Company Registration No. 03958635 (England and Wales)
IMMOTION STUDIOS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
IMMOTION STUDIOS LIMITED
COMPANY INFORMATION
Directors
Mr R D Findley
(Appointed 28 February 2023)
Mr J J Collis
(Appointed 28 February 2023)
Company number
03958635
Registered office
Kingswood House
South Road
Kingswood
Bristol
BS15 8JF
Auditor
Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG
IMMOTION STUDIOS LIMITED
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 5
Statement of comprehensive income
6
Statement of financial position
7
Statement of changes in equity
8
Notes to the financial statements
9 - 26
IMMOTION STUDIOS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
The principal activity of the company continued to be that of creator of virtual reality and other immersive content for use within the Immotion group and for licensing to third parties.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr M J Higginson
(Resigned 28 February 2023)
Mr D Marks
(Resigned 28 February 2023)
Mr D F G Wortley
(Resigned 28 February 2023)
Mr R D Findley
(Appointed 28 February 2023)
Mr J J Collis
(Appointed 28 February 2023)
Auditor
The auditors, Haysmacintyre LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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. 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.
IMMOTION STUDIOS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Small companies note
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
On behalf of the board
Mr R D Findley
Director
21 December 2023
IMMOTION STUDIOS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF IMMOTION STUDIOS LIMITED
- 3 -
Opinion
We have audited the financial statements of Immotion Studios Limited (the ‘Company’) for the year ended 31 December 2022 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity 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 101 ‘Reduced Disclosure Framework’ (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 31 December 2022 and of its loss 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
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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. We have nothing to report in this regard.
IMMOTION STUDIOS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IMMOTION STUDIOS LIMITED
- 4 -
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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
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 directors' report.
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:
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; or
the Directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Directors' Report and from the requirement to prepare a Strategic Report.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 1, 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'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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
IMMOTION STUDIOS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IMMOTION STUDIOS LIMITED
- 5 -
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Based on our understanding of the company and industry, we have identified the principal risks of noncompliance with laws and regulations, and we have considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:
Inspecting correspondence with regulators and tax authorities;
Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
Evaluating management’s controls designed to prevent and detect irregularities;
Identifying and testing journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions; and
Challenging assumptions and judgements made by management in their critical accounting estimates.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
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.
Christopher Cork (Senior Statutory Auditor)
For and on behalf of Haysmacintyre LLP
Chartered Accountants
Statutory Auditor
10 Queen Street Place
London
EC4R 1AG
22 December 2023
IMMOTION STUDIOS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
2022
2021
Notes
£
£
Turnover
3
685,071
1,128,870
Cost of sales
(33,367)
(39,269)
Gross profit
651,704
1,089,601
Administrative expenses
(1,266,320)
(1,126,163)
Other operating income
4
32,976
66,840
Operating (loss)/profit
5
(581,640)
30,278
Interest receivable and similar income
9
569
659
Interest payable and similar expenses
10
(1,930)
(8,136)
(Loss)/profit before taxation
(583,001)
22,801
Tax on (loss)/profit
11
(36,517)
36,210
(Loss)/profit and total comprehensive income for the financial year
(619,518)
59,011
The statement of comprehensive income has been prepared on the basis that all operations are continuing.
There was no other comprehensive income for 2022 (2021: £NIL).
The note on pages 9 to 27 form part of these financial statements.
IMMOTION STUDIOS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 7 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
12
150,781
714,248
Tangible fixed assets
13
7,309
95,816
Investments
14
1
1
158,091
810,065
Current assets
Receivables
16
1,326,425
1,355,771
Cash at bank and in hand
17
677
3,533
1,327,102
1,359,304
Payables: amounts falling due within one year
18
(5,405,689)
(5,470,347)
Net current liabilities
(4,078,587)
(4,111,043)
Total assets less current liabilities
(3,920,496)
(3,300,978)
Capital and reserves
Called up share capital
24
3,640
3,640
Share premium account
23
695,629
695,629
Profit and loss reserves
25
(4,619,765)
(4,000,247)
Total equity
(3,920,496)
(3,300,978)
The financial statements were approved by the board of directors and authorised for issue on 21 December 2023 and are signed on its behalf by:
Mr R D Findley
Director
Company Registration No. 03958635
The notes on pages 9 to 27 form part of these financial statements.
