once Upon A Time Global Ltd
Group Strategic Report (continued)
For the Year Ended 30 April 2023
Activation/Shopper division
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Our Activation/Shopper division benefitted from a significant increase in activity with Pokémon due to supporting the Sword and Shield, Scarlet and Violet expansions in EMEA, and experiential events, for example the takeover of the Trafford Centre in Manchester. From a production perspective we have invested in a new P5 digital printer and a die-cutter at our facility in Alfreton, the latter allowing us to have an end to end facility for production of point of sale materials. This is resulting in margin improvements and improved flexibility for the Agency as a whole. For work delivered to mainland Europe we continue to utilise outsourced production facilities in market.
Our Entertainment team saw sales to Pokemon increase by 98% whilst sales to point of sale home entertainment clients fell year on year as expected with marketing spend being diverted to support content on their streaming platforms. Looking ahead, our main focus in this team is doing great work for Pokémon, in particular working with new territories in Europe. Separately we are diversifying our offering to provide point of sale materials for categories such as Music and Books and to this end we are working with our a significant new client supporting a new buying model for retailers. We are beginning to see improved sales in this area, although the main benefit will be seen from 2024.
In Derbyshire, our Health and Beauty team performed strongly and, as mentioned above, following the purchase of a die-cutter in Autumn 2022 we now have an in-house end to end facility for production of point of sale materials. In addition to supplying Health & Beauty clients, we are now using this facility to produce point of sale materials for the Entertainment team, which is significantly improving gross margin for the Agency. The Health and Beauty team were acquired in 2021 as part of the acquisition of StormDFX Limited (now called Once Upon A Time Activation Limited). In April 2023, StormDFX was rebranded as Once Upon A Time.
Our Music team had another excellent year, increasing the number of boxset titles produced and significantly growing standard vinyl sales. Major boxset releases included Motley Crue – Shout At The Devil, Wham! – The Singles, Celtic Frost – Danse Macabre and Dio At Donnington. Once again, our key customer was BMG Music whilst we also worked with Sony Music on the Wham! boxset. Our Music business is ideally placed to take advantage of our cardboard design expertise and creative artwork capabilities whilst we are also able to produce "unboxing" videos with our in-house audio visual team, for advertising new boxset releases on platforms such as Facebook. Moving into the new fiscal year we have seen a reduction in the volume of standard vinyl and boxset sales as a consequence of oversupply in the post Covid period and also the current economic environment. However, we are continuing to increase the number of boxset titles produced and diversification of our clients.
The Activation/Shopper division achieved a record EBITDAE of £3,831k (2022: £2,983k).
Overall it was another excellent year for Agency, with improved margins, successful integration of acquisitions, and significant new business growth .
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Once Upon A Time Global Ltd
Group Strategic Report (continued)
For the Year Ended 30 April 2023
Principal risks and uncertainties
Funding and liquidity
The objective is to ensure continuity of funding and cash levels sufficient to meet the ongoing needs of the business.
The policy is to smooth the cash management of the business and to arrange funding ahead of requirements, should it be needed.
Interest rate risk
The Group is exposed to interest rate risk through its loans with Tosca Debt Capital. Increases in the Sonia rate would increase the cost of these loans. The Group is forecast to be highly profitable in the next 12 months and as such is in a good position to fund increases in cash pay interest.
Competitive risk
The group operates in competitive markets. The breadth of the client base reduces the possible effect of the loss of any one client, and the business continually seeks to bring new customers in to minimise the potential risk of customer concentration.
Competitive advantage
The group focuses on providing clients with a wide range of added value services, thus developing very strong customer relationships. This enables the group to maintain long-term relationships with clients.
Debtors
The group maintains strong relationships with all its key clients and has established credit control parameters. Appropriate credit terms are agreed with all customers, and these are closely managed.
Major disruption/disaster risk
The group has a formal business continuity contingency plan which is reviewed regularly and tested.
Control environment
The group has formal authority limits for all key decisions and clear administration procedures for the timely reporting of critical business information.
Funding risk
The group finances its operations by a combination of debt, equity, leases and working capital. The group undertakes short term cash forecasting to monitor its expected cash flows against its cash availability, finance facilities, and financial obligations. The group also undertakes longer term cash forecasting to monitor its expected funding requirements in order to meet its current business plan, in the context of its existing facilities and to identify any requirement for future funding facilities. The group also maintains an active dialogue with a wide range of finance providers in order to ensure that it is aware of all possible sources of finance when it is assessing the availability and cost of providing for the funding requirements in the current business plan.
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Once Upon A Time Global Ltd
Group Strategic Report (continued)
For the Year Ended 30 April 2023
Employee involvement
The group’s policy is to continue to develop its communications with all employees, to inform them on matters of concern to them as employees and to promote awareness of the financial and economic factors affecting the Group and, subject to practical and commercial considerations, to consult them in decisions that affect their current jobs or future prospects.
Disabled employees
The group gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a disabled person.
Financial key performance indicators (“KPIs”)
The following KPIs form part of the overall management administration structure used to monitor business
performance:
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Employment costs per head
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Other operating costs per head (1)
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Operating profit/(loss) per head (2)
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(1) Other operating costs excluding depreciation, amortisation and costs identified by management as exceptional..
(2) Operating profit excluding depreciation, amortisation and exceptional costs (EBITDAE).
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Once Upon A Time Global Ltd
Group Strategic Report (continued)
For the Year Ended 30 April 2023
Directors' statement of compliance with duty to promote the success of the Group
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Corporate Governance provides a framework for the Group and Company to not only demonstrate how the Directors make decisions for the long-term success of the Group and its stakeholders, but also has regard to how the Directors ensures the Group complies with the requirements of Section 172 of the Companies Act 2006.
The Directors, in line with their duties under Section 172 of the Companies Act 2006, act individually and collectively in the way they consider, in good faith, matters that would be most likely to promote the success of the Group and Company for the benefit of its members, and in doing so have regard, amongst other matters, to the:
a) Likely consequences of any decision in the long term
b) Interest of the Group's employees
c) Need to foster the Group's business relationships with suppliers, customers and others
d) Impact of the Group's operations on the community and the environment
e) Desirability of the Group maintaining a reputation for high standards of business conduct
f) Need to act fairly between members of the Group
The Directors' regard to these matters is embedded in their decision-making process, through the Group's business strategy, culture, govername framework, management information flows and stakeholder engagement processes.
