Molinare TV & Film Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 08066696 (England and Wales)
Molinare TV & Film Limited
Company Information
Directors
R MacKenzie
J Woodward
N Bennett
Secretary
T Krailing
Company number
08066696
Registered office
34 Fouberts Place
London
W1F 7PX
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Molinare TV & Film Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of cash flows
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Notes to the financial statements
16 - 37
Molinare TV & Film Limited
Strategic Report
For the year ended 31 December 2023
Page 1

The directors present the strategic report and financial statements for the year ended 31 December 2023.

Fair review of the business

During 2023 the Company rebranded to become the Molinare Creative Group. Building on over 50 years of experience, providing creative excellence to the film, TV, games, and commercial communities.

As part of our strategy, we acquired Notorious DIT to support our growth plans and build on seamless workflow from onset DIT, lab, dailies grading and 4K screening through transcoding for editorial and dailies review and VFX pulls to automated services including SAN and LTO archiving.

The Molinare Creative Group is now home to Notorious DIT, Molinare TV & Film, Voice, Sound Warriors and Pip Studios. Together, we provide an end-to-end solution to our clients, including dailies and DIT services, offline services, full creative post production, QC, mastering, foley, sound design, field records, casting, ADR, voice over, performance capture and localisation.

2023 presented significant challenges due to the actors and writers strike in the U.S. along with a general commissioning slowdown in the UK. By August, financial performance was substantially below expectations, leading the directors to the difficult decision of implementing redundancies.

Boasting a multi award-winning team of creatives, the sharpest minds in technology and an unparalleled team of producers, we bring filmmakers stories to life. With state of the art facilities in Central London, Bedfordshire and Reading, we strive to constantly stay on the cutting edge of technology, collaborating with fellow disruptors to enable the creatives to stay creative.

As an employer, Molinare is proud to highlight a remarkable achievement: our recognition as a Broadcast Best Place to Work. Securing this award during such a turbulent period is a testament to the resilience and dedication of our staff. This recognition serves as a powerful reminder of the strength of our workplace community and the importance of maintaining a supportive and inclusive environment, even in the face of adversity.

Principal risks and uncertainties

The Directors consider the key risks and uncertainties to be:

Future developments

The continued development of Molinare Creative Group. This will give us the platform to support an end-to-end media business across all genres, from DIT and Dailies services, Offline Editorial, Finishing Post, QC/Deliverables into full Localisation Services. Over the next 12-months the develop of cutting-edge technology and implementation of Ai and machine learning to improve efficiencies and workflow to streamline process.

 

Molinare TV & Film Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 2
Financial Performance

The financial performance of the Company began strongly in 2023 and remained EBITDA positive until Q4. As the year progressed, the industry faced significant challenges due to the Actors and Writers strike and general commissioning slowdown in the UK. Molinare’s diverse offering and acquisition of Notorious DIT helped maintain some resilience, but revenues finished £0.8m down vs 2022. This slowdown, combined with £0.6m of increases in property and utility costs, resulted in Molinare ending the year with an EBITDA loss of £0.5m.

In 2023, the Company also incurred financial costs to execute a series of debt-to-equity conversions which has resulted in £15,335,687 of other loans being capitalised. Together with a share issue, which resulted in a capital injection of £1,000,000, the Company had net assets of £3,970,754 as at 31 December 2023 which is a significant improvement compared to prior years (2022: £9,838,706 net liabilities).

Scope and objectives

 

 

Key performance indicators

The group manages its operating and financial performances using several Key Performance Indicators. The most important of which, for the year ended 31 December 2023, are as follows:

 

2023

2022

Turnover (£’000)

£16,106

£16,858

Gross Margin

50.3%

55.1%

Operating Turnover/Employee (£’000)

103

95

 

On behalf of the board

N Bennett
Director
16 October 2024
Molinare TV & Film Limited
Directors' Report
For the year ended 31 December 2023
Page 3

The directors present their annual report and financial statements for the year ended 31 December 2023. The results for the current year comprise consolidated results and are therefore not entirely comparable with those of the prior year, which consist solely of those for the Company.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

R MacKenzie
J Woodward
N Bennett
Results and dividends

The results for the year are set out on page 10.

 

The current year comprises of consolidated results, as a result of an acquisition in the year. Prior to this, the Company was not part of a group, therefore the prior year results are that of the Company only.

No ordinary or preference dividends were paid. The directors do not recommend payment of a final dividend.

