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Registration number: 13751139

VU X EartH Limited

Annual Report and Consolidated Financial Statements

for the Period from 1 December 2021 to 30 September 2022

Brebners
Chartered Accountants & Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

 

VU X EartH Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 9

Consolidated Income Statement

10

Consolidated Statement of Comprehensive Income

11

Consolidated Statement of Financial Position

12

Statement of Financial Position

13

Consolidated Statement of Changes in Equity

14

Statement of Changes in Equity

15

Consolidated Statement of Cash Flows

16

Notes to the Financial Statements

17 to 39

 

VU X EartH Limited

Company Information

Directors

A T Foxcroft

G Stratenwerth

M T Silverman

Registered office

54 Holywell Lane
London
EC2A 3PQ

Auditor

Brebners
Chartered Accountants & Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

 

VU X EartH Limited

Strategic Report for the period from 1 December 2021 to 30 September 2022

The directors present their strategic report for the period from 1 December 2021 to 30 September 2022.

Principal activity

VU X EARTH is the parent company of the group which consists of two sites, Village Underground, a music and arts venue in Shoreditch, and EartH, a music and arts venue in Dalston. Both venues also host and produce corporate and private events, as well as ancillary activities. EartH runs education and training programmes for local young people.

Fair review of the business

The group's business emerged positively from COVID 19 lockdown and associated restrictions, with a successful first quarter. The business benefited from pent up demand in our core demographics, bolstered by the success of the soundproofing project at EartH, which for the first time allowed the venue to run multiple events simultaneously.

In December 21, the Omicron variant created adverse trading conditions, with a similar effect to lockdown, in that the majority of our events were cancelled in the second quarter. However, the business submitted a successful grant application to the Cultural Recovery Fund (COVID related funding for the arts, administered by the Arts Council) and finished the quarter ahead of budget as a result.

The damage to our sector wrought by Omicron was felt throughout the year, primarily through the loss of international artist tours, who felt that the risk of cancellation was too high to continue. February 2022 saw the invasion of Ukraine, followed shortly by rising energy prices and deteriorating economic commentary, which ushered in rising inflation and the cost of living crisis. As a result, our customers reduced their discretionary spending and we experienced a drop in ticket sales, leading to cancelled events.

Our Social Impact targets are on track for the year and our main partner/shareholder Big Issue Invest continues to be supportive, as do Triodos Bank and Arts Impact Fund.

Financial KPIs

The company's key financial performance indicators during the period were the Turnover of £2.7m; Gross Profit of £1.3m; and Gross Margin of 47%.

 

VU X EartH Limited

Strategic Report for the period from 1 December 2021 to 30 September 2022

Principal risks and uncertainties

The company’s and group’s principal financial instruments comprise bank loans, lease hire facilities, trade debtors and trade creditors. The main purpose of the instruments is to support the cashflow requirements of the group as it invests to grow the business. The group’s approach to managing risks applicable to the financial instruments is shown below.

In respect of bank loans, the risk arising from interest rate changes is managed through financial forecasting and measuring future debt-service coverage ratios.

In respect of bank balances, the liquidity risk is managed by careful budgeting and maintaining good relationships with suppliers to ensure no shortfall arises on liabilities due for payment.

Trade debtors are managed in respect of credit and cashflow risk by ensuring that amounts outstanding are regularly monitored.

The cost of living crisis is a principal risk. The business manages this by monitoring and working to improve our core KPIs: Turnover, Gross Profit and Gross Margin. The directors are pleased with the Turnover of £2.7m in the period; Gross Profit of £1.3m; Gross Margin of 47%. Both Turnover and Gross Profit increased by more than 100% vs the combined performance of Village Underground and EartH in the prior year, bolstered by the industry’s recovery from the COVID pandemic; the Gross Margin is consistent with prior years.

Future developments

The directors are pleased with the performance of the business as it reopened post COVID with a strong quarter. Further the directors are pleased with the successful capex projects, most notably the soundproofing, new bars and terrace, which have opened up new avenues to growth. The directors are monitoring closely the level of cancelled events, bar spends and event GPs, resulting from the cost of living crisis and macro-economic situation, which has similarly hit the Hospitality Sector across the board.