The Group's business strategy is focused on achieving success for the Group in the long-term. When setting this strategy, the Board considers the impact of relevant factors and stakeholder interests on the Group's performance. The Board also identifies principal risks facing the business and sets risk management objectives.
The Board promotes a culture of upholding the highest standards of business conduct and regulatory conduct. The Board ensures these core values are communicated to the Group's employees and embedded in the Group's policies and procedures, employee induction and training programmes and its risk control and oversight framework.
To demonstrate our commitment to acting in the best interest of the members and other stakeholders of the group, during the year we undertook a number of initiatives. For example, we implemented the London Living Wage for all London based employees, and also implemented significantly enhanced maternity and paternity leave policies. During the year, following a lengthy process, we were awarded B-Corp certification. Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. Following the awarding of this certification, the Board has committed to continuously improve the Agency’s standards and to ensure we achieve re-certification which is required every 3 years. To this end we will actively use the B Impact Assessment throughout these years as a framework to inspire and catalogue improvements.
Stakeholders
The Board recognises that building strong and lasting relationships with our stakeholders will help us to deliver our strategy in line without long-term values and operate a sustainable business.
The Board regularly discusses issues concerning employees, clients, suppliers, community and environment, regulators and its shareholders, which it considers in its discussions and in its decision-making process.
In addition to this, the Board seeks to understand the interests and views of the Group's stakeholders by engaging with them directly when required. The Directors are supported in the discharge of their duties by:
- Training to further their understanding of their duties and obligations under applicable law and regulation.
- Processes which ensure the provision of timely management information and escalation through reporting lines to the Board from the Group's business areas, its risk and control functions, support teams and committees of the Board.
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Once Upon A Time Global Ltd
Group Strategic Report (continued)
For the Year Ended 30 April 2023
Employees
Our employees contribute to a positive working culture and healthy working environment. Employees are key to the success of our business. In addition to aiming to be a responsible employer in our approach to pay and benefits, we continue to engage with out team to ascertain which training and development opportunities should be made available to improve our team's productivity and our individual employees' potential within the business. We continually invest in employee development and welfare to create and encourage an inclusive culture within the organisation.
Clients
Our clients are critical to the on-going performance of the Group. Our client service teams build lasting relationships with current and potential clients to understand their objectives and requirements. We monitor our client relationships closely and request feedback on the performance of our services and quality of the relationship.
The feedback we receive from both our clients and suppliers' feeds into our management decision making and informs our corporate strategy.
Suppliers
The Group fosters positive and long-standing relationships with suppliers. The quality of our end-product is in part dependent on the relationships we build with key suppliers. We monitor our performance against agreed supplier payment terms and remain committed to being fair and transparent in our deailings with all of our suppliers. The Group has procedures requiring due diligence of suppliers as to their internal governance, including for example, their anti-bribery and corruption practices, data protection policies and modern slavery matters.
This report was approved by the board and signed on its behalf.
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Once Upon A Time Global Ltd
Directors' Report
For the Year Ended 30 April 2023
The directors present their report and the financial statements for the year ended 30 April 2023.
Directors' responsibilities statement
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The directors are responsible for preparing the Group Strategic Report, Directors' Report and the consolidated financial statements, in accordance with applicable law.
Company law requires the directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.
Under company law the directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing the consolidated financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgments and estimates that are reasonable and prudent;
∙state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;
∙assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
The loss for the year, after taxation, amounted to £2,847,388 (2022 -profit £1,478,165).
The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
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J Davison (appointed 31 May 2022)
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The future developments of the Group are disclosed in the Group Strategic Report.
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Once Upon A Time Global Ltd
Directors' Report (continued)
For the Year Ended 30 April 2023
The financial statements have been prepared on a going concern basis.
Group
The Group had a deficit on retained earnings of £4,148,373 at 30 April 2023 (2022: £1,300,985). The Directors have assessed whether the Group has adequate funding to continue trading over the forthcoming period. To assist in this process, management has prepared a detailed cash flow forecast covering the next 12 months and covenant compliance forecasts covering the next 2 years. These forecasts show that the Group is expected to be strongly cash positive over the next year and comply with the covenants. In addition, actual and forecast performance for the financial period ending 30 April 2023 shows that the group is trading ahead of budget.
In July 2021, the Group and Company's Facilities Agreement with Tosca Debt Capital (Luxembourg) S.A.R.L. ('Tosca') was amended. Tosca provided funding for the initial consideration associated with the acquisition of StormDFX Ltd, and reset financial covenants to include this acquisition. In April 2022, covenants were also reset to incorporate the acquisition of The Special Treats Production Company Ltd. The directors are forecasting compliance with the reset covenants for the next 12 months.
Consequently, the consolidated financial statements have been prepared on a going concern basis.
Company
The Company had a deficit on retained earnings of £388,388 at 30 April 2023 (2022: £4,582,666). The Company is funded by a mixture of share capital, loan notes and the Tosca debt facility. Trading subsidiaries will assist with enabling redemption of the loan notes and settlement of the debt facility. Those subsidiaries will also remit dividends to pay down any intercompany loans that result.
Therefore, the Company's financial statements have been prepared on a going concern basis.
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Once Upon A Time Global Ltd
Directors' Report (continued)
For the Year Ended 30 April 2023
Greenhouse gas emissions, energy consumption and energy efficiency action
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The following SECR disclosures present our carbon footprint within the United Kingdom across scope 1 and 2 emissions. We have followed the 2019 HM Government's Environmental Reporting Guidelines and used the GHG Reporting Protocol - Corporate Standard and also used the 2022 UK Government's Conversion Factors for Company reporting. The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1m revenue.
The Group's greenhouse gas emissions and energy consumption are as follows:
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Emissions resulting from activities for which the Group is responsible involving the combustion of gas or consumption of fuel for the purposes of transport (in tonnes of CO2 equivalent)
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Emissions resulting from the purchase of the electricity by the Group for its own use, including the purposes of transport (in tonnes of CO2 equivalent)
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Energy consumed from activities for which the Group is responsible involving the combustion of gas, or the consumption of fuel for the purposes of transport, and the annual quantity of energy consumed resulting from the purchase of electricity by the Group for its own use, including for the purposes of transport, in kWh
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The Group has take measures to improve efficiency and reduce enery consumption through various projects including:
The Group has taken measures to improve efficiency and reduce energy consumption through various projects including the in-housing of production at our Alfreton facility, thereby significantly reducing the number of lorry journeys undertaken between various suppliers. Separately, we have renewed our electricity contract at our main production facility in Derbyshire for 3 years commencing March 2024 and from that date we will be using a 100% renewable electricity supply there.
