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Registration number: 04467199

The Empire Film Company Limited

Unaudited Financial Statements

for the Year Ended 31 December 2022

Brebners
Chartered Accountants
130 Shaftesbury Avenue
London
W1D 5AR

 

The Empire Film Company Limited

Contents

Company Information

1

Statement of Financial Position

2 to 3

Notes to the Unaudited Financial Statements

4 to 10

 

The Empire Film Company Limited

Company Information

Directors

N R Wood

S C Burdge

Registered office

130 Shaftesbury Avenue
2nd Floor
London
W1D 5EU

Accountants

Brebners
Chartered Accountants
130 Shaftesbury Avenue
London
W1D 5AR

 

The Empire Film Company Limited

Statement of Financial Position as at 31 December 2022

Note

2022
£

2021
£

Fixed assets

 

Tangible assets

4

497,328

327,119

Current assets

 

Debtors

5

3,985,727

3,475,996

Cash at bank and in hand

 

129,529

618,761

 

4,115,256

4,094,757

Creditors: Amounts falling due within one year

6

(1,115,841)

(987,464)

Net current assets

 

2,999,415

3,107,293

Total assets less current liabilities

 

3,496,743

3,434,412

Creditors: Amounts falling due after more than one year

6

(125,508)

(86,899)

Provisions

8

(340,000)

(210,435)

Deferred tax liabilities

 

(19,251)

-

Provisions for liabilities

8

(359,251)

(210,435)

Net assets

 

3,011,984

3,137,078

Capital and reserves

 

Called up share capital

51

51

Capital redemption reserve

49

49

Profit and loss account

3,011,884

3,136,978

Total equity

 

3,011,984

3,137,078

For the financial year ending 31 December 2022 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006 and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Statement of Income and Retained Earnings has been taken.

 

The Empire Film Company Limited

Statement of Financial Position as at 31 December 2022

Approved and authorised by the Board on 6 March 2024 and signed on its behalf by:
 

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

N R Wood

Director

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

S C Burdge

Director

Company registration number: 04467199

 

The Empire Film Company Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 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:
130 Shaftesbury Avenue
2nd Floor
London
W1D 5EU

The principal activity of the company continued to be that of the production of film trailers.

2

Accounting policies

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention and are presented in sterling, which is the functional currency of the entity.

Summary of significant accounting policies

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.

Going concern

The company has net assets at the year end date of £3,011,984, including cash at bank of £129,529. During the year the company remained profitable.

The directors are confident that the company will trade profitably in the year ended 31 December 2024. They have identified and implemented significant cost savings within rent and other administrative expenses and have taken steps to ensure cash flows are managed in various scenarios. The company operates in a sector where, although overall activity has reduced, its services remain in demand and the directors are optimistic that this demand will increase as the film industry recovers. The directors therefore believe that the company has sufficient resources to continue its operations for the foreseeable future.

The company's working capital requirements are currently met via a combination of trade creditors, bank facilities, hire purchase, and funds from related undertakings. The directors have no reason to believe that any of these facilities will be discontinued. As a consequence, the directors believe that the company is well placed to continue to manage its business risks successfully.

On the basis of the above, and after making enquires and taking into account the combination of those circumstances outlined above, the directors have a reasonable expectation that the company 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.

 

The Empire Film Company Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

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:

- Impairment of other debtors:
Included within other debtors are loans totalling £2,642,589 advanced to companies in which the directors and shareholders of The Empire Film Company Limited hold participating interests. The company makes an estimate of the recoverable value of these amounts. These companies operate in the creative film design agency industry. These debts provide working capital to fund the operations of those companies. The directors of The Empire Film Company Limited consider the recoverability of the these debts to be dependent on the long term success of these businesses and the associated profitability of their undertakings. These undertakings have provided management accounts, forecasts, and other supporting information to The Empire Film Company Limited including key performance indicators.

The directors have reviewed the industry trends and sources of external funding for the companies, and assessed the appropriateness of this information to consider the recoverability of these amounts. The directors and management team have considerable expertise and experience in the industry as a result of historic success and profitability, and are therefore considered capable of reliably assessing the appropriateness of these forecasts and their underlying assumptions.

Revenue recognition

Turnover is the amounts receivable for services provided and is stated net of VAT.