The directors look forward to growing the business over the coming year, developing more detailed controls and procedures, investing time and focus into programming events as we emerge from the post COVID market back to greater stability. Of particular importance in the current climate are cost control procedures. Every ticketed event has a number of detailed cost models relating to varying levels of possible attendance and SPH, which forms the basis of a forecast P&L. Each event is forecast against these variables, with a projected P&L, actual P&L and variances. Variances are measured on an ongoing basis to track trends and ensure budget levels are maintained or improved.

Subsequent events

Subsequent to 30 September 2022, the company allotted and issued further A Ordinary shares for an aggregate consideration of £500,000 to provide additional working capital.

Approved by the Board on 24 November 2023 and signed on its behalf by:

.........................................
A T Foxcroft
Director

 

VU X EartH Limited

Directors' Report for the Period from 1 December 2021 to 30 September 2022

The directors present their report and the for the period from 1 December 2021 to 30 September 2022.

Directors of the group

The directors who held office during the period were as follows:

A T Foxcroft

G Stratenwerth

M T Silverman

Dividends

No interim dividends have been paid (2021: £Nil). No final dividend is proposed.

Information included in the Strategic Report

The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of future developments and financial risk management and exposure.

Directors' liabilities

As permitted by the Articles of Association, the directors have the benefit of an indemnity which is a qualifying third party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force.

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Approved by the Board on 24 November 2023 and signed on its behalf by:

.........................................
A T Foxcroft
Director

 

VU X EartH Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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 and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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.

 

VU X EartH Limited

Independent Auditor's Report to the Members of
VU X EartH Limited

Qualified opinion

We have audited the financial statements of VU X EartH Limited (the 'parent company') and its subsidiaries (the 'group') for the period from 1 December 2021 to 30 September 2022, which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:

give a true and fair view of the state of the group's and the company's affairs as at 30 September 2022 and of the group's loss for the period then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion

We were not appointed as auditor of the group until after 30 September 2022 and thus did not observe the counting of physical inventories at the end of the period. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 30 September 2022, which are included in the consolidated statement of financial position at £79,096, by using other audit procedures.

Consequently we were unable to determine whether any adjustment to this amount was necessary. In addition, were any adjustment to the inventory balance to be required, the strategic report would also need to be amended.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Emphasis of matter

We draw attention to Note 2 to the financial statements which describes the key sources of estimation uncertainty, and in particular, the key assumptions used by the directors in determining the carrying values of investments in the company's statement of financial position and goodwill in the group's consolidated statement of financial position. Our opinion is not modified in respect of this matter.

Key audit matters

Except for the matter described in the basis for qualified opinion section, we have determined that there are no key audit matters to be communicated in our report.

 

VU X EartH Limited

Independent Auditor's Report to the Members of
VU X EartH Limited

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the inventory quantities of £79,096 held at 30 September 2022. We have concluded that where the other information refers to the inventory balance or related balances such as cost of sales, it may be materially misstated for the same reason.

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 group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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.

Opinion on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

the information given in the Strategic Report and Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

Except for the matter described in the basis for qualified opinion section of our report, in the light of our knowledge and understanding of the group and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

Arising solely from the limitations on the scope of our work relating to inventory referred to above:

we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

we were unable to determine whether adequate accounting records have been kept.

 

VU X EartH Limited

Independent Auditor's Report to the Members of
VU X EartH Limited

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 5], 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.

Auditor Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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:

Based on our understanding of the group and the industry in which it operates, we determined that the principal risks of non-compliance with laws and regulations related to the reporting framework (FRS 102 and the Companies Act 2006) and UK corporate taxation laws, health and safety legislation, and data protection legislation. These risks were communicated to our audit team and we remained alert to any indications of non-compliance throughout our audit.

We understood how the group is complying with relevant legislation by making enquiries of management. We also considered the results of our audit procedures and to what extent these corroborate this understanding and assessed the susceptibility of the group’s financial statements to material misstatement. This included consideration of how fraud might occur and evaluation of management’s incentives and opportunities for fraudulent manipulation of the financial statements.

We designed our audit procedures to identify any non-compliance with laws and regulations. Such procedures included, but were not limited to, inspection and understanding of legal costs; challenging assumptions and judgements made by management; identifying and testing journal entries with a focus on large or unusual transactions as determined based on our understanding of the business; and identifying and assessing the effectiveness of controls in place to prevent and detect fraud.