The intensity ratio of tonnes CO2e per £m sales revenue is 2.16.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
There have been no significant events affecting the Group or Company since the year end.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Once Upon A Time Global Ltd
Independent Auditors' Report to the Members of Once Upon A Time Global Ltd
We have audited the financial statements of Once Upon A Time Global Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 April 2023 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 25 - 37. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.
In our opinion:
∙the financial statements give a true and fair view of the state of the Group's and the parent Company's affairs as at 30 April 2023 and of the Group's loss for the year then ended;
∙the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; and
∙the financial statements 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. responsibilities under those standards are further described in the auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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
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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 Group's or the parent 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.
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Once Upon A Time Global Ltd
Independent Auditors' Report to the Members of Once Upon A Time Global Ltd (continued)
The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' 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 on page 9, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
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Once Upon A Time Global Ltd
Independent Auditors' Report to the Members of Once Upon A Time Global Ltd (continued)
Auditors' 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 auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
• The nature of the industry and sector in which the group operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
• The outcome of enquiries of management, including whether management was aware of any instances of non - compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.
• Supporting documentation relating to the Group's policies and procedures for:
- Identifying, evaluating, and complying with laws and regulations
- Detecting and responding to the risks of fraud
• The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
• The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
• The legal and regulatory framework in which the Group operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Group, including General Data Protection requirements, and Anti-bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
• Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
• Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
• Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
• Enquiring of management about any actual and potential litigation and claims.
• Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Once Upon A Time Global Ltd
Independent Auditors' Report to the Members of Once Upon A Time Global Ltd (continued)
We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. For the UK subsidiary companies within the Group, we have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.
• Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
• Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
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.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' 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. 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 auditors' 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.
Helen Besant-Roberts (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
SK1 1TD
6 October 2023
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Once Upon A Time Global Ltd
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 April 2023
(Loss)/profit for the year
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Other comprehensive income:
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Exchange gains arising on translation of foreign operations
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Total comprehensive income
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The notes on pages 25 to 74 form part of these financial statements.
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Once Upon A Time Global Ltd
Registered number: 12329089
Consolidated Statement of Financial Position
As at 30 April 2023
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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Trade and other liabilities
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Trade and other liabilities
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Once Upon A Time Global Ltd
Registered number: 12329089
Consolidated Statement of Financial Position (continued)
As at 30 April 2023
Issued capital and reserves attributable to owners of the parent
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The financial statements on pages 6 to 74 were approved and authorised for issue by the board of directors and were signed on its behalf by:
The notes on pages 25 to 74 form part of these financial statements.
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Once Upon A Time Global Ltd
Registered number: 12329089
Company Statement of Financial Position
As at 30 April 2023
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Trade and other receivables
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Cash and cash equivalents
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Trade and other liabilities
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Trade and other liabilities
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Once Upon A Time Global Ltd
Registered number: 12329089
Company Statement of Financial Position (continued)
As at 30 April 2023
Issued capital and reserves attributable to owners of the parent
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The Company's profit for the year was £4,194,278 (2022 - loss £2,406,649).
The financial statements on pages 6 to 74 were approved and authorised for issue by the board of directors and were signed on its behalf by:
The notes on pages 25 to 74 form part of these financial statements.
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Once Upon A Time Global Ltd
Consolidated Statement of Changes in Equity
For the Year Ended 30 April 2023
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Total attributable to equity holders of parent
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Comprehensive deficit for the year
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Foreign exchange movement
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Total
comprehensive
income for
the year
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Comprehensive
income for the year
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Foreign exchange movement
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Total
comprehensive
income for
the year
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The notes on pages 25 to 74 form part of these financial statements.
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Once Upon A Time Global Ltd
Company Statement of Changes in Equity
For the Year Ended 30 April 2023
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Comprehensive deficit for the year
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Total comprehensive deficit for the year
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Comprehensive deficit for the year
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Total comprehensive income for the year
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The notes on pages 25 to 74 form part of these financial statements.
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Once Upon A Time Global Ltd
Consolidated Statement of Cash Flows
For the Year Ended 30 April 2023
Cash flows from operating activities
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(Loss)/profit for the year
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Depreciation of property, plant and equipment
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Amortisation of intangible fixed assets
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Impairment losses on intangible assets
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Profit on sale of property, plant and equipment
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Forgiveness of PPP loan (Government grant receivable)
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Foreign exchange movements
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Income tax expense/(credit)
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Movements in working capital:
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Decrease/(increase) in trade and other receivables
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Decrease in trade and other payables
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Cash generated from operations
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Net cash from operating activities
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Cash flows from investing activities
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Acquisition of subsidiaries, net of cash acquired
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Purchases of property, plant and equipment
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Proceeds from disposal of property, plant and equipment
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Payment of contingent consideration relating to prior acquisitions
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Net cash used in investing activities
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Once Upon A Time Global Ltd
Consolidated Statement of Cash Flows (continued)
For the Year Ended 30 April 2023
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Cash flows from financing activities
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Proceeds from other loans
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Payment of lease liabilities
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Net cash (used in)/from financing activities
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Net cash increase in cash and cash equivalents
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Cash and cash equivalents at the beginning of year
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Exchange (loss)/gains on cash and cash equivalents
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Cash and cash equivalents at the end of the year
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The notes on pages 25 to 74 form part of these financial statements.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
∙has power over the investee;
∙is exposed, or has rights, to variable returns from its involvement with the investee; and
∙has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:
∙the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
∙potential voting rights held by the Company, other vote holders or other parties;
∙rights arising from other contractual arrangements; and
∙any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at this time that decisions need to be made, including voting patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
Restatement of prior year Statement of Financial Position
In the prior year financial statements, a provision for redemption premium fees totalling £384,618 was classified as a current liability. In these financial statements, the provision for redemption premium fees has been classified as a non-current liability to more accurately reflect the substance of the provision.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
The financial statements have been prepared on a going concern basis.
Group
The Group had a deficit on retained earnings of £4,148,373 at 30 April 2023 (2022: £1,300,985). The Directors have assessed whether the Group has adequate funding to continue trading over the forthcoming period. To assist in this process, management has prepared a detailed cash flow forecast covering the next 12 months and covenant compliance forecasts covering the next 2 years. These forecasts show that the Group is expected to be strongly cash positive over the next year and comply with the covenants. In addition, actual and forecast performance for the financial period ending 30 April 2023 shows that the group is trading ahead of budget.
