Company registration number 04342267 (England and Wales)
GENERATION MEDIA LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MARCH 2023
Century House
Wargrave Road
Henley-on-Thames
Oxfordshire
United Kingdom
RG9 2LT
GENERATION MEDIA LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11 - 12
Statement of changes in equity
13
Notes to the financial statements
14 - 28
GENERATION MEDIA LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr. D. Weller
Mrs. V. Weller
Secretary
Mr. D. Weller
Company number
04342267
Registered office
Century House
Wargrave Road
Henley-on-Thames
Oxfordshire
United Kingdom
RG9 2LT
Auditor
Verallo
Century House
Wargrave Road
Henley-on-Thames
Oxfordshire
United Kingdom
RG9 2LT
GENERATION MEDIA LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
The CEO and Director present the strategic report for the year ended 31 March 2023.
Generation Media Limited is continuing to develop strategic plans for the future of the business which as always are reviewed every year.
Our key objectives are:
Maintain and strengthen our market-leading position as the world’s leading independent media specialist and Audience 1st experts in communication to Children, Families and Gamers.
Develop and support our customers' businesses specifically and generally to ensure that we maintain the highest and benchmarkable standards of professionalism and expertise.
Recruit and invest in key personnel to drive business growth and strengthen offering to clients.
To continue to invest in systems and services both bespoke and off the shelf to increase and support our existing and new business growth in the online and traditional media sectors.
To be a leader in the fast-emerging children's and youth digital online media buying space.
To continue to increase our market share in the Gaming, Content and Entertainment marketing arena.
To continue to develop our brand in new overseas markets notably Germany and the United States.
Maintain and build upon our strong financial performance and strengths against the current economic climate.
REVIEW OF BUSINESS
The principal activity of the company is the provision of media buying and marketing services to advertisers in the Children, Families and Gamers’ marketing space.
Key performance indicators
During the year, the turnover and gross profit margin remained consistent at £49m (2022: £46.9m) and 15.6% (2022: 14.0%) respectively.
EBITDA has increased from £1.72m in 2022 to £2.98m in 2023.
Employees
As an employer, Generation Media Limited provides an effective and ongoing year-long training programme to ensure that all staff members are trained above and beyond the required standard. The Company is proud to be an accredited Platinum CPD business awarded by our industry body, the IPA. We are also now an accredited Gold standard ‘Investor in People’ and have been awarded a best place to work award by Campaign Magazine.
Principal risks and uncertainties
Credit Risk
The Company operates in a field where significant turnover is required to drive advantageous deals for our clients. Scale has become increasingly important in the media buying space and whilst we operate in a specific media space, sufficient scale is still required to leverage the necessary benefits our clients' investments deserve. Like all agencies who are first party principals, we always run a risk of defaulted payments. Our credit control and finance management team is necessarily honed to the highest standards to ensure the Company protects itself from such eventualities. In this regard we continually invest in Company credit and tracking systems to assist in evaluating risk that the Company may be exposed to. We also maintain a strong risk management policy and ensure our turnover is credit insured where possible to mitigate these risks. We have also continued to increase our investment in accountancy personnel to improve credit control and general speed of response to clients' requirements and any fiscal issues that may occur.
GENERATION MEDIA LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
Technical Risk
The Company continually invests in new technology and systems to maintain our industry leading position. The next five years will necessarily mean increased investment in trading and media planning systems in the face of the growing importance of the online world, and the impact of AI, to our consumers and the modus operandi of media buying transactions. The media buying world will become increasingly benchmarked and audited and the Company will need to ensure its insurances and protections are updated and evaluated.
Future developments
Predicting future events in the media industry in the UK, Europe and the world as a whole has continued to become increasingly harder and more complex especially in the face of rising inflation in both the UK & global economy.
The continuing pace of technology and its impact on how consumers relate and are exposed to commercial messages is a constant factor for consideration in developing our business. Necessarily, the Company has and will continue to invest in technical and research services to keep one step ahead of the marketplace. We have a unique brand and will seek over the next 5 years to develop all parts of that brand locally in the home markets and internationally to maintain our leadership.