Owing to the inherent limitations of an audit, there remains a risk that a material misstatement may not have been detected, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance with laws and regulations and cannot be expected to detect all instances of non-compliance.

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

VU X EartH Limited

Independent Auditor's Report to the Members of
VU X EartH Limited

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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 auditor's report.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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.

......................................
Martin Widdowson (Senior Statutory Auditor)
For and on behalf of

Brebners, Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

24 November 2023

 

VU X EartH Limited

Consolidated Income Statement for the Period from 1 December 2021 to 30 September 2022

Note

2022
£

2021
£

Turnover

3

2,704,013

-

Cost of sales

 

(1,425,829)

-

Gross profit

 

1,278,184

-

Administrative expenses

 

(4,499,429)

-

Other operating income

4

867,307

-

Operating loss

5

(2,353,938)

-

Interest payable and similar expenses

6

(380,756)

-

Loss before tax

 

(2,734,694)

-

Tax on (loss)/profit

10

(15,178)

-

Loss for the financial period

 

(2,749,872)

-

Profit/(loss) attributable to:

 

Owners of the company

 

(2,749,872)

-

 

VU X EartH Limited

Consolidated Statement of Comprehensive Income for the Period from 1 December 2021 to 30 September 2022

2022
£

2021
£

Loss for the period

(2,749,872)

-

Total comprehensive income for the period

(2,749,872)

-

Total comprehensive income attributable to:

Owners of the company

(2,749,872)

-

 

VU X EartH Limited

Consolidated Statement of Financial Position as at 30 September 2022

Note

30 Sep
2022
£

30 Nov
2021
£

Fixed assets

 

Intangible assets

11

7,462,893

-

Tangible assets

12

4,367,465

-

 

11,830,358

-

Current assets

 

Stocks

15

79,096

-

Debtors

16

400,815

-

Cash at bank and in hand

 

517,601

1

 

997,512

1

Creditors: Amounts falling due within one year

18

(2,341,513)

-

Net current (liabilities)/assets

 

(1,344,001)

1

Total assets less current liabilities

 

10,486,357

1

Creditors: Amounts falling due after more than one year

18

(3,436,407)

-

Provisions for liabilities

20

(22,539)

-

Net assets

 

7,027,411

1

Capital and reserves

 

Called up share capital

22

9,777,283

1

Retained earnings

23

(2,749,872)

-

Equity attributable to owners of the company

 

7,027,411

1

Shareholders' funds

 

7,027,411

1

Approved and authorised by the Board on 24 November 2023 and signed on its behalf by:
 

.........................................

A T Foxcroft
Director

Company registration number: 13751139

 

VU X EartH Limited

Statement of Financial Position as at 30 September 2022

Note

30 Sep
2022
£

30 Nov
2021
£

Fixed assets

 

Investments

13

7,756,931

-

Current assets

 

Debtors

16

1,624,097

-

Cash at bank and in hand

 

-

1

 

1,624,097

1

Creditors: Amounts falling due within one year

18

(13,586)

-

Net current assets

 

1,610,511

1

Total assets less current liabilities

 

9,367,442

1

Creditors: Amounts falling due after more than one year

18

(1,405,555)

-

Net assets

 

7,961,887

1

Capital and reserves

 

Called up share capital

22

9,777,283

1

Retained earnings

(1,815,396)

-

Shareholders' funds

 

7,961,887

1

The company made a loss after tax for the financial period of £1,815,396 (2021 - £Nil).

Approved and authorised by the Board on 24 November 2023 and signed on its behalf by:
 

.........................................
A T Foxcroft
Director

Company registration number: 13751139

 

VU X EartH Limited

Consolidated Statement of Changes in Equity for the Period from 1 December 2021 to 30 September 2022
Equity attributable to the parent company

Share capital
£

Retained earnings
£

Total
£

Total equity
£

At 1 December 2021

1

-

1

1

Loss for the period

-

(2,749,872)

(2,749,872)

(2,749,872)

New share capital subscribed

9,777,283

-

9,777,283

9,777,283

Other share capital movements

(1)

-

(1)

(1)

At 30 September 2022

9,777,283

(2,749,872)

7,027,411

7,027,411

Share capital
£

Retained earnings
£

Total
£

Total equity
£

New share capital subscribed

1

-

1

1

At 30 November 2021

1

-

1

1

 