In July 2021, the Group and Company's Facilities Agreement with Tosca Debt Capital (Luxembourg) S.A.R.L. ('Tosca') was amended. Tosca provided funding for the initial consideration associated with the acquisition of StormDFX Ltd, and reset financial covenants to include this acquisition. In April 2022, covenants were also reset to incorporate the acquisition of The Special Treats Production Company Ltd. The directors are forecasting compliance with the reset covenants for the next 12 months.
Consequently, the consolidated financial statements have been prepared on a going concern basis.
Company
The Company had a deficit on retained earnings of £388,388 at 30 April 2023 (2022: £4,582,666). The Company is funded by a mixture of share capital, loan notes and the Tosca debt facility. Trading subsidiaries will assist with enabling redemption of the loan notes and settlement of the debt facility. Those subsidiaries will also remit dividends to pay down any intercompany loans that result.
Therefore, the Company's financial statements have been prepared on a going concern basis.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:
∙deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 respectively;
∙liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 at the acquisition date (see note 1.11); and
∙assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business (see note 1.3) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a customer.
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.
Revenue from the sale of goods is recognised on the satisfaction of performance obligations, such as the transfer of a promised good, identified in the contract between the Group and the customer.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. There is limited judgement needed in identifying the point control passes; once physical delivery of the products to the agreed location has occurred, the group no longer has physical possession, usually will have right to payment and retains none of the significant risks and rewards of the goods in question.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
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(ii) Rendering of services
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Revenue from providing services is recognised in the accounting period in which the services are rendered.
For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided because the customer receives and uses the benefits simultaneously. Where contracts included multiple performance obligations, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management. In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered by the Group exceed the payment, a contract asset is recognised (accrued income). If the payments exceed the services rendered, a contract liability is recognised (deferred income).
Revenue from services rendered in respect of marketing and project management for the music and film industries is recognised in the income statement on the delivery of those services based on the proportion of the total delivered that can be reliably measured at the balance sheet date. Individual projects have no alternative use for the Group and the contracts would require payment to be made for the time and effort spent by the Group on progressing the contracts in the event of the customer cancelling the contract prior to completion for any reason other than the Group's failure to perform its obligations under the contract. On partially complete projects, the group recognises revenue based on stage of completion of the project which is estimated by comparing the number of hours actually spent on the project with the total number of hours expected to complete the project (i.e. input-based).
Revenue from media planning and buying services is recognised in the accounts based on the date of publication of the advertisement. The Group acts as principal to its clients by buying media on their behalf. Should the advertisement not appear for any reason, the Group would be liable to compensate itse client and therefore revenue is not recognised immediately when the media is bought.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.
Estimation is required when determining the incremental borrowing rate, the calculation of which is based on the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset. The basis of the calculation was the existing external borrowings held by the Group, which were adjuted to reflect the terms of the leases held by the Group.
Lease payments included in the measurement of the lease liability comprise:
∙fixed lease payments (including in-substance fixed payments), less any lease incentives;
The lease liability is included in the 'Loans and borrowings' line in the Consolidated Statement of Financial Position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are included in the 'Property, Plant and Equipment' in the Consolidated Statement of Financial Position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 1.13.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has used this practical expedient.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
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The Group as a lessee (continued)
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When the group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted using a revised discount rate. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised, except the discount rate remains unchanged. In both cases, an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If the carrying amount of the right-of-use asset is adjusted to zero, any further reduction is recognised in profit or loss.
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.
For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into pounds using exchange rates prevailing at the end of each reporting period.
Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity.
On the disposal of a foreign operation, all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.
Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.
The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid, the Group has no further payment obligations.
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions. Amounts not paid are presented in accruals as a liability in the Consolidated Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
Short-term and other long-term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
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Share-based payment transactions of the Company
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Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 27.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.
For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.
The income tax expense/(credit) represents the sum of the current tax and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the consolidated Consolidated Statement of Profit or Loss and Other Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
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(iii) Current and deferred tax for the year
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Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
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Property, plant and equipment
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Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following range:
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Long-term leasehold property
|
Over the term of the lease
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Over the term of the lease
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Intangible assets acquired separately
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Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
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Impairment of non-financial assets (excluding inventories, investment properties and deferred tax assets)
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Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units ('CGUs'). Goodwill is allocated on initial recognition to each of the Group's CGUs that are expected to benefit from a business combination that gives rise to the goodwill.
Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
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Impairment of tangible and intangible assets other than goodwill
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At the end of each reporting period, the Group 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). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal 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 (see note 1.13).
When an impairment loss subsequently reverses, the carrying amount of the asset (or a 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 (see note 1.13).
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first in, first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
1.Accounting policies (continued)
Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
Investments in unlisted shares, whose market value can be reliably determined, are re-measured to market value at each balance sheet date. Gains and losses on re-measurement are recognised in the Consolidated Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Once Upon A Time Global Ltd (the 'Company') is a limited company incorporated in England and Wales. The Company's registered office is at 17 Bowling Green Lane, Clerkenwell, London, EC1R 0QH. These consolidated financial statements comprise the Company and its subsidiaries (collectively the 'Group' and individually 'Group companies'). The Group is primarily involved in Marketing, Project Management of Music and Film, Media Planning & Buying, and Production services in the entertainment industry.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
The Group's consolidated and the Company's individual financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). They were authorised for issue by the Company's board of directors on 06 October 2023.
Details of the Group's accounting policies, including changes during the year, are included in note 1.
The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to present its own Statement of Comprehensive Income in these financial statements.
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the consolidated financial statements and their effects are disclosed in note 5.
The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.
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Fair value through profit or loss
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3.2 Changes in accounting policies
i) New standards, interpretations and amendments effective from 1 May 2022
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The Directors have considered all new and amended Standards and Interpretations issued by the International Accounting Standards Board (IASB) and the International Reporting Interpretations Committee (IFRIC). There are no material adjustments required to be made to the Company's financial statements as a result.
Management has concluded that there are no material adjustments to be made to the Company's financial statements as a result of the following changes to International Financial Reporting Standards:
- Amendments to IAS 16 - Property, plant and equipment (proceeds before intended use)
- Amendments to IAS 37 - Onerous contracts (the cost of fulfilling a contract)
- Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 (annual improvements to IFRS 2018-2020)
- Amendments to IFRS 3 - References to conceptual framework
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New standards, interpretations and amendments not yet effective
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The following standards, interpretations and amendments have been endorsed in the UK and were not yet effective at the year-end date:
Amended standards applicable for annual periods beginning on 1 January 2023 and beyond
- Amendments to IFRS 17 - Initial Application of IFRS 17 & IFRS 9 – Comparative Information)
- Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies
- Amendments to IAS 8 – Definition of Accounting Estimates
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
3.Basis of preparation (continued)
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ii) New standards, interpretations and amendments not yet effective (continued)
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- Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
Amended standards applicable for annual periods beginning on 1 January 2024 and beyond
- Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
- Amendments to IAS 1 – Non-current Liabilities with Covenants
- Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback
- Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements
Management does not expect any material adjustments to be made to Group's financial statements going forward, as a result of these changes.
