I Heart Studios Group Limited
Unaudited Financial Statements
For the year ended 30 June 2023
Pages for Filing with Registrar
Company Registration No. 12683700 (England and Wales)
I Heart Studios Group Limited
Contents
Page
Balance sheet
1
Notes to the financial statements
3 - 9
I Heart Studios Group Limited
Balance Sheet
As at 30 June 2023
Page 1
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Investments
4
2,755,266
1,467,482
Current assets
Debtors
6
235,011
283,062
Cash at bank and in hand
18,184
47,022
253,195
330,084
Creditors: amounts falling due within one year
7
(636,022)
(557,487)
Net current liabilities
(382,827)
(227,403)
Net assets
2,372,439
1,240,079
Capital and reserves
Called up share capital
8
301
301
Profit and loss reserves
2,372,138
1,239,778
Total equity
2,372,439
1,240,079
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 30 June 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 2 February 2024 and are signed on its behalf by:
D Man
Director
Company Registration No. 12683700
I Heart Studios Group Limited
Statement of Changes in Equity
For the year ended 30 June 2023
Page 2
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 30 June 2022:
Balance at 1 July 2021
282
63,419
63,701
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
1,176,359
1,176,359
Issue of share capital
8
29
-
29
Reduction of shares
8
(10)
(10)
Balance at 30 June 2022
301
1,239,778
1,240,079
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
1,132,360
1,132,360
Balance at 30 June 2023
301
2,372,138
2,372,439
I Heart Studios Group Limited
Notes to the Financial Statements
For the year ended 30 June 2023
Page 3
1
Accounting policies
Company information
I Heart Studios Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Charlotte Building, 17 Gresse Street, London, United Kingdom, W1T 1QL.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.
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 under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company's group creditors have confirmed they will not seek repayment of amounts owed to them within 12 months of the signature of these accounts, unless the company is in a position to do so. Cashflow forecasts prepared by management for the company's two trading subsidiaries, from which the company derives its income, indicate growth for at least the next 12 months. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
I Heart Studios Group Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
1
Accounting policies
(Continued)
Page 4
1.4
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities 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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.5
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and 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.
1.6
Financial instruments
The Company only has basic financial instruments measured at amortised cost, with no financial instruments classified as other or basic instruments measured at fair value.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.8
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.
I Heart Studios Group Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
1
Accounting policies
(Continued)
Page 5
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing 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.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
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.
2
Exceptional item
2023
2022
£
£
Reversal of impairment charge
1,194,919
1,315,534
During the year an impairment of an intercompany balance was reversed, of amount £1,194,919 (2022: £1,315,534), reflecting the owing company's improved financial performance.
I Heart Studios Group Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 6
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
4
4
4
Fixed asset investments
2023
2022
£
£
Shares in group undertakings and participating interests
2,755,266
1,467,482
During the year the company reversed an impairment of a loan to a fellow group company and this was converted into an equity investment in that company, totalling £1,194,919 on 1 July 2022.
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 July 2022
1,467,482
Additions
1,287,784
At 30 June 2023
2,755,266
Carrying amount
At 30 June 2023
2,755,266
At 30 June 2022
1,467,482
On 1 July 2022, the company increased its investment in I Heart Studios Netherlands B.V. by £1,287,784, funded via intercompany loans.
5
Subsidiaries
Details of the company's subsidiaries at 30 June 2023 are as follows:
I Heart Studios Group Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
5
Subsidiaries
(Continued)
Page 7
Name of undertaking
Address
Class of
% Held
shares held
Direct
I Heart Studios Limited
1
Ordinary
100.00
I Heart Studios Hong Kong Limited
2
Ordinary
100.00
I Heart Studios Creative Image Solutions Limited
1
Ordinary & Preference
100.00
I Heart Studios Services Limited
1
Ordinary
100.00
I Heart Studios Netherlands B.V.
3
Ordinary
100.00
I Heart Studios International Group Limited
1
Ordinary
100.00
Registered office addresses (all UK unless otherwise indicated):
1
6th Floor Charlotte Building, 17 Gresse Street, London, United Kingdom, W1T 1QL
2
Unit 305-7, 3/F, Laford Centre, 838 Lai Chi Kok Road, Cheung Sha Wan, Kowloon, Hong Kong
3
Joop Geesinkweg 222, 1114B Amsterdam, The Netherlands
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
235,011
283,062
7
Creditors: amounts falling due within one year
2023
2022
£
£
Amounts owed to group undertakings
300,000
300,000
Corporation tax
3,884
18,558
Other taxation and social security
3,016
Other creditors
1,158
12
Accruals and deferred income
327,964
238,917
636,022
557,487
8
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
299,471 Ordinary shares of 0.1p each
299,471
299,471
299
299
I Heart Studios Group Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
8
Called up share capital
(Continued)
Page 8
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
1,750 Preferred Ordinary Shares of 0.1p each
1,750
1,750
2
2
Preference shares classified as equity
2
2
Total equity share capital
(299)
(299)
Preference shares have attached to them the right to receive the first £675,000 of the first preferred dividend and also the same amount on a capital distribution, including on winding up.
9
Related party transactions
The company has taken advantage of the exemption conferred by Financial Reporting Standard 102 Section 33 'Related Party Disclosures' paragraph 33.1A not to disclose transactions with certain group companies on the ground that the entities party to the transactions are wholly owned members within the same group.
During the year, £300,000 loans that were owed to Chiltern Capital Nominees Limited were transferred to Creative Image Nominees Ltd.
As at the balance sheet date the company owed Creative Image Nominees Limited, a shareholder of the company as at 30 June 2023, £200,000 of secured loan stock, via fixed and floating charges over the assets of the company. The company also owed Creative Image Nominees Limited £100,000 in unsecured loan stock.
A cross guarantee has been secured over the assets of the company, with respect to a Recovery Loan Scheme loan of £220,000, provided to I Heart Studios Creative Image Solutions Limited.
10
Parent company
There is no ultimate controlling party.
11
Prior period adjustment
I Heart Studios Group Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
11
Prior period adjustment
(Continued)
Page 9
Reconciliation of changes in equity
1 July
30 June
2021
2022
£
£
Adjustments to prior year
Recognition of management fees
-
(215,584)
Equity as previously reported
63,701
1,455,663
Equity as adjusted
63,701
1,240,079
Analysis of the effect upon equity
Profit and loss reserves
-
(215,584)
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Recognition of management fees
(215,584)
Profit as previously reported
1,391,943
Profit as adjusted
1,176,359
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