VU X EartH Limited

Statement of Changes in Equity for the Period from 1 December 2021 to 30 September 2022

Share capital
£

Retained earnings
£

Total
£

At 1 December 2021

1

-

1

Loss for the period

-

(1,815,396)

(1,815,396)

New share capital subscribed

9,777,283

-

9,777,283

Other share capital movements

(1)

-

(1)

At 30 September 2022

9,777,283

(1,815,396)

7,961,887

Share capital
£

Retained earnings
£

Total
£

New share capital subscribed

1

-

1

At 30 November 2021

1

-

1

 

VU X EartH Limited

Consolidated Statement of Cash Flows for the Period from 1 December 2021 to 30 September 2022

Note

2022
£

2021
£

Cash flows from operating activities

Loss for the period

 

(2,749,872)

-

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

1,051,421

-

Write down loss on goodwill

 

1,559,080

-

Loss on disposal of tangible assets

3,204

-

Finance costs

6

380,756

-

Income tax expense

10

15,178

-

 

259,767

-

Working capital adjustments

 

Increase in stocks

 

(53,428)

-

Decrease in trade and other debtors

 

91,847

-

Decrease in trade and other creditors

 

(222,235)

-

Cash generated from operations

 

75,951

-

Income taxes paid

 

(63,273)

-

Net cash flow from operating activities

 

12,678

-

Cash flows from investing activities

 

Acquisitions of tangible assets

(458,319)

-

Acquisition of subsidiaries

 

(106,139)

-

Cash acquired on acquisition of subsidiaries

 

688,612

-

Net cash flows from investing activities

 

124,154

-

Cash flows from financing activities

 

Interest paid

 

(197,423)

-

Proceeds from issue of ordinary shares

 

1,750,000

1

Repayment of borrowings

 

(1,037,894)

-

Payments to finance lease creditors

 

(133,915)

-

Net cash flows from financing activities

 

380,768

1

Net increase in cash and cash equivalents

 

517,600

1

Cash and cash equivalents at 1 December

 

1

-

Cash and cash equivalents at 30 September

 

517,601

1

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
54 Holywell Lane
London
EC2A 3PQ

VU X EARTH is the parent company of the group which consists of two sites, Village Underground, a music and arts venue in Shoreditch, and EartH, a music and arts venue in Dalston. Both venues also host and produce corporate and private events, as well as ancillary activities. EartH runs education and training programmes for local young people.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except any items disclosed in the accounting policies as being shown at fair value and are presented in sterling, which is the functional currency of the entity.

Going concern

The group made a loss for the period ended 30 September 2022 of £2,749,872 although the group had net assets at that date amounting to £7,027,411.

The directors are confident that attendances at events will continue to improve following the lifting of all COVID-19 restrictions. The directors have exercised control over overheads where possible and taken advantage of the various COVID support schemes where available. The directors have produced cash flow budgets and profitability forecasts for both expected as well as sensitised cases and are confident that the group has sufficient resources to continue its operations for the foreseeable future.

The group's working capital requirements are currently met via a combination of cash reserves, trade creditors, bank facilities, and finance leases. Subsequent to the period end, the group has renegotiated payment terms for key loan agreements and increased the repayment periods. The directors have no reason to believe that any of these facilities will be discontinued. As a consequence, the directors believe that the group is well placed to continue to manage its business risks successfully.

Based on the above and after making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

Summary of disclosure exemptions

The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102 paragraph 1.12:

(a) No cash flow statement for the company has been presented.
(b) Disclosures in respect of company financial instruments have not been presented.
(c) Disclosures in respect of company key management personnel compensation have not been presented.

The company has taken advantage of the exemption in section 408 of the Companies Act from presenting its individual profit and loss account.

Disclosure of long or short period

The financial statements relate to the ten month period from 1 December 2021 to 30 September 2022.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 September each year.

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Village Underground Holdings Limited, Village Underground Limited, HAC Group Limited, HAC Catering Limited, HAC Theatre Limited, and HAC Venue Limited have been included in the group profit and loss account and statement of cash flows for the period from their acquisitions on 3 December 2021. In each case, the respective purchase consideration has been allocated to the respective assets and liabilities on the basis of fair value at the date of acquisition.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

Judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Other than those involving estimations there are no judgements that management have made in the process of applying the entity's accounting policies that have a significant effect on the amounts recognised in the financial statements.