Revenues from design services are normally recognised when design services are complete and the company has a right to consideration. Occasionally design services are sold on a fixed price basis, and under these circumstances revenue is recognised according to the percentage of work performed.

If circumstances arise that may change the original estimates of revenues or extent of progress towards completion, estimates are revised. These revisions may result in increases or decreases in estimated revenues and are reflected in income in the period in which the circumstances that gave rise to the revision become known by management.

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.

 

The Empire Film Company Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

Tax

The tax expense for the period comprises current and deferred 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 company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

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 term of the lease

Editing Equipment

20% straight line

Fixtures & Fittings

25% straight line

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.

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.

 

The Empire Film Company Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

Hire purchase agreements

Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at cost. The asset is then depreciated over its useful life. Future payments are apportioned between finance costs in the income statement and reduction of the liability so as to achieve a constant periodic rate of interest on the remaining balance of the liability using the effective interest method.

Provisions

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Operating leases and finance 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.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company 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.

Share based payments

Equity-settled arrangements are measured at fair value at the date of the grant. The fair value is expensed on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares or options that will vest.

 

The Empire Film Company Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

3

Staff numbers

The average number of persons employed by the company during the year, was 46 (2021 - 40).

4

Tangible assets

Leasehold Improvements
£

Editing Equipment
 £

Fixtures & Fittings
 £

Total
£

Cost or valuation

At 1 January 2022

67,654

956,683

272,152

1,296,489

Additions

182,164

197,582

-

379,746

Disposals

(67,654)

(226,567)

(227,393)

(521,614)

At 31 December 2022

182,164

927,698

44,759

1,154,621

Depreciation

At 1 January 2022

48,905

709,368

211,097

969,370

Charge for the year

3,120

135,826

33,127

172,073

Eliminated on disposal

(52,025)

(226,567)

(205,558)

(484,150)

At 31 December 2022

-

618,627

38,666

657,293

Carrying amount

At 31 December 2022

182,164

309,071

6,093

497,328

At 31 December 2021

18,749

247,315

61,055

327,119

5

Debtors

2022
£

2021
£

Trade debtors

979,908

1,193,745

Other debtors

3,005,819

2,282,251

3,985,727

3,475,996

Included in other debtors are amounts of £2,642,589 (2021: £1,545,968) due from companies in which the directors and shareholders of The Empire Film Company Limited hold participating interests.

 

The Empire Film Company Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

6

Creditors

Creditors: amounts falling due within one year

Note

2022
£

2021
£

Due within one year

 

Loans and borrowings

7

86,339

66,237

Trade creditors

 

539,787

205,852

Taxation and social security

 

393,836

574,551

Other creditors

 

95,879

140,824

 

1,115,841

987,464

Creditors: amounts falling due after more than one year

Note

2022
£

2021
£

Due after one year

 

Loans and borrowings

7

125,508

86,899

7

Loans and borrowings

2022
£

2021
£

Current loans and borrowings

Hire purchase agreements

86,339

66,237

2022
£

2021
£

Non-current loans and borrowings

Hire purchase agreements

125,508

86,899

Liabilities under hire purchase agreements are secured on the assets concerned.

8

Deferred tax and other provisions

Deferred tax
£

Dilapidation provisions
£

Total
£

At 1 January 2022

-

210,435

210,435

Additional provisions

19,251

-

19,251

Decrease in existing provisions

-

129,565

129,565

At 31 December 2022

19,251

340,000

359,251

 

The Empire Film Company Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

9

Financial commitments, guarantees and contingencies

The total amount of financial commitments not included in the statement of financial position is £6,933,474 (2021 - £7,263,485), comprising £2,007,710 (2021: £1,983,212) of lease commitments, £4,517,244 (2021: £4,910,081) of bank cross guarantees, and £408,520 (2021: £370,192) of VAT cross guarantees.

10

Related party transactions

Included within debtors is a balance of £11,906 (2021: £206,006) due from directors. During the year advances of £12,900 and repayments of £207,000 were made. Interest of £3,249 (2021: £8,284) has been charged at 2%. There are no set terms in place.

11

Non adjusting events after the financial period

Also subsequent to the year end, interim dividends totalling £92,000 were declared and paid.

Additionally, subsequent to the year end, the company allotted and issued 112 Ordinary B shares for an amount of £5,068.