Given the current economic position within the UK and globally, persistent inflation and rising interest rates will remain a challenge within the media industry. The risks to UK economic growth remain significant and future prospects will no doubt be influenced by these developments. Whilst the current economic climate remains a challenge, the global entertainment and media industry has been recovering following disruption from the COVID-19 pandemic. Since last year, we have witnessed demand for advertising & entertainment increase and expect this to continue throughout the upcoming year.
Many of our clients are international and Generation Media will continue to evaluate new and current systems to assist our customers in cross market tasks in the face of transition.
In our opinion, the economic environment will continue to evolve at a rapid pace in the long, medium and short terms. Like many businesses that are ambitious, we sincerely believe that a degree of stability will return to the economy but if this should not happen the Company is well set to manage most eventualities: financially and in thought-leadership.
Overall, in the coming year (2023/24) we aim to grow revenues at a rate planned. We will continue to effectively develop our relationships with customers, supplier-partners and industry stakeholders in so doing, generating new business and increased wealth for our customers and of course our own business.
Mr. D. Weller
Director
26 February 2024
GENERATION MEDIA LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £385,000 (2022: £385,000). The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr. D. Weller
Mrs. V. Weller
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Auditor
The auditor, Verallo, is deemed to be reappointed under section 487(2) 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;
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.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
GENERATION MEDIA LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 5 -
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.
On behalf of the board
Mr. D. Weller
Director
26 February 2024
GENERATION MEDIA LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GENERATION MEDIA LIMITED
- 6 -
Opinion
We have audited the financial statements of Generation Media Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, 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 31 March 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
In auditing the financial statements, we have concluded that the directors' 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 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.
GENERATION MEDIA LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GENERATION MEDIA LIMITED
- 7 -
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.
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 and 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.
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.
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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
GENERATION MEDIA LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GENERATION MEDIA LIMITED
- 8 -
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditors/audit-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor%E2%80%99s-responsibilities-for. This description forms part of our auditor’s report.
GENERATION MEDIA LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GENERATION MEDIA LIMITED
- 9 -
Use of 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.
Michelle Hewitt-Dutton FCCA (Senior Statutory Auditor)
For and on behalf of Verallo
Statutory Auditor
Office: Henley-on-Thames
1 March 2024
GENERATION MEDIA LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
48,961,812
46,890,873
Cost of sales
(41,300,768)
(40,324,971)
Gross profit
7,661,044
6,565,902
Administrative expenses
(5,474,176)
(5,024,356)
Operating profit
4
2,186,868
1,541,546
Interest receivable and similar income
8
33,409
369
Interest payable and similar expenses
9
(77)
3,846
Amounts written off loans
10
(128,185)
Profit before taxation
2,092,015
1,545,761
Tax on profit
11
(112,984)
(408,183)
Profit for the financial year
1,979,031
1,137,578
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 14 to 28 form part of these financial statements
GENERATION MEDIA LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
257,408
289,621
Current assets
Debtors
14
5,880,070
4,359,399
Cash at bank and in hand
12,150,235
9,753,657
18,030,305
14,113,056
Creditors: amounts falling due within one year
15
(7,044,606)
(4,731,975)
Net current assets
10,985,699
9,381,081
Total assets less current liabilities
11,243,107
9,670,702
Provisions for liabilities
Deferred tax liability
16
39,078
60,704
(39,078)
(60,704)
Net assets
11,204,029
9,609,998
Capital and reserves
Called up share capital
18
1,030
1,030
Share premium account
75,839
75,839
Profit and loss reserves
11,127,160
9,533,129
Total equity
11,204,029
9,609,998
GENERATION MEDIA LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 MARCH 2023
31 March 2023
- 12 -
The financial statements were approved by the board of directors and authorised for issue on 26 February 2024 and are signed on its behalf by:
Mr. D. Weller
Director
Company Registration No. 04342267
The notes on pages 14 to 28 form part of these financial statements
GENERATION MEDIA LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
Share capital
Share premium account
Share based payment reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 April 2021
930
8,324,920
8,325,850
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
-
1,137,578
1,137,578
Issue of share capital
18
100
-
-
100
Dividends
12
-
-
-
(385,000)
(385,000)
Transfers
-
-
(455,631)
455,631
-
Other movements
-
75,839
455,631
-
531,470
Balance at 31 March 2022
1,030
75,839
9,533,129
9,609,998
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
-
1,979,031
1,979,031
Dividends
12
-
-
-
(385,000)
(385,000)
Balance at 31 March 2023
1,030
75,839
11,127,160
11,204,029
The notes on pages 14 to 28 form part of these financial statements
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 14 -
1
Accounting policies
Company information
Generation Media Limited is a private company limited by shares incorporated in England and Wales (04342267). The registered office is Century House, Wargrave Road, Henley-on-Thames, Oxfordshire, United Kingdom, RG9 2LT.