Key sources of estimation uncertainty

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

- Useful economic lives and impairment of goodwill:
Goodwill is amortised over its estimated economic life. The group exercises judgement to determine these useful lives. At each reporting date, the directors are required to assess whether there is any indication that goodwill may be impaired. If there is an indication that the value may be impaired, the group estimates the recoverable amount of the asset and the carrying value is impaired as appropriate.

The directors have performed an annual impairment review of goodwill values at 30 September 2022 by comparing the discounted estimated future cash flows of the cash-generating units with their carrying values including goodwill. The impairment review is dependent on a number of key assumptions which have a significant impact on the outcome, including:
(a) the cashflow forecasts utilised. These were extracted from the group's board-approved five-year budgets and inherently include a number of judgements and estimates, particularly in relation to predictions of the group's future event calendar, attendance of events, and average spend per head at these events.
(b) the discount rate which has been estimated based upon the weighted average cost of capital for comparable investments.

- Useful economic lives of tangible assets:
Tangible fixed assets are depreciated to their estimated residual values over their estimated useful lives. The group exercises judgement to determine these useful lives and residual values.

- Impairment of carrying values of investments:
Investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses. At each reporting date, the directors are required to assess whether there is any indication that investments may be impaired. If there is an indication that the value may be impaired, the company estimates the recoverable amount of the asset and the carrying value is impaired as appropriate.

The directors have performed an annual impairment review of investment values at 30 September 2022 as described above under goodwill, with the same key assumptions.

- Impairment of amounts owed by group undertakings:
The company makes an estimate of the recoverable value of amounts owed by group undertakings. Included within debtors are loans advanced to group companies to provide working capital. The directors consider the recoverability of these loans to be dependent on the long term success of the group and the associated profitability of these undertakings. These undertakings have prepared management accounts, forecasts, and other supporting information detailing the key performance indicators that are required in order for the companies to be profitable in the foreseeable future. The directors have reviewed the industry trends and sources of external funding for the subsidiary undertakings, and have assessed the appropriateness of this information to consider the future profitability of these companies and therefore recoverability of these amounts.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

- Non-redeemable shares with the right to non-discretionary dividends:
The company has issued non-redeemable shares with the right to non-discretionary dividends in perpetuity which have both equity and liability elements. The liability element is calculated as the present value of the future contractual cash flows, discounted at a market rate of interest for a similar liability that does not have the associated equity component. The directors exercise judgement to determine this market rate of interest.

Revenue recognition

Turnover comprises income receivable, excluding value added tax, returns, rebates and discounts where appropriate, from venue hire and the associated provision of food and drink services.

Revenue from ticket sales is recognised on the day of the event. Revenue from productions and venue hire are spread over the period of the event and revenue from catering services is recognised on the date of the transaction.

Government grants

Government grants are recognised when it is reasonable to expect that the grants will be received and that all related conditions will be met, usually on submission of a valid claim for payment.

Grants of a revenue nature are credited to income so as to match them with the expenditure to which they relate.

Tax

The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Intangible assets

Intangible assets are stated in the statement of financial position at cost, less any subsequent accumulated amortisation and subsequent accumulated impairment losses.

The cost of intangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

10 years

Premises licence

15% Straight Line

Website

15% Straight Line

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Leasehold improvements

Over the remaining life of the lease

Plant and machinery

15% Straight Line

Investments

Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, as estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase and other costs incurred in bringing the stock to its present location and condition.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation.

Lease payments are apportioned between finance costs in the Income Statement and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

Financial instruments

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 entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the statement of financial position. Finance costs and gains or losses relating to financial liabilities are included in the income statement. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

3

Turnover

The analysis of the group's turnover for the period from continuing operations is as follows:

2022
£

2021
£

Bar sales

1,541,335

-

Ticket sales

149,600

-

Venue hire

663,936

-

Production income

349,142

-

2,704,013

-

All turnover is derived in the UK.