IMMOTION STUDIOS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2021
3,640
695,629
(4,076,275)
(3,377,006)
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
59,011
59,011
Credit to equity for equity settled share-based payments
-
-
17,017
17,017
Balance at 31 December 2021
3,640
695,629
(4,000,247)
(3,300,978)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(619,518)
(619,518)
Balance at 31 December 2022
3,640
695,629
(4,619,765)
(3,920,496)
The notes on pages 9 to 27 form part of these financial statements.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
1
Accounting policies
Company information
Immotion Studios Limited is a private company limited by shares incorporated in England and Wales. The registered office is Kingswood House, South Road, Kingswood, Bristol, BS15 8JF. The company's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment and intangible assets;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
for financial instruments measured at fair value and within the scope of IFRS 13, the valuation techniques and inputs used to measure fair value, the effect of fair value measurements with significant unobservable inputs on the result for the period and the impact of credit risk on the fair value; and
related party disclosures for transactions with the parent or wholly owned members of the group.
1.2
Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the company has adequate resources and support from its parent company to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.true
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 10 -
1.3
Turnover
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the performance obligations of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.
Content licensing revenue is recognised on the date which the related sale of that content by the licensee takes place. Minimum royalty obligations in content licensing agreements are recognised immediately as revenue providing the initial provision of the licensed content satisfies all performance obligations under the terms of the agreement.
The company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence the company does not adjust any of the transaction prices for the time value of money.
1.4
Intangible assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Development expenditure is stated at historic cost less accumulated amortisation. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when the following criteria is fulfilled:
it is technically feasible to complete the intangible asset so that it will be available for use;
management intends to complete the intangible asset and use or sell it;
there is an ability to use or sell the intangible asset;
it can be demonstrated how the intangible asset will generate probable future economic benefits;
adequate technical, financial, and other resources to complete the development and to use or sell the intangible asset are available; and
the expenditure attributable to the intangible asset during its development can be reliably measured.
Other development expenditure that does not meet the criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development expenditure is recorded as an intangible asset and amortised from the point at which the asset is ready for use on a straight line basis over its useful life, not exceeding three years.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 11 -
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
over the life of the lease
Plant and fixtures
33% straight line
Computer equipment
33% straight line
Right of use asset
over the shorter of the lease term and the useful economic life of the lease
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
1.6
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Borrowing costs related to fixed assets
All borrowing costs are recognised in the Statement of Comprehensive Income in the year in which they are incurred.
1.8
Impairment of tangible and intangible assets
At each reporting end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
1.9
Cash at bank and in hand
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.10
Financial assets
Financial assets are recognised in the company's Statement of Financial Position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
The company recognises lifetime expected credit losses for trade receivables and amounts due on contracts with customers. Expected credit losses are estimated based on historical credit loss, adjusted for facts that are specific to the counterparties, general economic conditions and an assessment of both the current as well as the forecasted conditions at the reporting date, including the time value of money where appropriate. Lifetime expected credit losses are losses which will result from all possible default events over the expected life of a financial instrument.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.11
Financial liabilities
Financial liabilities are classified as either financial liabilities or other financial liabilities.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.13
Share based payments
The fair value of share options issued to company employees at the date of grant is charged to the statement of comprehensive income on a straight-line basis over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of options expected to vest at each statement of financial position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
Where share options are cancelled due to employees leaving the Group’s employment before they have vested, cumulative share based payment expenses recognised in respect of those employees are reversed through the statement of comprehensive income.
Where share options are replaced the fair value of the replaced options at the date of grant continues to be recognised through the statement of comprehensive income in addition to a charge equating to the incremental value of the new options granted.
Fair value is calculated either using the Monte-Carlo model or Black-Scholes model.
1.14
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial position liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.15
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.17
Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within tangible fixed assets, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other tangible fixed assets. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
1.18
Grants
The company recognises government grants when it has reasonable assurance that it will comply with the relevant conditions and the grant will be received.
Grants related to income are recognised in the profit and loss account in line with the recognition of the expenses that the grants are intended to compensate. Such grants are presented as income and are not deducted from the related expenditure.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.19
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. 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. Gains and losses arising on translation in the period are included in profit or loss.
1.20
Rent Income
The company sublet its offices in the year and the agreement reached contained financial incentives. The rental income receivable by the company, net of incentives, is spread over the term of the sub-lease on a straight line basis.
1.21
Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.
1.22
Short term receivables are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
1.23
Payables are obligations to pay for goods or services that have been acquired in the ordinary course of business, from suppliers.
Payables are recognised initially at fair value and subsequently at amortised cost using the effective interest method.
2
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on management's best knowledge of the amount, events or actions, actual results ultimately may differ from those estimates. Management consider the following areas to be subject to estimation and judgement.