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.
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Generation Media Enterprises Limited. These consolidated financial statement are available from its registered office, Century House, Wargrave Road, Henley-on-Thames, RG9 2LT.
1.2
Going concern
The financial statements have been prepared on a going concern basis, which assumes the company will continue in operational existence, and will be able to meet its liabilities as they fall due, for a period of at least twelve months from the date of approval of the financial statements.true
The directors have reviewed the continued impact of the economy on the operations and financial position of the company and have a reasonable expectation that the company has adequate resources to continue to adopt the going concern basis of accounting in preparing the financial statements.
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.3
Turnover
Turnover represents amounts receivable for advertising and media services net of VAT and trade discounts.
Revenue from contracts for advertising and media services, is recognised over the life of the campaign.
1.4
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 improvements
Over the life of the lease
Fixtures, fittings & equipment
25% reducing balance
Motor vehicles
33% straight line
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 credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
1.6
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.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, 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 have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities
Basic financial liabilities, including trade creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
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.
1.9
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.
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 18 -
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.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest.
A corresponding adjustment is made to equity.
The company has granted share options to its key management personnel.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 19 -
1.14
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
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment of tangible assets
The directors determined whether there are indicators of impairment of the company’s tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
Tangible assets consist of leasehold improvements, fixtures, fittings and equipment, and motor vehicles. The carrying amount of tangible assets at the end of the year was £257,408 as stated in note 13 of the accounts.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 20 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Supplier rebates
At the year end, supplier rebates are recognised in other debtors. The amounts receivable from rebates affect the cost of sales on invoice, and are often subject to negotiation after the balance sheet date. A number of agreements are non-coterminous with the financial year end, requiring judgement over the amounts receivable. At the balance sheet date the directors estimate the amount of rebate due to the company, based upon the agreements in place.
At the balance sheet date, management had estimated supplier rebates due back to the company stood at £307,463. A 10% increase or decrease in the rebates would result in a £30,746 rise or drop in profit before tax respectively.
Leasehold improvements - useful life
IAS 16 requires that the the legal or similar limits on the use of an asset, such as the expiry date of related leases, should be considered in determining the useful life of the asset. Therefore, it would be generally expected that the useful life (that is the depreciation period) of the leasehold improvements is the same as the lease term under IFRS 16. However, there might be situations when the useful life of a leasehold improvement exceeds the assessed lease term.
Management have estimated that the useful life of the leasehold improvements is 5 years based on the remaining term of the leasehold.
At the balance sheet date, an increase in the useful life of the leasehold improvements from 5 years to 10 years would decrease the amortisation charge for the period from £52,992 to £26,499, and increase the carrying value of leasehold improvements from £257,408 to £283,901.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover
Media planning and buying
48,961,812
46,890,873
Other significant revenue
Interest income
33,409
369
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
3
Turnover and other revenue
(Continued)
- 21 -
Turnover analysed by geographical market
2023
2022
£
£
UK and Ireland
42,997,658
40,856,743
Europe
2,769,384
770,437
Rest of World
3,194,770
5,263,693
48,961,812
46,890,873
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(418,379)
(349,566)
Depreciation of owned tangible fixed assets
180,969
178,481
Profit on disposal of tangible fixed assets
(13,498)
Share-based payments
455,631
Operating lease charges
513,919
711,567
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
22,500
25,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales and administration
44
39
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
6
Employees
(Continued)
- 22 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,256,163
2,423,027
Social security costs
266,047
230,854
Pension costs
102,391
85,414
2,624,601
2,739,295
Included in wages and salaries is £nil (2022 - £455,631) relating to equity settled share based payments, as referred to in note 18.