4

Other operating income

The analysis of the group's other operating income for the period is as follows:

2022
£

2021
£

Government grants

606,519

-

Rental income

42,014

-

Miscellaneous other operating income

218,774

-

867,307

-

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

5

Operating (loss)/profit

Arrived at after charging/(crediting)

2022
£

2021
£

Depreciation expense

243,282

-

Amortisation expense

808,139

-

Impairment loss

1,559,080

-

Rent under operating leases

397,846

-

6

Interest payable and similar expenses

2022
£

2021
£

Interest on bank overdrafts and borrowings

61,377

-

Interest on obligations under finance leases

33,431

-

Interest expense on other finance liabilities

102,615

-

Finance costs

183,333

-

380,756

-

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2022
£

2021
£

Wages and salaries

883,407

-

Social security costs

59,224

-

Pension costs, defined contribution scheme

10,745

-

Other employee expense

79,425

-

1,032,801

-

The average number of persons employed by the group (including directors) during the period, analysed by category was as follows:

2022
No.

2021
No.

Administration and support

23

-

Front of house

50

-

73

-

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

8

Directors' remuneration

The directors' remuneration for the period was as follows:

2022
£

2021
£

Remuneration

75,334

-

Sums paid to third parties for directors' services

20,000

-

95,334

-

9

Auditor's remuneration

2022
£

2021
£

Audit of these financial statements

17,500

-

Other fees to auditors

Taxation compliance services

7,250

-

All other non-audit services

13,750

-

21,000

-


 

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

10

Taxation

Tax charged/(credited) in the consolidated income statement

2022
£

2021
£

Current taxation

UK corporation tax

15,178

-

The tax on profit before tax for the period is higher than the standard rate of corporation tax in the UK (2021 - the same as the standard rate of corporation tax in the UK) of 19% (2021 - 19%).

The differences are reconciled below:

2022
£

2021
£

Loss before tax

(2,734,694)

-

Corporation tax at standard rate

(519,592)

-

Effect of expense not deductible in determining taxable profit (tax loss)

521,658

-

Effect of tax losses

(23,388)

-

Tax increase from effect of capital allowances and depreciation

36,500

-

Total tax charge

15,178

-

The group has total tax losses carried forward of £2,184,193. No deferred tax asset has been provided on this due to the uncertainty over the timing of recovery.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

11

Intangible assets

Group

Goodwill
 £

Premises licence
 £

Website
 £

Total
£

Cost or valuation

Additions acquired separately

9,804,827

16,499

8,786

9,830,112

At 30 September 2022

9,804,827

16,499

8,786

9,830,112

Amortisation

Amortisation charge

804,198

1,558

2,383

808,139

Impairment

1,559,080

-

-

1,559,080

At 30 September 2022

2,363,278

1,558

2,383

2,367,219

Carrying amount

At 30 September 2022

7,441,549

14,941

6,403

7,462,893

The amount of impairment loss in respect of goodwill recognised in profit or loss in the group's consolidated income statement for the period was £1,559,080 (2021 - £Nil).

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

12

Tangible assets

Group

Leasehold improvements
£

Plant and machinery
£

Total
£

Cost or valuation

Additions

4,174,428

439,523

4,613,951

Disposals

(3,204)

-

(3,204)

At 30 September 2022

4,171,224

439,523

4,610,747

Depreciation

Charge for the period

134,900

108,382

243,282

At 30 September 2022

134,900

108,382

243,282

Carrying amount

At 30 September 2022

4,036,324

331,141

4,367,465

Assets held under finance leases

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases:

 

2022
£

2021
£

Leasehold improvements

115,707

-

Plant and machinery

223,167

-

 

338,874

-

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

13

Investments

Company

2022
£

2021
£

Investments in subsidiaries

7,756,931

-

Subsidiaries

£

Cost or valuation

Additions

9,355,642

At 30 September 2022

9,355,642

Provision

Provision

1,598,711

At 30 September 2022

1,598,711

Carrying amount

At 30 September 2022

7,756,931

The amount of impairment loss in respect of investments in subsidiaries recognised in profit or loss in the company's income statement for the period was £1,598,711 (2021 - £Nil).