Recognition criteria for capitalisation of development expenditure
The company recognises costs incurred on development projects as an intangible asset which satisfies the requirements of IAS 38. The calculation of the costs incurred includes the percentage of time spent by certain employees on the development project. The decision whether to capitalise and how to determine the period of economic benefit of a development project requires an assessment of the commercial viability of the project and the prospect of selling the project to new or existing customers.
Amortisation of intangible assets
The periods of amortisation adopted to write down capitalised intangibles and capitalised staff costs requires judgements to be made in respect of estimating the useful economic lives of the intangible assets to determine an appropriate amortisation rate.
Capitalised development costs are amortised straight line over the period during which economic benefits are expected to be received, which typically for technology is 3 years.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
2
Critical accounting estimates and judgements
(Continued)
- 16 -
Depreciation
The useful economic lives of tangible fixed assets are based on management's judgement and experience. When management identifies that actual useful economic lives differ materially from the estimates used to calculate depreciation, that charge is adjusted retrospectively. Due to the significance of tangible fixed assets to the company, variances between actual and estimated useful economic lives could impact in the operating results both positively and negatively, although historically few changes to estimated useful economic lives have been required.
Management charges
Management charges incurred are charged to the company by the parent in relation to the benefits the company has received due to the group becoming listed on AIM. Costs attributable to consultancy services provided to the subsidiaries are also included within the management charge on a proportional basis of total subsidiary external revenues.
Content Licensing charges imposed are based on the benefit that the other trading companies in the group obtain from the use of the content that Immotion Studios Limited produces.
IFRS 16 discount rates
The group estimates an appropriate discount rate based on an incremental rate of borrowing for the calculation of the IFRS 16 right-of-use assets. This requires judgement as to an appropriate discount rate.
3
Turnover
2022
2021
£
£
Turnover analysed by class of business
Content licensing
685,071
1,127,770
Content created for third parties
-
1,100
685,071
1,128,870
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
155,598
385,819
Rest of the world
529,473
743,051
685,071
1,128,870
The company had one customer whose revenue individually represented 10% or more of the company’s revenue. For the year ended 31 December 2022, ignoring intra-group charges, one customer accounted for 99.9% of revenue (2021: one customer accounted for 97% of revenue).
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
4
Other Operating Income
Other operating income relates to amounts receivable under the UK Government Coronavirus Job Retention Scheme of £nil (2021: £53,203) and property rental income of £32,976 (2021: £13,637).
5
Operating (loss)/profit
2022
2021
£
£
Operating (loss)/profit for the year is stated after charging/(crediting):
Exchange losses
12,866
151
Government grants
-
(53,203)
Depreciation of property, plant and equipment
89,753
131,162
Profit on disposal of tangible fixed assets
-
(179)
Impairment of intangible assets
78,455
81,483
Amortisation of intangible assets
443,052
518,702
Operating lease costs
-
2,204
Defined pension contribution cost
2,895
5,692
Redundancy and other non-recurring employee costs
10,021
75,034
HMRC refund of part of EBT liability
-
(53,407)
Legal fees on property sublease
-
11,577
Provision against debts owed by fellow group undertakings
536,970
-
6
Auditor's remuneration
Auditors' remuneration in respect of the Company - £9,900 (2021: £9,000)
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Directors
3
3
Management and administration
-
1
Content and software development
2
5
Total
5
9
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
7
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
72,072
317,584
Social security costs
7,954
34,341
Pension costs
2,895
5,692
Share based payments
-
17,017
82,921
374,634
Staff costs above include £63,739 (2021: £76,962) capitalised as development costs. See Note 12.
Included above are redundancy and other non-recurring employee costs of £10,021 (2021: £75,034).
Share based payments of £nil (2021: £17,017) relate to share options issued to company employees under the Immotion Group Plc Share Option Scheme.
8
Directors' remuneration
2022
2021
£
£
Company pension contributions to defined contribution schemes
1,278
1,354
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021: 1).
9
Interest receivable and similar income
2022
2021
£
£
Interest income
HMRC interest
-
74
Other interest income
569
585
Total income
569
659
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
10
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on other loans
1
Interest on other financial liabilities:
Interest on lease liabilities
1,930
8,135
Total interest expense
1,930
8,136
11
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
-
(36,210)
Adjustments in respect of prior periods
36,517
-
Total UK current tax
36,517
(36,210)
The charge for the year can be reconciled to the (loss)/profit per the profit and loss account as follows:
2022
2021
£
£
(Loss)/profit before taxation
(583,001)
22,801
Expected tax (credit)/charge based on a corporation tax rate of 19.00% (2021: 19.00%)
(110,770)
4,332
Income not taxable
(71)
Expenses not deductible for tax purposes
91,498
74,703
Depreciation in excess of capital allowances
-
3,601
Short-term timing differences
-
(211)
R&D tax credit
36,517
(36,042)
Adjustments to prior periods
-
(168)
Deferred tax on losses not recognised
19,343
(82,425)
Taxation charge/(credit) for the year
36,517
(36,210)
The UK Finance Act 2021 received royal assent on 10 June 2021. This legislation maintained the UK corporation tax rate at the same level as in the year commencing 1 April 2020 at 19% for the years commencing 1 April 2021 and 1 April 2022 increasing the rate to 25% in the year commencing 1 April 2023. Deferred taxes at the reporting date have been measured using these enacted tax rates.