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
18,860
17,519
Company pension contributions to defined contribution schemes
20,000
20,000
38,860
37,519
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
33,409
369
9
Interest payable and similar expenses
2023
2022
£
£
Other interest
77
(3,846)
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
10
Amounts written off investments
2023
2022
£
£
Amounts written off current loans
(128,185)
-
At the year end an amount totalling £128,185 owed from a company under mutual control, was written off as a result of doubts over its recoverability.
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
134,610
388,355
Adjustments in respect of prior periods
(15)
Total current tax
134,610
388,340
Deferred tax
Origination and reversal of timing differences
(21,626)
19,843
Total tax charge
112,984
408,183
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
11
Taxation
(Continued)
- 24 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
2,092,015
1,545,761
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
397,483
293,695
Tax effect of expenses that are not deductible in determining taxable profit
50,996
111,373
Effect of change in corporation tax rate
(7,871)
13,839
Research and development tax credit
(10,724)
Deferred tax adjustments in respect of prior years
(11,481)
Super deduction
(2,872)
Share scheme deduction under part 12 CTA 2009
(314,557)
Provisions
1,286
Taxation charge for the year
112,984
408,183
As of 1 April 2023 the corporation tax rate in the UK increased to 25% (rather than remaining at 19% as previously enacted). The 25% main rate of corporation tax and marginal relief will be relevant for any asset sales or timing differences expected to reverse on or after 1 April 2023.
12
Dividends
2023
2022
£
£
Interim paid
385,000
385,000
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 25 -
13
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2022
262,151
313,260
81,828
657,239
Additions
115,521
41,437
156,958
Disposals
(29,527)
(29,527)
At 31 March 2023
262,151
428,781
93,738
784,670
Depreciation and impairment
At 1 April 2022
168,908
180,038
18,672
367,618
Depreciation charged in the year
52,992
92,780
35,197
180,969
Eliminated in respect of disposals
(21,325)
(21,325)
At 31 March 2023
221,900
272,818
32,544
527,262
Carrying amount
At 31 March 2023
40,251
155,963
61,194
257,408
At 31 March 2022
93,243
133,222
63,156
289,621
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,329,760
2,287,171
Other debtors
1,800,298
1,242,282
Prepayments and accrued income
1,750,012
829,946
5,880,070
4,359,399
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 26 -
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
3,690,573
3,254,386
Amounts owed to group undertakings
154,157
9,826
Corporation tax
449,168
388,339
Other taxation and social security
349,129
319,171
Other creditors
188,380
68,714
Accruals and deferred income
2,213,199
691,539
7,044,606
4,731,975
The amounts owed to group undertakings is interest-free, unsecured and repayable on demand.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
39,078
60,704
2023
Movements in the year:
£
Liability at 1 April 2022
60,704
Credit to profit or loss
(21,626)
Liability at 31 March 2023
39,078
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
102,391
85,414
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.
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 27 -
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
103,000
103,000
1,030
1,030
The company has one class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
19
Share-based payment transactions
Number of share options
2023
2022
Number
Number
Outstanding at 1 April 2022
-
10,000
Exercised
-
(10,000)
Outstanding at 31 March 2023
-
-
Exercisable at 31 March 2023
-
-
On 29 March 2022, all share options held, vested and were exercised, as a result of an exit event due to a share for share exchange which took place between Generation Media Limited and Generation Media Enterprises Limited. As a result of the exercise, an additional 10,000 ordinary 1p shares were issued, 4,650 for an exercise price of £7 per share and 5,350 for an exercise price of £8.11 per share, giving rise to a share premium of £75,838.50.
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
410,000
114,419
Between two and five years
170,833
162,093
580,833
276,512
GENERATION MEDIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 28 -
21
Directors' transactions
During the year the directors maintained a loan account with the company. At the year end the company owed the directors £nil (2022: £95,502), as included in other creditors.