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2022

2021

Subsidiary undertakings

Village Underground Holdings Ltd

54 Holywell Lane, London, EC2A 3PQ

Ordinary

100%

0%

Village Underground Limited*

54 Holywell Lane, London, EC2A 3PQ

Ordinary

100%

0%

HAC Group Limited

54 Holywell Lane, London, EC2A 3PQ

Ordinary

100%

0%

HAC Catering Ltd*

54 Holywell Lane, London, EC2A 3PQ

Ordinary

100%

0%

HAC Theatre Ltd*

54 Holywell Lane, London, EC2A 3PQ

Ordinary

100%

0%

HAC Venue Ltd*

54 Holywell Lane, London, EC2A 3PQ

Ordinary

100%

0%

*Indirect holdings

All companies are included for consolidation purposes.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

14

Business combinations

Village Underground Holdings Ltd

On 3 December 2021, VU X EartH Limited acquired 100% of the issued share capital of Village Underground Holdings Ltd, obtaining control. This was accounted for as an acquisition.

Village Underground Holdings Ltd contributed £1,484,258 revenue and a profit of £262,727 to the group's loss for the period between the date of acquisition and the Statement of Financial Position date.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:
 

Book value
2022
£

Fair value
2022
£

Assets and liabilities acquired

Financial assets

5,634,560

5,634,560

Stocks

3,004

3,004

Tangible assets

100,538

100,538

Financial liabilities

(4,269,409)

(4,269,409)

Total identifiable assets

1,468,693

1,468,693

Goodwill

3,686,381

3,686,381

Total consideration

5,155,074

5,155,074

Satisfied by:

Cash

55,569

55,569

Equity instruments

5,099,505

5,099,505

Total consideration transferred

5,155,074

5,155,074

Cash flow analysis:

Cash consideration

55,569

55,569

Less: cash and cash equivalent balances acquired

(537,369)

(537,369)

Net cash inflow arising on acquisition

(481,800)

(481,800)

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

HAC Group Limited

On 3 December 2021, VU X EartH Limited acquired 100% of the issued share capital of HAC Group Limited, obtaining control. This was accounted for as an acquisition.

HAC Group Limited contributed £1,219,756 revenue and a loss of £432,637 to the group's loss for the period between the date of acquisition and the Statement of Financial Position date.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:
 

Book value
2022
£

Fair value
2022
£

Assets and liabilities acquired

Financial assets

414,633

414,633

Stocks

22,663

22,663

Tangible assets

4,080,379

4,080,379

Financial liabilities

(6,435,553)

(6,435,553)

Total identifiable assets

(1,917,878)

(1,917,878)

Goodwill

6,118,446

6,118,446

Total consideration

4,200,568

4,200,568

Satisfied by:

Cash

50,569

50,569

Equity instruments

4,149,999

4,149,999

Total consideration transferred

4,200,568

4,200,568

Cash flow analysis:

Cash consideration

50,569

50,569

Less: cash and cash equivalent balances acquired

(151,243)

(151,243)

Net cash inflow arising on acquisition

(100,674)

(100,674)

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

15

Stocks

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Other inventories

79,096

-

-

-

16

Debtors

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Trade debtors

251,868

-

-

-

Amounts owed by group undertakings

-

-

1,606,640

-

Other debtors

37,803

-

17,457

-

Prepayments

111,144

-

-

-

400,815

-

1,624,097

-

17

Cash and cash equivalents

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Cash on hand

1,243

-

-

-

Cash at bank

516,358

1

-

1

517,601

1

-

1

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

18

Creditors

   

Group

Company

Note

2022
£

2021
£

2022
£

2021
£

Due within one year

 

Loans and borrowings

19

637,658

-

-

-

Trade creditors

 

376,837

-

-

-

Amounts due to group undertakings

 

-

-

5,250

-

Social security and other taxes

 

116,849

-

-

-

Other payables

 

163,349

-

-

-

Accruals

 

1,031,380

-

8,336

-

Corporation tax liability

 

15,440

-

-

-

 

2,341,513

-

13,586

-

Due after one year

 

Loans and borrowings

19

2,030,852

-

-

-

Debt element of Ordinary A shares

 

1,405,555

-

1,405,555

-

 

3,436,407

-

1,405,555

-

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

19

Loans and borrowings

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Non-current loans and borrowings

Bank loans

1,799,584

-

-

-

Finance lease liabilities

178,516

-

-

-

Other loans

52,752

-

-

-

2,030,852

-

-

-

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Current loans and borrowings

Bank loans

436,763

-

-

-

Finance lease liabilities

175,393

-

-

-

Other loans

25,502

-

-

-

637,658

-

-

-

Bank loans are secured by way of a fixed and floating charge over the assets and undertakings of the subsidiary undertakings.

