The directors present the strategic report for the year ended 31 December 2022.
The principal activity of the Company was that of an investment holding company.
Dividend income for the year was £25,874,091 (2021: £nil) with a net profit of £25,874,091 achieved (2021: £nil). During the year, Incisive Media Group Holdings Limited (‘the Company’) along with its subsidiaries (‘the Group’) were acquired by Arc Media Holdings Limited, the Company and the Group’s immediate parent entity. On 30 June 2022, part of the Group was sold to The Channel Company International Limited with funds received remunerated back to the immediate parent entity by virtue of a dividend.
At the balance sheet date, the Company had net assets of £6,768,975 (2021: £6,540,131).
As an intermediate holding company of the Arc Group, that does not trade, the Directors do not review principal risks and uncertainties in isolation, but together with the results of the trading companies.
Interest rate risk – The interest charged on the Group’s banking facilities is monitored on a regular basis and the rate negotiated where necessary in order to minimise the interest payable.
Liquidity risk – Liquidity needs to be maintained in order to assist the Group's working capital. The time lag between the performance of work and the receipt of cash from customers could potentially pose a threat to the continued trade. Tight credit control is in place to mitigate this risk.
The financial results of The Company are reported on page 9 of the financial statements.
The directors do not believe there are any Key Performance Indicators for the Company as an investment holding company that only generates dividend income from its Group.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £25,874,091 classed as Interest receivable and similar income within the Statement of Comprehensive Income. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, BDO LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Company is in a net asset position and meets its day to day working capital requirements through the performance of its investments and intercompany balances. The company is financially supported by Arc Investco Limited which has confirmed that it will continue to provide ongoing financial support for the company for the foreseeable future and a period of at least 12 months plus one day from the issuance of the financial statements.
In respect of the intercompany loan balance of £4,471,156 due to Incisive Business Media Limited, confirmation has been obtained that repayment of the balance will not be demanded or sought unless the company has the financial resources available to do so. On the basis of this assessment, the directors consider that the company has adequate resources to operate for the foreseeable future, and as such, has adopted the going concern basis in preparing these financial statements.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
Our understanding of the Company and the industry in which it operates;
Discussion with management and those charged with governance; and
Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations.
we considered the significant laws and regulations to be Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice), the Companies Act of 2006, Data Protection Act 2018, General Data Protection Regulation (GDPR), and UK tax legislation.
The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be regulations such as National Insurance and VAT requirements.
Our procedures in respect of the above included:
Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations;
Review of correspondence with tax authorities for any instances of non-compliance with laws and regulations;
Review of financial statement disclosures and agreeing to supporting documentation;
Agreed audited financial statement figures to the tax computation prepared by management’s tax preparer and recalculated key tax figures; and
Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
Obtaining an understanding of the Company’s policies and procedures relating to:
Detecting and responding to the risks of fraud; and
Internal controls established to mitigate risks related to fraud.
Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls and revenue.
Our procedures in respect of the above included:
Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation;
Assessing significant estimates made by management for bias; and
Reviewing the revenue recognition process per stream and identified potential gaps in the process to identify what could go wrong and how it could result in incorrect revenue recognition. Obtaining an understanding of the processes and controls that the Company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how management monitors processes and controls; and
Testing on a sample basis revenue to relevant stream-specific support to ascertain appropriate revenue recognition.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
There was no other comprehensive income for 2022 (2021: £nil).
The notes on pages 12 to 19 form part of these financial statements.
The notes on pages 12 to 19 form part of these financial statements.
The notes on pages 12 to 19 form part of these financial statements.
Incisive Media Group Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is New London House, 172 Drury Lane, London, WC2B 5QR. The Company's principal activities are set out in the strategic report.
The financial statements are prepared in pound sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
Incisive Media Group Holdings Limited is a wholly owned subsidiary of Arc Media Holdings Limited and the results of Incisive Media Group Holdings Limited are included in the consolidated financial statements of Arc Investco Limited as at 31 December 2022 which are available from Unit 4 Fulwood Park, Caxton Road, Fulwood, Preston, PR2 9NZ.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. Dividends receivable are recognised once the subsidiary entity has formally voted to pay a dividend to its equity shareholder.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Judgements are required in assessing the recoverable value of the company's investments. Where indications of impairment exist the company reviews the carrying value of its investments for principal impairment based on their recoverable values, being the higher of the investments value in use and fair value less costs to sell.
We consider the need for any provision for impairment of the carrying value of amounts owed by group undertakings, based on management's estimate of the prospect of recovering the amounts due, which includes considering the solvency of the counterparty and its future outlook, based on budgets and forecasts prepared by management. No such provisions have been made as at 31 December 2022.
The company has no employees other than the directors, who did not receive any remuneration from this Company. The directors were remunerated by other group entities.
During the year, the company received a dividend from its subsidiary company amounting to £25,874,091 (2021: £nil).
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
Factors that may affect future tax charges
The Finance Act 2021 was substantively enacted in May 2021 and increased the corporation tax rate from 19% to 25% with effect from 1 April 2023. As this increase in rate was not enacted at the reporting date, there is no impact on the calculation of tax at the reporting date.
During the year, the Company declared and paid a dividend to its shareholders of £25,874,091 (2021: £800,000). No amounts were outstanding in respect of this dividend at the year end (2021: £nil).
Details of the company's subsidiaries at 31 December 2022 are as follows:
Amounts owed from group undertakings are unsecured, interest free, have no fixed date of repayments and are repayable on demand.
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayments and are repayable on demand.
Ordinary A shares and Ordinary C shares have full rights in the company with respect to voting, dividends and distributions.
Ordinary B shares have full rights in the company with respect to dividends and distributions but do not have voting rights.
700 B shares were issued on 30 March 2022 on the exercise of options held by the directors at that date. The aggregate nominal value of the shares issued was £7 and the consideration received was £228,844.
The company has taken advantage of the exemption under paragraph 33.1A of the Financial Reporting Standard 102 not to disclose transactions with other wholly owned members of the group.
The immediate parent undertaking is Arc Media Holdings Limited. The ultimate parent company is Arc Investco Limited. This is the only group of which the company is a member for which group financial statements are prepared. Copies of the group financial statements are available from the company's registered office at Unit 4 Fulwood Park, Caxton Road, Fulwood, Preston, England, PR2 9NZ.
There is no ultimate controlling party.