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Functional and presentation currency
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These consolidated financial statements are presented in pounds sterling, which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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Accounting estimates and judgements
|
The preparation of financial statements under IFRS requires the Group to make estimates and assumptions that affect the application of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities, are outlined below:
5.1 Judgements
Revenue recognition
The management of the Group exercises judgement in estimating the completeness of projects and measuring progress against performance obligations.
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits. The carrying value of deferred tax assets at 30 April 2023 is £1,000,000 (2022: £1,750,000).
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5.2 Estimates and assumptions
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Impairment reviews
The Directors review the useful economic lives and residual values attributed to assets on an on-going basis to ensure they are appropriate and performs an annual impairment review of goodwill and impairment reviews on tangible and other intangible assets (other than goodwill) when there are indicators of impairment. The recoverable amount is the greater of the net selling price and value in use, where value in use is determined by discounting the future cash flows generated from the continuing use of the unit. The value in use calculation requires management to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Goodwill has a carrying value of £29,502,078 at 30 April 2023 (2022: £32,707,857).
Business combinations
IFRS 3 ‘Business Combinations’ requires that the consideration for an acquisition is recorded at fair value. Where contingent consideration is part of the acquisition cost then the directors estimate the fair value of the amount payable. Contingent consideration is revalued each reporting period according to the latest forecasts of the acquired business based on the terms of the earn-out arrangement. Where deferred consideration is part of an acquisition cost then it is recorded and held on the balance sheet at amortised cost.
Assets and liabilities must also be recognised at fair value on acquisition. The identification and measurement of contingent liabilities and intangible assets are key areas of judgement. For intangible assets, appropriate valuation methods are used, including royalty rates and the income approach to recognise the fair value of the assets acquired.
Contingent consideration
Where the measurement of an investment involves the future performance of the business to be considered, management must exercise judgement and form a view of the probable outcome at the measurement points. Subsequent change to this valuation that is deemed to be an asset or liability is recognised in accordance with IFRS 9 either in profit or loss or as a change to other comprehensive income unless the contingent consideration is classified as equity.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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The following is an analysis of the Group's revenue for the year from continuing operations:
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Analysis of revenue by region of destination:
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Timing of revenue recognition:
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Goods and services transferred over time
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The group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
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Government grants receivable
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Government grant income in the previos period relates to amounts claimed in accordance with the Coronavirus Job Retention Scheme and the proceeds of a loan forgiven by the U.S. Small Business Administration under the Paycheck Protection Program.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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This is stated after charging/(crediting) the following:
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Refinancing and restructuring costs*
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Dilapidations and lease agreement costs*
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Costs associated with business combinations*
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Employee benefit expenses (note 10)
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Depreciation of property, plant and equipment
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Amortisation of intangible assets
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(Profit)/loss on disposal of tangible fixed assets
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Inventories expensed during the year
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*Costs totalling £3,345,344 (2022: £322,338) have been classified by management as Exceptional.
- Exceptional administrative costs totalling £165,008 (2022: £136,117) were incurred in relation to business combinations.
- Goodwill associated with the Group's US business totalling £3,180,336 was impaired during the period.
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During the year, the Group obtained the following services from the Group's auditors:
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Fees payable to the Group's auditors for the audit of the Group's financial statements
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Other services relating to taxation
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
Employee benefit expenses
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Employee benefit expenses (including directors) comprise:
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Defined contribution pension cost
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Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the directors of the Company listed on page 1.
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Defined contribution scheme costs
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The monthly average number of persons, including the directors, employed by the Group during the year was as follows:
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Managerial and administrative
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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Group contributions to pension schemes
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During the year, retirement benefits were accruing to the following number of directors in respect of qualifying services:
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Defined contribution schemes
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During the year, no directors (2022 - no directors) exercised share options.
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The highest paid director's emoluments were as follows:
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
Finance income and expense
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Recognised in profit or loss
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Changes in fair value of contingent consideration
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Other loan interest payable
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Interest on lease liabilities
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Amortisation of debt facility arrangement fees
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Changes in fair value of contingent consideration
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Net finance expense recognised in profit or loss
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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13.1 Income tax recognised in profit or loss
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Current tax on profits for the year
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Adjustments in respect of prior years
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Origination and reversal of timing differences
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
13.Tax expense (continued)
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13.1 Income tax recognised in profit or loss (continued)
|
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
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(Loss)/profit for the year
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Income tax expense (including income tax on associate, joint venture and discontinued operations)
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(Loss)/profit before income taxes
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Tax using the Group's domestic tax rate of 25% (2022:19%)
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Non-tax deductible amortisation of goodwill and impairment
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Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
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Utilisation of tax losses
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Movement in fair value of contingent consideration
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Unrelieved tax losses carried forward
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Other differences leading to an increase/(decrease) in the tax charge
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Changes in tax rates and factors affecting the future tax charges
The Group has losses available to offset against future corporation tax liabilities subject to HMRC approval of approximately £4,500,000 (2022: £13,350,000) and a deferred tax asset of £1,000,000 (2022: £1,750,000) has been recognised in relation to tax losses.
