Company Registration No. 13016849 (England and Wales)
13 Lives UK Productions Limited
Annual report and financial statements
for the year ended 20 April 2023
13 Lives UK Productions Limited
Contents
Page
Company Information
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Statement of Comprehensive Income
8
Balance Sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 16
13 Lives UK Productions Limited
Company information
1
Directors
David Clapham
(Appointed 15 February 2024)
Lesley Freeman
Secretary
Lesley Freeman
Company number
13016849
Registered office
71 Queen Victoria Street
London
EC4V 4BE
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
13 Lives UK Productions Limited
Directors' report
For the year ended 20 April 2023
2
The directors of 13 Lives UK Productions Limited ("the Company") present the annual report containing their Directors' Report and the financial statements for the for the year ended 20 April 2023. In accordance with section 414B of the Companies Act 2006, the directors have taken advantage of the small companies exemption from preparing a Strategic Report.
Principal Activity
The principal activity of the Company continued to be that of television production. During the year, the directors of the Company announced their decision to cease operations and close the Company.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
David Clapham
(Appointed 15 February 2024)
Lesley Freeman
No director held any interest in the share capital of the Company during the year.
Dividend
The directors do not recommend payment of any dividend (2022: £nil).
Qualifying third party indemnity provisions
Qualifying third party indemnity provisions are in place to indemnify the director and officers of the Company.
Auditor
Saffery LLP were appointed as auditor to the Company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Disclosure of information to the auditor
The directors who held office at the date of approval of this annual report confirm that so far as they are aware, there is no relevant audit information of which the Company's auditor is unaware, and the directors have taken steps that ought to have been taken as directors to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Basis other than going concern
The directors have confirmed that the Company is expected to cease trading as the productions are now complete. The accounts have therefore been prepared on a basis other than going concern. Current assets have been stated at recoverable amounts.
On behalf of the board
Lesley Freeman
Director
8 April 2024
13 Lives UK Productions Limited
Directors' responsibilities statement
For the year ended 20 April 2023
3
The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial period. Under that law the directors have elected to prepare the financial statements in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' 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 Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies in accordance with Section 10 of FRS 102 and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in FRS 102 is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company’s financial position and financial performance;
in respect of the financial statements, state whether FRS 102 has 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 appropriate to presume that the Company will not continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a director's report that complies with that law and those regulations. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.
13 Lives UK Productions Limited
Independent auditor's report
To the member of 13 Lives UK Productions Limited
4
Opinion
We have audited the financial statements of 13 Lives UK Productions Limited (the 'company') for the year ended 20 April 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including 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 the financial statements:
give a true and fair view of the state of the company's affairs as at 20 April 2023 and of its profit for the year 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.
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's responsibilities for the audit of the financial statements section of our report. We are independent of the company 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 opinion.
Conclusions relating to going concern
We draw attention to Note 1.2 to the financial statements, which explains that the directors intend to liquidate the company and therefore do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly, the financial statements have been prepared on a basis as described in Note 1.2. Our opinion is not modified in respect of this matter.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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.