There were unused tax losses of £3,248,006 at 31 December 2022 (£3,521,587 at 31 December 2021). No deferred tax asset has been recognised due to the uncertainty surrounding future profits.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
12
Intangible fixed assets
Software
Development costs
Website & Domains
Total
£
£
£
£
Cost
At 1 January 2022
772,160
1,152,787
25,938
1,950,885
Additions
192,880
75,344
268,224
Disposals
(139,995)
(353,519)
(493,514)
At 31 December 2022
825,045
874,612
25,938
1,725,595
Amortisation and impairment
At 1 January 2022
540,803
675,916
19,918
1,236,637
Charge for the year
252,882
186,013
4,157
443,052
Impairment
78,455
-
78,455
Eliminated on disposals
(49,067)
(134,263)
-
(183,330)
At 31 December 2022
744,618
806,121
24,075
1,574,814
Carrying amount
At 31 December 2022
80,427
68,491
1,863
150,781
At 31 December 2021
231,357
476,871
6,020
714,248
Impairment reviews have been carried out where appropriate and impairment losses of £78,455 have been recognised in administrative expenses in the period (2021: £81,483).
Capitalised staff costs are amortised once a project is completed.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
13
Tangible fixed assets
Leasehold land and buildings
Plant and fixtures
Right of use asset
Total
£
£
£
£
Cost
At 1 January 2022
144,929
59,888
261,027
465,844
Additions
1,246
1,247
Disposals
(144,929)
(261,027)
(405,956)
At 31 December 2022
61,134
61,134
Accumulated depreciation and impairment
At 1 January 2022
121,209
43,191
205,628
370,028
Charge for the year on owned assets
23,720
10,635
-
34,355
Charge for the year on right-of-use assets
55,398
55,398
Eliminated on disposal
(144,929)
(261,027)
(405,956)
At 31 December 2022
53,826
53,825
Carrying amount
At 31 December 2022
7,309
7,309
At 31 December 2021
23,720
16,697
55,399
95,816
The carrying value of land and buildings comprises:
2022
2021
£
£
Long leasehold
23,720
Tangible fixed assets includes right-of-use assets, as follows:
Right-of-use assets
2022
2021
£
£
Net book value
Right of use asset
-
55,399
Depreciation charge for the year
Right of use asset
55,398
68,542
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
14
Investments
The company's investment in its subsidiary is held at historical cost.
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 January 2022 & 31 December 2022
1
Carrying amount
At 31 December 2022
1
At 31 December 2021
1
15
Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Investment value
Principal activities
Class of
% Held
shares held
Direct
Voting
Ranger Rob UK Limited
£1
Non-trading
Ordinary
100.00
100.00
The registered office and principal place of business for Ranger Rob UK Limited is Kingswood House, South Road, Kingswood, Bristol, England, BS15 8JF.
16
Receivables
2022
2021
£
£
Trade receivables
51,053
27,345
Corporation tax recoverable
-
17,343
VAT recoverable
2,269
6,528
Amounts owed by fellow group undertakings
1,189,713
1,148,482
Other receivables
31,928
31,359
Prepayments
1,723
41,519
Contract assets
49,739
83,195
1,326,425
1,355,771
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
17
Cash and cash equivalents
2022
2021
£
£
Cash at bank and in hand
677
3,533
Less: bank overdrafts
-
(236)
Total cash and cash equivalents
677
3,297
18
Payables
2022
2021
Notes
£
£
Loans and overdrafts
19
236
Trade and other payables
20
5,386,990
5,385,989
Taxation and social security
18,699
7,433
Lease liabilities
21
-
76,689
5,405,689
5,470,347
19
Loans and overdrafts
2022
2021
£
£
Borrowings held at amortised cost:
Other loans and overdrafts
-
236
20
Trade and other payables
2022
2021
£
£
Trade payables
2,119
3,368
Amount owed to parent undertaking
5,293,447
5,264,064
Amounts owed to fellow group undertakings
62,070
62,623
Accruals
22,609
12,258
Contract liabilities
-
35,079
Other payables
6,745
8,597
5,386,990
5,385,989
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
21
Lease liabilities
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2022
2021
£
£
Current liabilities
-
76,689
2022
2021
Contractual undiscounted cash flows are due as follows:
£
£
Not later than one year
-
84,722
2022
2021
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
1,930
8,135
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:
2022
2021
£
£
Interest expense on lease liabilities relating to low-value assets
-
2,204
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
22
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
2,895
5,692
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
The total amounts outstanding included within payables at 31 December 2022 were £NIL (2021: £413).