The deferred tax asset has been calculated at rates prevailing when originating differences are expected to reverse, based on legislation substantively enacted at the balance sheet date. From April 2023, the UK Government increased the Corporation Tax rate from 19% to 25% for Companies earning more than £250,000 profit. These rate changes will impact the amount of future tax payments made by the Group.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
13.Tax expense (continued)
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13.2 Current tax assets and liabilities
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13.3 Deferred tax balances
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The following is the analysis of deferred tax assets/(liabilities) presented in the consolidated statement of financial position:
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Recognised in profit or loss
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Property, plant and equipment
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Tax losses carried forward
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Once Upon A Time Global Ltd
|
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Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
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Property, plant and equipment
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Long-term leasehold property
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Fixtures, fittings and equipment
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Acquisition of subsidiary
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Foreign exchange movements
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Foreign exchange movements
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Once Upon A Time Global Ltd
|
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|
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
14.Property, plant and equipment (continued)
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Long-term leasehold property
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Fixtures, fittings and equipment
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Accumulated depreciation and impairment
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Charge for the year on owned assets
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Charge for the year on financed assets
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Charge for the year on owned assets
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Charge for the year on financed assets
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
14.Property, plant and equipment (continued)
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14.1. Assets held under leases
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The net book value of owned and leased assets included as "Property, plant and equipment" in the Consolidated Statement of Financial Position is as follows:
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Property, plant and equipment owned
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Right-of-use assets, excluding investment property
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Information about right-of-use assets is summarised below:
Net book value
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Depreciation charge for the year ended
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Additions to right-of-use assets
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Additions to right-of-use assets
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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Accumulated amortisation and impairment
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Charge for the year - owned
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Charge for the year - owned
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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Foreign exchange movement
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16.1 Allocation of goodwill to cash generating units
|
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Goodwill is allocated to the Group's cash generating unit as follows:
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Once Upon A Time Marketing Limited
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Once Upon A Time Music Limited
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Once Upon A Time Media Limited
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Once Upon A Time Hospitality, Inc.
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Once Upon A Time Activation Limited (Formerly StormDFX Limited)
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Once Upon A Time Content Limited (Formerly The Special Treats Production Company Limited)
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
16.Goodwill (continued)
|
16.1 Allocation of goodwill to cash generating units (continued)
|
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The recoverable amount of goodwill is determined from value-in-use calculations, which are prepared for each Cash Generating Unit ('CGU') and used budgeted cash flows for period one and cash flow projections for periods 2 and 3. Terminal cash flows are based on period 3, assumed to grow perpetually at 2%. The key assumptions forming inputs to cash flows are in revenues and margins. Future revenues have been assessed by reference to existing contracts and an estimate of market volumes, which in turn have been assessed through ongoing discussions with customers, an assesment of the expected trends in wider economic factors and management's knowledge of each CGU. Margins have been assumed to remain broadly at existing levels. All forecasts have been discounted at a post-tax discount rate of 6%.
Goodwill relating to Once Upon A Time Hospitality, Inc. has been fully impaired in the year by management who believe the value-in-use of the CGU to be materially less than that of the goodwill value.
Management believes that no reasonable adjustment to the discount rate or projected margins would cause the carrying value of any other CGU to exceed its recoverable amount.
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|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
Investments and subsidiaries
|
|
Details of the Group's material subsidiaries at the end of the reporting period are as follows:
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Place of incorporation and operation
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Proportion of ownership interest and voting power held by the Group (%)
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1) Once Upon a Time London Ltd
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Intermediate holding company
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2) Once Upon a Time Marketing Limited
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3) Once Upon a TIme Music Limited
|
Integrated project management for the music and film industries (a)
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4) Once Upon a Time Media Limited
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Media planning and buying (a)
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5) Once Upon a Time Activation Limited (formerly StormDFX Limited)
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Design and production agency (a)
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6) Once Upon a Time Content Limited (formerly The Special Treats Production Company Limited)
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Producers of creative content for the entertainment industry (a)
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7) Once Upon a Time United States, Inc.
|
Intermediate holding company (a)
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8) Once Upon a Time Hospitality, Inc.
|
Branding and digital advertising agency (b)
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9) Once Upon a Time Trustee Limited
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Dormant corporate trustee (a)
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(a) These subsidiaries are wholly owned by Once Upon a Time London Ltd.
(b) This subsidiary is owned by Once Upon a Time United States, Inc.
The registered office and place of operation of all UK subsidiaries except for Once Upon a Time Activation Limited and Once Upon a Time Content Limited is 17 Bowling Green Lane, London, EC1R 0BU.
The registered office and place of operation of Once Upon a Time Activation Limited is Hockley Way, Nixs Hill Industrial Estate, Alfreton, Derbyshire, DE55 7FQ. The registered office and place of operation of Once Upon a Time Content Limited is Lower Ground Floor, Grafton House, 2 & 3 Golden Square, London, W1F 9HR.
The registered office of the subsidiaries based in the United States of America is Corporation Trust Center, 1209 Orange Street in the City of Wilmington 19801, County of New Castle, State of Delaware.
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Investments in subsidiary companies
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|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
Trade and other receivables
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Less: provision for impairment of trade receivables
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Prepayments and accrued income
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Total trade and other receivables
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|
Less: current portion - trade receivables
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Less: current portion - prepayments and accrued income
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Less: current portion - other receivables
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Total non-current portion
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The carrying value of trade and other receivables classified as loans and receivables approximates fair value.
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
19.Trade and other receivables (continued)
|
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables. Credit losses have historically been immaterial in each financial period, therefore the provision for loss allowane has been restricted to receivables over 180 days past due. The ageing of the current past due and not impaired financial assets is as follows:
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Movements in the impairment allowance for trade receivables are as follows:
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Provision for receivable impairment
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The movement on the provision for impaired receivables has been included in administrative expenses in the accounts. Other classes of financial assets included within trade and other receivables do not contain impaired assets. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable set out above. The Group did not hold any interest swaps of forward exchange contracts at the period end.
|
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Receivables from related parties
|
|
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|
Total financial assets other than cash and cash equivalents classified as loans and receivables
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
Total trade and other receivables
|
|
|
|
|
|
|
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
|
|
|
|
|
|
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|
|
|
|
|
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|
|
|
Total financial liabilities, excluding loans and borrowings
|
|
|
|
Other payables - tax and social security payments
|
|
|
|
|
|
|
|
Total trade and other payables
|
|
|
|
Less: current portion - trade payables
|
|
|
|
Less: current portion - other payables
|
|
|
|
Less: current portion - accruals
|
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|
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Less: current portion - deferred income
|
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|
|
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|
|
Total non-current position
|
|
|
|
The carrying value of trade and other payables classified as financial liabilities measured at amortised cost is £11,391,738 (2022: £9,752,033) and approximates fair value. The carrying value of trade and other payables, classified as financial liabiltiies and measured at fair value through profit or loss, totals £6,286,444 (2022: £8,192,549), representing contingent consideration liabilities (see Note 26.7).