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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
13 Lives UK Productions Limited
Independent auditor's report (continued)
To the member of 13 Lives UK Productions Limited
5
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
13 Lives UK Productions Limited
Independent auditor's report (continued)
To the member of 13 Lives UK Productions Limited
6
Auditor's 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company's financial statement to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner's review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than forgery or intention misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
13 Lives UK Productions Limited
Independent auditor's report (continued)
To the member of 13 Lives UK Productions Limited
7
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Nigel Walde (Senior Statutory Auditor)
for and on behalf of Saffery LLP
10 April 2024
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
13 Lives UK Productions Limited
Statement of comprehensive income
For the year ended 20 April 2023
8
Year
Period
ended
ended
20 April
20 April
2023
2022
Notes
£
£
Net Turnover
3
(9,976,443)
11,383,567
Net Cost of Sales
9,992,598
(11,816,015)
Operating profit/(loss)
4
16,155
(432,448)
Administrative expenses
(16,155)
(25,586)
Loss before taxation
(458,034)
Tax on loss
6
460,220
Profit and Total Comprehensive Income for the Year
2,186
13 Lives UK Productions Limited
Balance sheet
As at 20 April 2023
9
2023
2022
Notes
£
£
£
£
Current assets
Debtors
7
17,437,724
9,762,234
Cash at bank and in hand
381,936
249,065
17,819,660
10,011,299
Creditors: amounts falling due within one year
8
(17,784,659)
(9,976,298)
Net current assets
35,001
35,001
Capital and reserves
Called up share capital
9
1
1
Profit and loss reserves
35,000
35,000
Total equity
35,001
35,001
The financial statements were approved by the board of directors and authorised for issue on 8 April 2024 and are signed on its behalf by:
Lesley Freeman
Director
Company Registration No. 13016849
13 Lives UK Productions Limited
Statement of changes in equity
For the year ended 20 April 2023
10
Share capital
Retained earnings
Total
£
£
£
Balance at 1 January 2022
1
32,814
32,815
Period ended 20 April 2022:
Profit and total comprehensive income for the period
-
2,186
2,186
Balance at 20 April 2022
1
35,000
35,001
Year ended 20 April 2023:
Profit and total comprehensive income for the year
-
Balance at 20 April 2023
1
35,000
35,001
13 Lives UK Productions Limited
Notes to the financial statements
For the year ended 20 April 2023
11
1
Accounting policies
Company information
13 Lives UK Productions Limited is a private company limited by shares incorporated in England and Wales. The registered office is 71 Queen Victoria Street, London, EC4V 4BE.
The Company’s financial statements have been prepared in compliance with Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (“FRS 102”), and with the Companies Act 2006.
1.1
Basis of preparation
These financial statements have been prepared in accordance with applicable accounting standards.
The functional currency of the Company's operations in the United Kingdom is pound sterling, The financial statements are presented in pound sterling and are rounded to nearest pound sterling (£).
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The Company has taken advantage of the following disclosure exemptions in FRS 102:
The requirements of Section 7 Statement of Cash Flows and Section 3 Financial Statement Presentation paragraph 3.17(d);
The requirements of Section 33 Related Party Disclosures paragraph 33.1A and 33.7;
The requirements of Section 11 Basic Financial Instruments paragraph 11.39 to 11.48A
The exemptions stated above are available to the Company as it is a member of a group where the parent of that group prepares publicly available consolidated financial statements.
1.2
Pronouncements recently adopted
In July 2023, the Financial Reporting Council issued amendments to Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" International tax reform - Pillar two model rules (the "Amendments"). The Amendments provide a mandatory temporary exception to accounting for deferred taxes arising from the implementation of the Pillar Two model rules; and disclosure requirements for affected entities to help users of the financial statements better understand an entity's exposure to Pillar Two income taxes arising from that legislation. The Directors adopted the Amendments on 1 January 2023 with no material impact to the financial statements.
On 11 July 2023, the UK enacted new global minimum tax rules to align with the Organization for Economic Co-operation and Development Base Erosion and Profit Shifting (“BEPS”) Pillar Two model rules. The enacted law includes the implementation of the multinational top-up tax (“MTUT”) and domestic minimum top-up tax (“DTT”). The MTUT and DTT are effective for fiscal years beginning on or after 31 December 2023. The Company has applied the mandatory exception provided under Section 29 – Income Taxes to neither recognize nor disclose information on deferred tax assets and liabilities related to Pillar Two income taxes. The Directors are in the process of assessing the impacts of the global minimum tax rules enacted by the UK on the Company and its application to our ultimate parent entity. While the UK has enacted the MTUT and DTT as part of the Finance (No.2) Act 2023 legislation, additional guidance must be provided to enable affected parties to reasonably estimate top-up taxes. As of the year ended 31 December 2023, the Directors are still evaluating the impact of the global minimum tax rules enacted by the UK Government.
13 Lives UK Productions Limited
Notes to the financial statements (continued)
For the year ended 20 April 2023
1
Accounting policies (continued)
12
1.3
Basis other than going concern
The directors has confirmed that the Company is expected to cease trading as the production is now complete. The accounts have therefore been prepared on a basis other than going concern. Current assets have been stated at recoverable amounts.true
The principal accounting policies applied in the preparation of the financial statements are set out below.