Bank loans carry interest at margins of between 4% and 5.8% above the Bank of England base rate per annum and are repayable by monthly instalment.

Bank loans payable by instalment due after more than 5 years amount to £39,500 (2021 - £Nil).

Finance lease liabilities are secured on the assets concerned.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

20

Provisions for liabilities

Group

Deferred tax
£

Total
£

Increase (decrease) through business combinations

22,539

22,539

At 30 September 2022

22,539

22,539

21

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the group to the scheme and amounted to £10,745 (2021 - £Nil).

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

22

Share capital

Allotted, called up and fully paid shares

 

2022

2021

 

No.

£

No.

£

Ordinary shares of £1 each

-

-

1

1

A Ordinary preferred shares of £1 each

2,750,000

2,750,000

-

-

C Ordinary shares of £1 each

7,579,561

7,579,561

-

-

D Ordinary shares of £1 each

669,944

669,944

-

-

Less: debt element

(1,222,222)

(1,222,222)

-

-

 

9,777,283

9,777,283

1

1

New shares allotted

During the period 2,750,000 A Ordinary preferred shares of £1 each having an aggregate nominal value of £2,750,000 were allotted for an aggregate consideration of £2,750,000. These shares include the right to a mandatory cumulative dividend recorded as a finance cost within the income statement. The equity component of the shares of £1,527,778 is recorded within share capital while the liability component of £1,222,222 is included within creditors due after one year.

During the period 7,579,561 C Ordinary shares of £1 each having an aggregate nominal value of £7,579,561 were allotted for an aggregate consideration of £7,579,561.

During the period 669,944 D Ordinary shares of £1 each having an aggregate nominal value of £669,944 were allotted for an aggregate consideration of £669,944.

Rights, preferences and restrictions

The A Ordinary preferred shares of £1 each include a right to receive a cumulative dividend of £220,000 per annum.

No dividends may be declared on the C Ordinary shares of £1 each or the D ordinary shares of £1 each unless all accrued dividends on the A Ordinary preferred shares of £1 each have been paid. Dividends may be declared of up to one third of the remaining profits available for distribution.

Each class of ordinary share ranks pari passu for voting purposes.

23

Profit and loss account

During the period, the company accrued a preference dividend of £183,333 due to the A Ordinary preferred shareholders in accordance with a contractual obligation included within an investment agreement. The charge for the period is included as a finance cost within interest payable and similar charges. At 30 September 2022, the company does not have sufficient distributable reserves in accordance with Companies Act 2006 to declare and pay this dividend.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

24

Commitments and guarantees

The total of future minimum lease payments arising under operating leases not reflected in the statement of financial position is as follows:

2022
£

2021
£

Not later than one year

492,260

-

Later than one year and not later than five years

2,040,352

-

Later than five years

6,694,017

-

9,226,629

-

25

Related party transactions

In accordance with FRS 102 paragraph 33.1A, exemption is taken not to disclose transactions in the year between group undertakings where 100% of the voting rights are controlled within the group.

Compensation payable to key management personnel relates to directors' remuneration as disclosed in note 8. Also disclosed within this note, sums payable to third parties in respect of directors' services relate to consultancy fees paid to an entity which provides key management personnel services to VU X EartH Limited.

26

Control

The controlling entity is A T Foxcroft.

27

Non adjusting events after the financial period

Subsequent to 30 September 2022, the company allotted and issued a further 2,338,500 A Ordinary shares for an amount of £500,000, to provide additional working capital.

 

VU X EartH Limited

Notes to the Financial Statements for the Period from 1 December 2021 to 30 September 2022

28

Analysis of changes in net debt

Group

At 1 December 2021
£

Financing cash flows
£

Acquisition of subsidiaries
£

Other non-cash changes
£

At 30 September 2022
£

Cash and cash equivalents

Cash

(1)

171,012

(688,612)

-

(517,601)

Borrowings

Long term borrowings

-

-

2,247,723

(395,387)

1,852,336

Short term borrowings

-

(1,037,894)

1,104,772

395,387

462,265

Lease liabilities

-

(133,915)

487,824

-

353,909

-

(1,171,809)

3,840,319

-

2,668,510

 

(1)

(1,000,797)

3,151,707

-

2,150,909