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|
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Total financial liabilities, excluding loans and borrowings
|
|
|
|
Less: current portion - trade payables
|
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|
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Less: current portion - accruals
|
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|
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|
|
Total non-current position
|
|
|
|
The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.
|
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
|
|
|
|
Other loans and unamortised arrangement fees
|
|
|
|
Secured fixed rate loan notes
|
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|
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|
|
|
Total loans and borrowings
|
|
|
The carrying value of loans and borrowings classified as financial liabilities measured at amortised cost approximates fair value.
|
|
|
|
|
Other loans and amortised arrangement fees
|
|
|
|
Total loans and borrowings
|
|
|
The carrying value of loans and borrowings classified as financial liabilities measured at amortised cost approximates fair value.
Loans from directors
Loans from directors are unsecured. Interest accrues at 10% per annum and is payable on repayment of the principal amount of the loans. The loans are repayable on demand following the date falling 2 years from the date of the agreements and, at the latest, the date falling 5 years from the date of the agreements.
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
21.Loans and borrowings (continued)
Other loans - terms and compliance
On 20 December 2019, the Group entered into a Facilities Agreement with Tosca Debt Capital (Luxembourg) S.A.R.L. and has subsequently entered into two incremental Facilities Agreements. The Terms of the Facilities Agreements during the year are summarised as follows:
Provider: Tosca Debt Capital
Total Facilities: £14.4m
Termination date: 20 December 2025
Interest: Capitalised margin of 5% per annum; Cash Pay margin of 5% plus Sonia payable quarterly.
Repayment: The Total Facilities and Capitalised margin to be paid as a bullet on the Termination Date.
It was agreed in July 2021 that a redemption premium fee will be payable in relation to the Facilities Agreement with Tosca. This will be on the earlier of a) an exit, b) a refinancing and c) the Facility termination date, and the Group and Company must pay Tosca 10% of the difference between the equity value and £1m (to the extent equity value exceeds £1m). A provision for a redemption premium fee totalling £1,270,701 (2022: £384,618) has been accounted for at 30 April 2023 (see note 22).
Arrangement fees of £664,068 (2022: £913,094) were netted off against other loans at the end of the period, with arrangement fees of £249,026 (2022: £249,026) being amortised through the Consolidated Statement of Comprehensive Income during the year.
Loan notes - terms
At the same time as the above agreement being made, the Company purchased the remaining share capital of Once Upon a Time London Ltd. With the exception of Calculus Nominees Limited, shares held in Once Upon a Time London Ltd were exchanged on a one-for-one basis with shares in OUAT Global. The shares held by Calculus Nominees Limited, which represented 38% of the share capital, were purchased for £4,000,000. £2,000,000 of the amount payable was settled in cash on 20 December 2019, whilst the remainder was converted to a loan note. The loan note is due to be redeemed in December 2025.
Interest on the loan notes accrues at a rate of 10% per annum until (and including) December 2024, and thereafter at a rate of 12% until the final redemption date.
The loan notes are secured under the terms of a loan note debenture, by way of a fixed and floating charge over the assets of the Company. The subsidiary undertakings, Once Upon a Time London Ltd, Once Upon a Time Marketing Limited, Once Upon a Time Music Limited and Once Upon a Time Media Limited, have entered a guarantee and indemnity for the benefit for the Noteholder.
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
|
Provision for redemption premium fees
|
|
|
|
|
|
|
|
|
|
|
Charged to profit or loss
|
|
|
|
|
|
Due after more than one year
|
|
|
|
|
|
In July 2021, the Group's Facilities Agreement with Tosca Debt Capital (Luxembourg) S.A.R.L. was amended, provided funding for the initial consideration of Once Upon a Time Activation Limited (formerly StormDFX Limited) and other acquisitions. It was also agreed in July 2021 that a redemption premium fee will be payable in relation to the Facilities Agreement with Tosca. This will be on the earlier of a) an exit, b) a refinancing and c) the Facility termination date (December 2025), and the Group and Company must pay Tosca 10% of the difference between the equity value and £1m (to the extent equity value exceeds £1m).
A provision for redemption premium fees (effectively interest) has been accounted for at 30 April 2023 on the basis that the ultimate amount is uncertain but can be reliably estimated. The costs will continue to be recognised as interest over the period of time up until a redemption 'event' takes place. The main uncertainties relate to the timing of when the redemption premium fee will crystallise, and the equity value may change over time.
|
|
|
Provision for redemption premium fees
|
|
|
|
|
|
|
|
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|
|
Charged to profit or loss
|
|
|
|
|
|
Due after more than one year
|
|
|
|
|
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
|
|
|
|
|
|
Ordinary shares of £0.01 each
|
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|
|
Ordinary shares of £0.01 each
|
|
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|
|
Share premium
The share premium account includes any premium received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from the share premium.
Foreign exchange reserve
The foreign exchange reserve includes all gains and losses arising on retranslating the net assets of overseas operations into GBP.
Merger reserve
The merger reserve arose on a business combination that was accounted for as a merger.
Retained earnings
The retained earnings reserve includes all current and prior periods retained profit and losses.
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
|
|
The Group leases property, plant and machinery, computer equipment and motor vehicles. These leases comprise fixed payments over the lease terns.
|
|
Lease liabilities are due as follows:
|
|
|
|
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|
|
Contractual undiscounted cash flows due
|
|
|
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|
|
Between one year and five years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease liabilities included in the Consolidated Statement of Financial Position at 30 April
|
|
|
|
The following amounts in respect of leases have been recognised in profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on lease liabilities
|
|
|
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
|
Financial instruments - fair values and risk management
|
|
|
26.1 Accounting classifications and fair values
|
|
|
The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
|
|
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|
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|
|
Financial assets measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities measured at fair value
|
|
|
|
|
|
|
|
|
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|
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|
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|
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|
|
Financial liabilities not measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FVTPL means fair value through profit or loss.
|
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
26.Financial instruments - fair values and risk management (continued)
|
26.1 Accounting classifications and fair values (continued)
|
|
Financial assets measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Financial liabilities not measured at fair value
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables includes contingent consideration liabilities which are measured at fair value through profit or
loss totalling £6,286,444 (2022: £8,192,549).
|
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
26.Financial instruments - fair values and risk management (continued)
|
26.2 Financial risk management objectives
|
The Board has overall responsibility for the determination of the Group's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's finance function. The Board received monthly reports from the Group Finance function through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk) and foreign exchange rates (currency risk).
|
26.4 Foreign currency risk management
|
|
The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
26.Financial instruments - fair values and risk management (continued)
|
26.4 Foreign currency risk management (continued)
|
|
Foreign currency sensitivity analysis
|
|
The Group is mainly exposed to the US Dollar.