1.4
Net Turnover
Turnover represents income from the company's principal trading activities and is stated exclusive of VAT.
In respect of long-term contracts for on-going services, turnover represents the value of work done in the period, including estimates of amounts not invoiced. Value of work done in respect of long-term contracts and contracts for on-going services is determined by reference to the stage of completion.
The "percentage of completion method" is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the period in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented in stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recoverable.
1.5
Cash and cash equivalents
All highly liquid instruments with an original maturity of three months or less are classified as cash equivalents.
13 Lives UK Productions Limited
Notes to the financial statements (continued)
For the year ended 20 April 2023
1
Accounting policies (continued)
13
1.6
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.7
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions where practicable, else at the average rate over the period in which the transactions were incurred. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date.
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Net Turnover
2023
2022
£
£
Turnover analysed by class of business
Sale of film rights
(9,976,443)
11,381,381
Production services fee
-
2,186
(9,976,443)
11,383,567
2023
2022
£
£
Turnover analysed by geographical market
United States
(9,976,443)
11,383,567
During the year ended 20 April 2023, the Company submitted requests for a number of film production related incentives. The incentives were received post year-end and have been recognised as a reduction to Cost of Sales and a corresponding reduction in Turnover.
13 Lives UK Productions Limited
Notes to the financial statements (continued)
For the year ended 20 April 2023
14
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging:
£
£
Exchange (gains)/losses
7,086
Fees payable to the company's auditor for the audit of the company's financial statements
13,655
14,500
Fees payable to the company's auditor for the non audit services
2,500
4,000
5
Staff costs
The average monthly number of persons (excluding directors) employed by the company during the year was:
2023
2022
Number
Number
Production staff
4
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
65,135
Social security costs
-
8,050
Pension costs
663
73,848
6
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(460,220)
13 Lives UK Productions Limited
Notes to the financial statements (continued)
For the year ended 20 April 2023
6
Taxation (continued)
15
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit/(loss) before taxation
(458,034)
Tax computed at UK statutory rate
(87,026)
Enhanced losses arising from the film tax credit
(275,016)
Difference between the rate of corporation tax and the rate of relief under the film tax credit
(110,453)
Losses carried forward
12,275
Taxation charge/(credit) for the year
-
(460,220)
The UK corporation tax rate for the year ended 20 April 2023 is 19% (2022: 19%). The Finance Act 2021, which received Royal Assent on 10 June 2021, enacted a 6% increase in the corporation tax rate from its current rate of 19% to 25% for the year beginning 1 April 2023. Any deferred tax assets and liabilities existing at 20 April 2023 are reflected according to the applicable corporation tax rate expected to apply at the time of realisation. No deferred tax asset or liability has been recognised as at 20 April 2023.
7
Debtors
2023
2022
Amounts falling due within one year:
£
£
Corporation tax recoverable
460,220
2,388,328
Amounts owed by fellow group subsidiaries
16,977,504
7,213,796
Other debtors
160,110
17,437,724
9,762,234
8
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
27,000
Amounts owed to fellow group subsidiaries
17,765,151
6,656,376
Accruals and deferred income
19,508
3,292,922
17,784,659
9,976,298
13 Lives UK Productions Limited
Notes to the financial statements (continued)
For the year ended 20 April 2023
16
9
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Allotted, called up and fully paid
Ordinary shares of £1 each
1
1
1
1
10
Ultimate controlling party
The Company's immediate parent undertaking is Metro-Goldwyn-Mayer Studios Inc., a company incorporated in the United States of America. The address of this company is 245 N Beverly Drive, Beverly Hills, CA 90210-5317, USA.
The smallest and largest group in which the results of the Company are consolidated is that headed by its ultimate parent undertaking Amazon.com, Inc., a company incorporated in the United States of America. Copies of group financial statements of Amazon.com, Inc. can be obtained from 410 Terry Avenue N, Seattle, WA 98109-5210, USA.
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