22
Ultimate controlling party
The immediate and ultimate parent undertaking is Generation Media Enterprises Limited, a company incorporated in England & Wales, Generation Media Enterprises Limited is the smallest and largest group to consolidate these financial statements. Copies of the consolidated financial statements of Generation Media Enterprises Limited are available from Companies House.
The ultimate controlling party is GME Trustees Limited.
23
Related party transactions
During the year the company entered into transactions with companies under common control. Sales transactions were entered with the related companies to the value of £27,439 (2022: £37,925), purchases to the value of £408,732 (2022: £2,236,105), and management charges amounting to £1,532,208 (2022: £820,738) were charged to Generation Media Limited.
At the year end, balances owed from these companies totalled £1,337,948 (2022: £1,082,300). The amount owed is unsecured, interest-free and is repayable on demand.
At the year end an amount totalling £128,185 owed from a company under mutual control, was written off as a result of doubts over its recoverability.
2023-03-312022-04-01falseCCH SoftwareCCH Accounts Production 2023.100No description of principal activityMrs. V. WellerMrs. V. WellerMr. D. Weller043422672022-04-012023-03-3104342267bus:CompanySecretaryDirector12022-04-012023-03-3104342267bus:Director12022-04-012023-03-3104342267bus:CompanySecretary12022-04-012023-03-3104342267bus:Director22022-04-012023-03-3104342267bus:RegisteredOffice2022-04-012023-03-31043422672023-03-31043422672021-04-012022-03-3104342267core:RetainedEarningsAccumulatedLosses2021-04-012022-03-3104342267core:RetainedEarningsAccumulatedLosses2022-04-012023-03-31043422672022-03-3104342267core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-03-3104342267core:FurnitureFittings2023-03-3104342267core:MotorVehicles2023-03-3104342267core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-03-3104342267core:FurnitureFittings2022-03-3104342267core:MotorVehicles2022-03-3104342267core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3104342267core:CurrentFinancialInstrumentscore:WithinOneYear2022-03-3104342267core:ShareCapital2023-03-3104342267core:ShareCapital2022-03-3104342267core:SharePremium2023-03-3104342267core:SharePremium2022-03-3104342267core:RetainedEarningsAccumulatedLosses2023-03-3104342267core:RetainedEarningsAccumulatedLosses2022-03-3104342267core:ShareCapital2021-03-3104342267core:SharePremium2021-03-3104342267core:OtherMiscellaneousReserve2021-03-3104342267core:RetainedEarningsAccumulatedLosses2021-03-31043422672021-03-3104342267core:OtherMiscellaneousReserve2022-03-3104342267core:OtherMiscellaneousReserve2023-03-3104342267core:ShareCapital2021-04-012022-03-3104342267core:SharePremium2021-04-012022-03-3104342267core:LandBuildingscore:LongLeaseholdAssets2022-04-012023-03-3104342267core:FurnitureFittings2022-04-012023-03-3104342267core:MotorVehicles2022-04-012023-03-310434226712022-04-012023-03-310434226712021-04-012022-03-3104342267core:UKTax2022-04-012023-03-3104342267core:UKTax2021-04-012022-03-310434226722022-04-012023-03-310434226722021-04-012022-03-310434226732022-04-012023-03-310434226732021-04-012022-03-3104342267core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-03-3104342267core:FurnitureFittings2022-03-3104342267core:MotorVehicles2022-03-31043422672022-03-3104342267core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-04-012023-03-3104342267core:CurrentFinancialInstruments2023-03-3104342267core:CurrentFinancialInstruments2022-03-3104342267core:WithinOneYear2023-03-3104342267core:WithinOneYear2022-03-3104342267core:BetweenTwoFiveYears2023-03-3104342267core:BetweenTwoFiveYears2022-03-3104342267bus:PrivateLimitedCompanyLtd2022-04-012023-03-3104342267bus:FRS1022022-04-012023-03-3104342267bus:Audited2022-04-012023-03-3104342267bus:FullAccounts2022-04-012023-03-31xbrli:purexbrli:sharesiso4217:GBP