The following table details the Group's sensitivity to a 10% increase and decrease in the pounds sterling against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower. A positive number below indicates an increase in profit or equity where the pounds sterling strengthens 10% against the relevant currency. For a 10% weakening of the pounds sterling against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.
|
|
|
|
|
|
|
|
|
|
|
26.5 Interest rate risk management
|
The Group is exposed to movements in interest rates on its borrowings and this risk is controlled by primarily using fixed rate loan finance lease facilities in order to mitigate its interest rate exposure. The only debt facility which includes a variable rate is the Tosca Debt Capital facility which includes interest at a capitalised margin of 6% and a cash pay margin of 6%, plus SONIA. If SONIA is below 0.5% then a rate of 0.5% applies.
Interest rate sensitivity analysis
Management has calculated that interest costs would have been approximately £0.1m higher if the SONIA rate had been 3.5% throughout the year.
|
26.6 Credit risk management
|
The Group is exposed to credit risk with respect to trade receivables due from its customers. The Group assesses the credit risk of new customers before entering into new contracts, sets credit limits accordingly and monitors outstanding balances in accordance with these. The Group takes a prudent view in assessing the risk of non-payment and considers provision for all debts more than 3 months in arrears unless there are specific circumstances to indicate that there is little or no risk of non-payment of these older debts.
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
26.Financial instruments - fair values and risk management (continued)
26.7 Fair value measurements
This note provides information about how the Group determines fair values of various financial assets and liabilities.
Fair value of financial assets and liabilities that are measured at fair value on a recurring basis
Some of the Group's financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).
|
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|
Valuation technique(s) and key input(s)
|
|
|
|
|
|
|
|
Contingent consideration liability
|
|
|
|
Management prepares forecasts on a regular basis and uses latest available information to update its estimation of contingent consideration payable.
|
|
Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
|
|
|
27.1. Employee share option plan of the Company
|
|
Details of the employee share option of the Company
|
During the year, Once Upon a Time Global Ltd granted 6,244 EMI share options in respect of Ordinary shares to directors and key management personnel of the Group.
|
The following share-based payment arrangements were in existence during the current and prior years:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements in share options during the year
|
|
The following reconciles the share options outstanding at the beginning and end of the year:
|
|
|
|
|
|
|
|
Weighted average exercise price
|
|
Weighted average exercise price
|
|
|
|
|
|
|
|
|
|
|
|
|
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Balance at the beginning of the year
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Forfeited during the year
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Outstanding at 30 April 2023
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Of the total number of options outstanding at 30 April 2023, none had vested and none were exercisable. Options lapse at the latest on the 10th anniversary of the date of grant, but lapse earlier after certain specified dates (such as sale of the Company or cessation of employment).
None of the options had been exercised at the balance sheet date. Exercise prices range from £0.84 to £36.46 per share. The fair value of the options has been assessed and no equity-settled share-based payment expense has been accounted for on the basis that the expense would be immaterial.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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Related party transactions
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Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.
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28.1 Trading transactions
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During the year, group entities entered into the following trading transactions with related parties that are not members of the Group:
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Purchases from related parties
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Acorn Capital Partners Limited (a)
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Foulger Transport Limited (a)
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Interest accrued on shareholder loan (b)
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The following balances were outstanding at the end of the reporting period:
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Amounts owed to related parties
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Acorn Capital Partners Limited (a)
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Foulger Transport Limited (a)
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Interest accrued on shareholder loan (b)
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
28.Related party transactions (continued)
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28.1 Trading transactions (continued)
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The nature of the relationship and the transactions entered in to with the related parties are:
(a) G R Norfolk, a director, is also a director of Acorn Capital Partners Limited, Kinaxia Limited and Foulger Transport Limited. Directors' fees are payable to Acorn Capital Partners Limited and a subsidiary transacted with Foulger Transport Limited during the period (and Kinaxia Limited during the prior period).
b) D A Charlton, a director, has loans totalling £350,000 due from the group, which is included within Loans and borrowings. Interest is accruing at 10% p.a. and £234,482 is included within Trade and other payables.
J E Garton, a director, has a loan totalling £100,000 due from the group, which is included within Loans and borrowings. Interest is accruing at 10% p.a. and £51,146 is included within Trade and other payables.
Other transactions
A group undertaking advanced amounts totalling £25,000 to a member of key management personnel during a prior period under the terms of a loan agreement. The loan is unsecured, interest-free and repayable by equal monthly instalments over a 3 year period. The maximum amount outstanding during the year was £17,361 and the balance outstanding at the balance sheet date was £9,028.
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There is no overall controlling party.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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Business combinations completed in prior periods
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For previous business combinations with contingent consideration, the amounts recognised have changed during the year as follows:
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Once Upon a Time Activation Limited
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Once Upon a Time Content Limited
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Once Upon a Time Hospitality Inc.
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Consideration paid during year
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Foreign exchange movement
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Liability at 30 April 2023
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Revaluations of contingent consideration liability relate to alterations in the expected liability due to changes in the expected future performance of the two companies.
Due to a material change in the expected future performance of Once Upon a Time Hospitality Inc. and a subsequent increase in the period over which the liability will be settled, management have opted to discount future contingent consideration payments to factor in the time value of money. An adjustment has been made to the liability to reflect a payment made during the period. A foreign exchange movement has also arisen on the Once Upon a Time Hospitality, Inc. liability as the original currency is US Dollars.
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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Notes supporting statement of cash flows
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Cash at bank available on demand
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Cash and cash equivalents in the statement of financial position
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Cash and cash equivalents in the statement of cash flows
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Cash at bank available on demand
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Cash and cash equivalents in the statement of financial position
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Cash and cash equivalents in the statement of cash flows
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Once Upon A Time Global Ltd
Notes to the Consolidated Financial Statements
For the Year Ended 30 April 2023
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Capital comprises share capital, share premium and retained earnings. The Group's objective when maintaining capital is to safeguard the Group's ability to continue as a going concern so that it can provide returns to shareholders and benefits for other stakeholders.
The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
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Net debt is calculated as total debt less cash and cash equivalents.
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The Group is not subject to any externally imposed capital requirements.
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The gearing ratios at 30 April 2023 and 30 April 2022 were as follows:
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Cash and cash equivalents
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Net debt to total equity ratio
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The increase in the Net debt to total equity ratio resulted primarily due to losses in the year impacting retained earnings. The impairment of goodwill relating to Once Upon a Time Hospitality, Inc totalling £3,180,336 is considered an exceptional cost by management as it has had a material impact on the consolidated profit of the Group in this period.
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