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Company No: 05968558 (England and Wales)

THE SMALLS LIMITED

Unaudited Financial Statements
For the financial year ended 31 December 2023
Pages for filing with the registrar

THE SMALLS LIMITED

Unaudited Financial Statements

For the financial year ended 31 December 2023

Contents

THE SMALLS LIMITED

COMPANY INFORMATION

For the financial year ended 31 December 2023
THE SMALLS LIMITED

COMPANY INFORMATION (continued)

For the financial year ended 31 December 2023
DIRECTORS Anna Grund
Franck Rossini
James Anthony Vaughan
REGISTERED OFFICE Finsgate
5-7 Cranwood Street
London
EC1V 9EE
United Kingdom
COMPANY NUMBER 05968558 (England and Wales)
ACCOUNTANT Gravita Business Services Limited
Aldgate Tower
2 Leman Street
London
E1 8FA
THE SMALLS LIMITED

BALANCE SHEET

As at 31 December 2023
THE SMALLS LIMITED

BALANCE SHEET (continued)

As at 31 December 2023
Note 2023 2022
£ £
Fixed assets
Intangible assets 3 97,005 113,182
Tangible assets 4 6,902 4,112
Investments 5 377 377
104,284 117,671
Current assets
Debtors 6 10,299 94,924
Cash at bank and in hand 17,294 1,913
27,593 96,837
Creditors: amounts falling due within one year 7 ( 450,114) ( 980,206)
Net current liabilities (422,521) (883,369)
Total assets less current liabilities (318,237) (765,698)
Creditors: amounts falling due after more than one year 8 ( 1,663,826) ( 961,109)
Net liabilities ( 1,982,063) ( 1,726,807)
Capital and reserves
Called-up share capital 346 346
Share premium account 835,634 835,634
Profit and loss account ( 2,818,043 ) ( 2,562,787 )
Total shareholders' deficit ( 1,982,063) ( 1,726,807)

For the financial year ending 31 December 2023 the Company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

The financial statements of The Smalls Limited (registered number: 05968558) were approved and authorised for issue by the Board of Directors on 01 May 2024. They were signed on its behalf by:

James Anthony Vaughan
Director
THE SMALLS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
THE SMALLS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.

General information and basis of accounting

The Smalls Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is Finsgate, 5-7 Cranwood Street, London, EC1V 9EE, United Kingdom.

The financial statements have been prepared under the historical cost convention and in accordance with Section 1A of Financial Reporting Standard 102 (FRS 102) ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ issued by the Financial Reporting Council.

The functional currency of The Smalls Limited is considered to be pounds sterling because that is the currency of the primary economic environment in which the Company operates.

Going concern

The directors have assessed the Balance Sheet and likely future cash flows at the date of approving these financial statements. The directors note that the business has net liabilities of £1,982,063. The Company is supported through loans from the directors and the shareholders and a group company. The directors have confirmed that the loan facilities will continue to be available for at least 12 months from the date of signing these financial statements and the directors will continue to support the Company as they have the funds to do so. Post year end, the Company has secured further funding and has seen improved trading activities and performance resulting in a profit in the first quarter post year end. The Company also has reduced overheads and will use funding available to scale as and when required to meet demand for their services.

As a result of the above, the directors are confident that the Company will be able to meet their liabilities as they fall due for a minimum period of 12 months from the date of signing the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Basis of consolidation

The Company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

Foreign currency

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Balance Sheet date are reported at the rates of exchange prevailing at that date.

Exchange differences are recognised in the Profit and Loss Account in the period in which they arise except for exchange differences arising on gains or losses on non-monetary items which are recognised in the Statement of Comprehensive Income.

Turnover

Turnover is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Turnover from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Where a contract has only been partially completed at the Balance Sheet date turnover represents the fair value of the service provided to date based on the stage of completion of the contract activity at the Balance Sheet date. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

Interest income

Interest income is recognised when it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Employee benefits

Defined contribution schemes
The Company operates a defined contribution scheme. The amount charged to the Profit and Loss Account in respect of pension costs and other post-retirement benefits is the contributions payable in the financial year. Differences between contributions payable in the financial year and contributions actually paid are included as either accruals or prepayments in the Balance Sheet.

Finance costs

Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Taxation

Current tax
Current tax is provided at amounts expected to be paid (or recoverable) using the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.

Deferred tax
Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the Company's financial statements. Deferred tax is provided in full on timing differences which result in an obligation to pay more or less tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws. Deferred tax assets and liabilities are not discounted.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. Intangible assets include website development costs.

Other intangible assets 3 years straight line
Tangible fixed assets

Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets, other than investment properties and freehold land, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line basis over its expected useful life, as follows:

Office equipment 3 years straight line

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

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.

Leases

The Company as lessee
Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each Balance Sheet date. If there is objective evidence of impairment, an impairment loss is recognised in the Profit and Loss Account as described below.

Non-financial assets
At each balance sheet date, the company reviews 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). The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

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. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Financial assets
An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

For financial assets carried at amortised cost, the amount of impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

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.

Financial assets and liabilities are only offset in the Balance Sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

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.

Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.

Investments
Investments in non-convertible preference shares and non-puttable ordinary or preference shares (where shares are publicly traded or their fair value is reliably measurable) are measured at fair value through the Profit and Loss Account. Where fair value cannot be measured reliably, investments are measured at cost less impairment.

2. Employees

2023 2022
Number Number
Monthly average number of persons employed by the Company during the year, including directors 7 7

3. Intangible assets

Other intangible assets Total
£ £
Cost
At 01 January 2023 760,624 760,624
Additions 24,537 24,537
At 31 December 2023 785,161 785,161
Accumulated amortisation
At 01 January 2023 647,442 647,442
Charge for the financial year 40,714 40,714
At 31 December 2023 688,156 688,156
Net book value
At 31 December 2023 97,005 97,005
At 31 December 2022 113,182 113,182

4. Tangible assets

Office equipment Total
£ £
Cost
At 01 January 2023 31,537 31,537
Additions 3,707 3,707
At 31 December 2023 35,244 35,244
Accumulated depreciation
At 01 January 2023 27,425 27,425
Charge for the financial year 917 917
At 31 December 2023 28,342 28,342
Net book value
At 31 December 2023 6,902 6,902
At 31 December 2022 4,112 4,112

5. Fixed asset investments

Investments in subsidiaries

2023
£
Cost
At 01 January 2023 377
At 31 December 2023 377
Carrying value at 31 December 2023 377
Carrying value at 31 December 2022 377

Investments in shares

Name of entity Registered office Principal activity Class of
shares
Ownership
31.12.2023
Ownership
31.12.2022
The Smalls Productions Pte. Ltd. (Singapore) 10 Collyer Quay #10-01, Ocean Financial Centre, Singapore, 049315 Motion picture production Ordinary 100.00% 100.00%
The Smalls Media Production LLC (United States) C/O Horzepa, Spiegel & Associates PC, 8th Floor 30 Wall Street, New York, New York, 10005 Motion picture production Ordinary 100.00% 100.00%

6. Debtors

2023 2022
£ £
Trade debtors 5,993 77,836
Other debtors 4,306 17,088
10,299 94,924

7. Creditors: amounts falling due within one year

2023 2022
£ £
Bank loans and overdrafts 21,362 25,742
Trade creditors 93,370 183,433
Amounts owed to Group undertakings 0 420,418
Taxation and social security 97,271 96,589
Other creditors 238,111 254,024
450,114 980,206

Amounts owed to Group undertakings are repayable on demand and do not bear interest.

Included within other creditors are unsecured loans totalling £138,150 (2022: £82,500) from J A Vaughan. This loan accrues interest at 0% interest until January 2024 and is repayable on demand. Whilst the loan has been classified within creditors due within one year, the directors note there is no intention for the loan to be called for repayment within this period unless the Company has sufficient funds to do so.

8. Creditors: amounts falling due after more than one year

2023 2022
£ £
Bank loans 30,063 38,650
Amounts owed to Group undertakings 548,607 0
Convertible loan notes 250,000 250,000
Other creditors 835,156 672,459
1,663,826 961,109

9. Financial commitments

Commitments

Total future minimum lease payments under non-cancellable operating leases are as follows:

2023 2022
£ £
within one year 432 432

Pensions

The Company operates a defined contribution pension scheme for the directors and employees. The assets of the scheme are held separately from those of the Company in an independently administered fund.

2023 2022
£ £
Unpaid contributions due to the fund (inc. in other creditors) 330 473

10. Related party transactions

Remuneration was paid to the directors of £Nil (2022: £Nil).

Included within other creditors falling due within one year are unsecured loans totalling £138,150 (2022: £82,500) from J A Vaughan. These loans accrue interest from (0% - 3%) per annum and are not repayable before 1 January 2024.

Included within other creditors falling due after more than one year are unsecured loans totalling £613,193 (2022: £479,593) from J A Vaughan. These loans accrue interest from (2.5% - 4%) per annum and are not repayable before 1 January 2025.

Included within convertible unsecured loans within creditors falling due after more than one year is a loan of £125,000 (2022: £125,000) from J A Vaughan. This loan attracts an interest rate of 8% and is not repayable before 1 January 2025.

Included within other creditors falling due after more than one year is a loan of £30,000 (2022: £30,000) from K Tancred who is a shareholder in the Company. The loan accrues interest at 5% per annum and is not repayable before 1 January 2025.

Included within other creditors falling due after more than one year is an unsecured loan of £10,000 (2022: £10,000) from A Grund. This loan accrues interest at 2.5% per annum (2022: 2.5% per annum) and is not repayable before 1 January 2025.

Included within other creditors falling due after more than one year is an unsecured loan of £17,429 (2022: £17,429) from F Rossini. This loan accrues interest at 2.5% per annum (2022: 2.5% per annum) and is not repayable before 1 January 2025.

The Company has taken advantage of the exemption available under FRS 102 Section 1A not to disclose details of transactions with wholly owned members of the group headed by the Company.

11. Ultimate controlling party

There is no ultimate controlling party.