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Registration number: 12000852

Freeda UK Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2023

Pages for Filing with Registrar

 

Freeda UK Limited

(Registration number: 12000852)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

7

84,051

188,561

Current assets

 

Debtors

8

1,307,028

813,248

Cash at bank and in hand

 

50

125,745

 

1,307,078

938,993

Creditors: Amounts falling due within one year

9

(1,247,791)

(867,539)

Net current assets

 

59,287

71,454

Total assets less current liabilities

 

143,338

260,015

Creditors: Amounts falling due after more than one year

9

(16,036)

(78,473)

Provisions for liabilities

12

(100,000)

(100,000)

Net assets

 

27,302

81,542

Capital and reserves

 

Called up share capital

11

100

100

Capital redemption reserve

13,819,994

11,250,447

Other reserves

14

54

-

Profit and loss account

(13,792,846)

(11,169,005)

Shareholders' funds

 

27,302

81,542

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.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. As permitted by section 444 (5A) of the Companies Act 2006, the directors have not delivered to the registrar a copy of the Profit and Loss Account.

Approved and authorised by the Board on 28 March 2024 and signed on its behalf by:
 

.........................................
J B Jouning
Director

 

Freeda UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

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:
Stylus Building
116 Old Street
London
EC1V 9BG

Principal activity

The principal activity of the Company is the ceation of digital content for publication via Freeda UK social media channels. This includes both editorial and sponsored content created in partnership with other companies and brands.

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 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 except that as disclosed in the accounting policies certain items are shown at fair value.

Going concern

The company is dependent on the support of its parent company to continue as a going concern. Confirmation of this support has been provided and the directors consider it appropriate to prepare the accounts on a going concern basis.

Should the support not continue, adjustments would have to be made to reduce the value of assets to their recoverable amount, to provide for any further liabilities that may arise and to reclassify fixed assets as current and long term liabilities as current liabilities.

 

Freeda UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Turnover recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the Company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The Company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the Company's activities.

Contract revenue recognition

Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer. Full provision is made for losses on all contracts in the year in which they are first foreseen.

Government grants

Grants relating to revenue are recognised in income on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate. A grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs shall be recognised in income in the period in which it becomes receivable.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Intangible assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Such cost includes costs directly attributable to making the asset capable of operating as intended. The carrying values of intangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

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

Software and licenses

3 years straight line

 

Freeda UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

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 property

5 years straight line

Fixtures and fittings

5 years straight line

IT servers

5 years straight line

Computer and production equipment

3 years straight line

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Debtors

Basic financial assets, including trade and other debtors, are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment,

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

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.

 

Freeda UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Creditors

Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related parties, 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. Such instruments are subsequently carried at amortised cost using the effective interest method, less any impairment.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the Company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

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 profit and loss account 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 Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

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.

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.

 

Freeda UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

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

The Group operates an equity-settled, share-based compensation plan, under which the Company receives services from employees as consideration for equity instruments (options) of the parent company. The fair value of the employee services received is measured by reference to the estimated fair value of the options at the grant date and is recognised as an expense over the vesting period. The estimated fair value of the option granted is calculated using the Black Scholes option pricing model. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

3

Significant judgements and estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. In the Director's opinion the dilapidation provision is the only significant judgement and key source of estimation uncertainty. The carrying value of the dilapidation provision at 31 December 2023 is £100,000 (2022: £100,000).

4

Audit report

The Independent Auditor's Report was unqualified. The name of the Senior Statutory Auditor who signed the audit report on 28 March 2024 was David Wheeler, who signed for and on behalf of Bourner Bullock.

5

Staff numbers

The average number of persons employed by the Company (including directors) during the year, was 25 (2022 - 31).

 

Freeda UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

6

Intangible assets

Software and licenses
£

Total
£

Cost or valuation

At 1 January 2023

3,845

3,845

At 31 December 2023

3,845

3,845

Amortisation

At 1 January 2023

3,845

3,845

At 31 December 2023

3,845

3,845

Carrying amount

At 31 December 2023

-

-

7

Tangible assets

Leasehold property
£

Furniture, fittings and equipment
 £

Total
£

Cost or valuation

At 1 January 2023

439,806

145,142

584,948

Additions

-

3,869

3,869

At 31 December 2023

439,806

149,011

588,817

Depreciation

At 1 January 2023

284,619

111,768

396,387

Charge for the year

89,962

18,417

108,379

At 31 December 2023

374,581

130,185

504,766

Carrying amount

At 31 December 2023

65,225

18,826

84,051

At 31 December 2022

155,187

33,374

188,561

 

Freeda UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

8

Debtors

2023
£

2022
£

Trade debtors

436,871

167,974

Amounts owed by group undertakings

437,382

191,049

Prepayments

163,006

151,857

Other debtors

269,769

302,368

 

1,307,028

813,248

Less non-current portion

(269,411)

(269,411)

1,037,617

543,837

Details of non-current trade and other debtors

£269,411 (2022 -£269,411) of Rent deposit on leasehold property is classified as non current.

9

Creditors

Creditors: amounts falling due within one year

Note

2023
£

2022
£

Bank overdrafts and other borrowings

10

599,736

451,552

Trade creditors

 

248,519

198,138

Taxation and social security

 

61,505

81,424

Other creditors

 

338,031

136,425

 

1,247,791

867,539

Creditors: amounts falling due after more than one year

2023
£

2022
£

Rent free period accrual

16,036

78,473

 

Freeda UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

10

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

Bank overdrafts

462,865

451,552

Invoice discounting

136,871

-

599,736

451,552

11

Share capital and share premium

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

100

100

100

100

         

Capital Redemption Reserve

During the year, the parent undertaking, AG Digital Media SpA, converted loans made to the Company to equity, reducing the amount due to the parent company by Freeda UK Limited. The total loan value converted during the year was £2,569,547 (2022: £2,637,496).

12

Provisions

Included in provisions is a dilapidation provision in relation to the lease of the Company offices at Stylus Building, 116 Old Street, London, EC1V 9BG. It represents the Company's liability for returning the premises to the condition required by the lease agreement. The provision is expected to be fully released by 2025.

2023
£

2022
£

Dilapidation provision

100,000

100,000


 

13

Dividends

There were no dividends paid or proposed in either the current year or the previous year.

 

Freeda UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

14

Share-based payments

AG Digital Media SpA, the parent company of Freeda UK Limited, operates an Equity Incentive Plan for employees of the group.

Fair value of the options is measured at the grant date utilising the Black Scholes model. The options vest over a 4 year period conditional upon continued employment and have an expiry date of 31 December 2030.

15

Operating leases

The total of future minimum lease payments is as follows:

2023
 £

2022
 £

Not later than one year

449,018

449,018

Later than one year and not later than five years

224,508

673,526

673,526

1,122,544