Company registration number 06555978 (England and Wales)
ARTS ALLIANCE LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
ARTS ALLIANCE LIMITED
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 7
ARTS ALLIANCE LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
4
13,244,435
8,025,005
Current assets
Debtors
5
824,299
794,921
Investments
6
50,000
Cash at bank and in hand
208,550
172,843
1,032,849
1,017,764
Creditors: amounts falling due within one year
7
(270,040)
(307,579)
Net current assets
762,809
710,185
Net assets
14,007,244
8,735,190
Capital and reserves
Called up share capital
8
1,520
1,020
Share premium account
15,200,469
10,200,969
Profit and loss reserves
(1,194,745)
(1,466,799)
Total equity
14,007,244
8,735,190
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
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 20 September 2024 and are signed on its behalf by:
G J Roberts
Director
Company registration number 06555978 (England and Wales)
ARTS ALLIANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information
Arts Alliance Limited is a private company limited by shares incorporated in England and Wales. The registered office is 106 Kensington High Street, London, England, W8 4SG.
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 disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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
The directors prepare annual budgets and forecasts in order to ensure that they have sufficient liquidity in place in the business. Based on their latest assessment of the budgets and forecasts for the business of the Company, the directors consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
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 and the effective interest rate applicable.
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.
Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
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.
ARTS ALLIANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
1.6
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position 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.
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.
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.
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.
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 income statement 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.
ARTS ALLIANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
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 income statement, 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.
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.
The key accounting policies and key sources of estimation uncertainty related to impairment of investments and other debtors. In the current year no impairment charge has been recognised.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
2
2
ARTS ALLIANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
4
Fixed asset investments
2023
2022
£
£
Shares in group undertakings and participating interests
1,025,005
1,025,005
Loans to group undertakings and participating interests
11,925,000
7,000,000
Other equity investments
294,430
13,244,435
8,025,005
Movements in fixed asset investments
Shares in associates
Loans to associates
Other investments
Total
£
£
£
£
Cost or valuation
At 1 January 2023
1,025,005
7,000,000
-
8,025,005
Additions
-
4,925,000
-
4,925,000
Valuation changes
-
-
294,430
294,430
At 31 December 2023
1,025,005
11,925,000
294,430
13,244,435
Carrying amount
At 31 December 2023
1,025,005
11,925,000
294,430
13,244,435
At 31 December 2022
1,025,005
7,000,000
-
8,025,005
During the year, an impairment previously made has been reversed based on the sale of the investment in January 2024.
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Corporation tax recoverable
46,846
Other debtors
777,453
794,921
824,299
794,921
6
Current asset investments
2023
2022
£
£
Other investments
50,000
ARTS ALLIANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
7
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
2,994
1,811
Amounts owed to group undertakings
250,000
240,000
Corporation tax
48,747
Other creditors
17,046
17,021
270,040
307,579
8
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
152,020
102,020
1,520
1,020
On 26 April 2023, the company issued 5,000 ordinary shares of £0.01 each for consideration of £500,000.
On 17 July 2023, the company issued 10,000 ordinary shares of £0.01 each for consideration of £1,000,000.
On 01 August 2023, the company issued 15,000 ordinary shares of £0.01 each for consideration of £1,500,000.
On 06 September 2023, the company issued 10,000 ordinary shares of £0.01 each for consideration of £1,000,000.
On 29 September 2023, the company issued 5,000 ordinary shares of £0.01 each for consideration of £500,000.
On 25 October 2023, the company issued 5,000 ordinary shares of £0.01 each for consideration of £500,000.
9
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Iain McManus
Statutory Auditor:
Sanders
Date of audit report:
20 September 2024
10
Events after the reporting date
As part of restructuring, in June 2024 Arts Alliance Ltd transferred to an affiliated entity at fair market value the following assets: majority of shares and loans in an associated company (at a cost of £13m) at a market value of £21.4m in the form of a loan note. The parent company at the time, Nationwide Leisure Limited transferred its entire shareholding in Arts Alliance Limited to an affiliated entity. Arts Alliance Ltd performed a reduction its share capital and then voted a dividend in species of the £21.4m loan note to its new parent company.
ARTS ALLIANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
11
Related party transactions
During the year the company paid consultancy fees of £Nil (2022: £300,000) to Hoegh Capital Partners Limited. At 31 December 2023 the company owed £Nil (2022: £240,000) to Hoegh Capital Partners Limited. The company is related party by virtue of the fact that Thomas Hoegh is a director of both entities.
As such, the company also paid finance and accounting services of £26,589 (2022: £26,050) to Hoegh Capital Partners Limited. At 31 December 2023 the company owed £Nil (2023: £Nil) to Hoegh Capital Partners Limited. This company is a related party by virtue of the fact that Thomas Hoegh is a director of each entity.
In the current year a fixed term loan in the amount of £Nil (2022: £50,000) remained outstanding from Park Circus Limited. Interest of £524 (2022: £4,750) was charged during the year of which £Nil (2022: £Nil) owed to the company. Thomas Hoegh is a director of this company.
During the year £4,925,000 (2022: £2,750,000) was advanced to Garden Campus Limited and repaid Nil (2022: £Nil). Interest of £Nil (2022: £641,849) was charged during the year and £777,452 (2022: £794,888) of interest and principal of £11,925,000 (2022: £7,000,000) remained outstanding at the year end. Thomas Hoegh is a director of this company.
During the year, the company borrowed £250,000 (2022: £Nil) from its immediate parent company. The loan is unsecured, interest free and repayable on demand. Since the year end, the loan was converted to equity at a rate of £100 per share.
12
Parent company
The immediate and ultimate parent company is Arts Alliance Investments Limited, a company registered in Guernsey. In the opinion of the directors the company is under the control of Thomas Hoegh.