23
Share premium account
2022
2021
£
£
At the beginning and end of the year
695,629
695,629
Includes any premium received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
24
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
3,640
3,640
3,640
3,640
25
Reserves
Profit and loss account includes all current and prior period retained profits and losses.
26
Directors' transactions
At 31 December 2022 amounts due from directors to Immotion Studios Limited totalled £20,813 (2021: £20,443).
During the year Immotion Studios Limited received interest charged on these loans of £371 (2021: £382).
27
Controlling party
As at 31 December 2022, the immediate parent company and ultimate parent company of Immotion Studios Limited was Immotion Group Plc. However, due to the change in control as noted in Note 28, the immediate parent company and ultimate parent company of Immotion Studios Limited is LBE BidCo, Inc, a company registered in the USA.
IMMOTION STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
28
Events after the reporting date
On 13 January 2023, the company disposed its investment in Ranger Rob UK Limited for consideration of £1.
On 28 February 2023, the entirety of the company's share capital was acquired by LBE BidCo, Inc, a company registered in the USA.
2022-12-312022-01-01Mr M J HigginsonMr D MarksMr D F G WortleyMr R D FindleyMr J J CollisfalseCCH SoftwareiXBRL Review & Tag 2022.2039586352022-01-012022-12-3103958635bus:Director42022-01-012022-12-3103958635bus:Director52022-01-012022-12-3103958635bus:Director12022-01-012022-12-3103958635bus:Director22022-01-012022-12-3103958635bus:Director32022-01-012022-12-3103958635bus:RegisteredOffice2022-01-012022-12-31039586352022-12-31039586352021-01-012021-12-3103958635core:ContinuingOperations2022-01-012022-12-3103958635core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3103958635core:RetainedEarningsAccumulatedLosses2021-01-012021-12-3103958635core:IntangibleAssetsOtherThanGoodwillcore:ContinuingOperations2022-12-3103958635core:IntangibleAssetsOtherThanGoodwillcore:ContinuingOperations2021-12-3103958635core:ComputerSoftware2021-12-31039586352021-12-3103958635core:ContinuingOperations2022-12-3103958635core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3103958635core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-12-3103958635core:LandBuildingscore:LeasedAssetsHeldAsLessee2021-12-3103958635core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2021-12-3103958635core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3103958635core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3103958635core:ShareCapital2022-12-3103958635core:ShareCapital2021-12-3103958635core:SharePremium2022-12-3103958635core:SharePremium2021-12-3103958635core:RetainedEarningsAccumulatedLosses2022-12-3103958635core:RetainedEarningsAccumulatedLosses2021-12-3103958635core:UKTax2022-01-012022-12-3103958635core:UKTax2021-01-012021-12-3103958635core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2022-12-3103958635core:ComputerSoftware2022-01-012022-12-3103958635core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2022-01-012022-12-3103958635core:ComputerSoftware2021-12-3103958635core:DevelopmentCostsCapitalisedDevelopmentExpenditure2021-12-3103958635core:LandBuildingscore:LeasedAssetsHeldAsLessee2021-12-3103958635core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2021-12-31039586352021-12-3103958635core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-01-012022-12-3103958635core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-01-012022-12-3103958635core:FurnitureFittings2022-01-012022-12-3103958635core:LandBuildingscore:LongLeaseholdAssets2022-12-3103958635core:LandBuildingscore:LongLeaseholdAssets2021-12-3103958635core:CurrentFinancialInstruments2022-12-3103958635core:CurrentFinancialInstruments2021-12-3103958635core:WithinOneYear2022-12-3103958635core:WithinOneYear2021-12-3103958635bus:PrivateLimitedCompanyLtd2022-01-012022-12-3103958635bus:FRS1012022-01-012022-12-3103958635bus:Audited2022-01-012022-12-3103958635bus:FullAccounts2022-01-012022-12-31xbrli:purexbrli:sharesiso4217:GBP