Auditor

In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the group will be put at a General Meeting.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
N Bennett
Director
16 October 2024
Molinare TV & Film Limited
Directors' Responsibilities Statement
For the year ended 31 December 2023
Page 4

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Molinare TV & Film Limited
Independent Auditor's Report
To the Members of Molinare TV & Film Limited
Page 5
Opinion

We have audited the financial statements of Molinare TV & Film Limited (‘the parent company’) and its subsidiary for the year ended 31 December 2023 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows 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 FRS 102 ‘The Financial Reporting Standard Applicable in the UK and Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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 group and parent 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 group's and parent 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.

Other information

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.

Molinare TV & Film Limited
Independent Auditor's Report (Continued)
To the Members of Molinare TV & Film Limited
Page 6

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

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 group's and parent 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 group or parent company or to cease operations, or have no realistic alternative but to do so.

Molinare TV & Film Limited
Independent Auditor's Report (Continued)
To the Members of Molinare TV & Film Limited
Page 7
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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

Molinare TV & Film Limited
Independent Auditor's Report (Continued)
To the Members of Molinare TV & Film Limited
Page 8

Explanation as to what extent the audit was considered capable of detecting irregularities, including

fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud is detailed below.

 

The objectives of our audit in respect of 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 to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

 

Our approach was as follows:

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Molinare TV & Film Limited
Independent Auditor's Report (Continued)
To the Members of Molinare TV & Film Limited
Page 9

Use of our 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 for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.

Gary De Souza (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
17 October 2024
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Molinare TV & Film Limited
Group Statement of Comprehensive Income
For the year ended 31 December 2023
Page 10
2023
2022
Notes
£
£
Turnover
3
16,105,724
16,858,403
Cost of sales
(8,010,475)
(7,565,694)
Gross profit
8,095,249
9,292,709
Administrative expenses
(9,871,700)
(8,767,336)
Other operating income
225
17,290
Exceptional items
4
(120,927)
(217,052)
Operating (loss)/profit
5
(1,897,153)
325,611
Interest receivable and similar income
5,464
505
Interest payable and similar expenses
9
(708,527)
(909,089)
Loss before taxation
(2,600,216)
(582,973)
Tax on loss
10
-
0
-
0
Loss for the financial year
(2,600,216)
(582,973)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.

The Consolidated Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.

Molinare TV & Film Limited
Group Balance Sheet
As at 31 December 2023
Page 11
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
340,302
-
0
Other intangible assets
11
48,951
68,009
Total intangible assets
389,253
68,009
Tangible assets
12
3,360,904
3,608,669
3,750,157
3,676,678
Current assets
Debtors
16
3,786,061
3,639,041
Cash at bank and in hand
942,188
1,114,719
4,728,249
4,753,760
Creditors: amounts falling due within one year
17
(4,074,694)
(17,652,620)
Net current assets/(liabilities)
653,555
(12,898,860)
Total assets less current liabilities
4,403,712
(9,222,182)
Creditors: amounts falling due after more than one year
18
(505,945)
(616,524)
Net assets/(liabilities)
3,897,767
(9,838,706)
Capital and reserves
Called up share capital
23
19,699,500
250,691
Share premium account
3,533,678
4,379,562
Equity reserve
-
0
1,494,751
Profit and loss reserves
(19,335,411)
(15,963,710)
Total equity
3,897,767
(9,838,706)
The financial statements were approved by the board of directors and authorised for issue on 16 October 2024 and are signed on its behalf by:
16 October 2024
N Bennett
Director
Molinare TV & Film Limited
Company Balance Sheet
As at 31 December 2023
31 December 2023
Page 12
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
48,951
68,009
Tangible assets
12
3,077,873
3,608,669
Investments
13
250,000
-
0
3,376,824
3,676,678
Current assets
Debtors
16
3,945,847
3,639,041
Cash at bank and in hand
938,949
1,114,719
4,884,796
4,753,760
Creditors: amounts falling due within one year
17
(3,831,388)
(17,652,620)
Net current assets/(liabilities)
1,053,408
(12,898,860)
Total assets less current liabilities
4,430,232
(9,222,182)
Creditors: amounts falling due after more than one year
18
(459,478)
(616,524)
Net assets/(liabilities)
3,970,754
(9,838,706)
Capital and reserves
Called up share capital
23
19,699,500
250,691
Share premium account
3,533,678
4,379,562
Equity reserve
-
0
1,494,751
Profit and loss reserves
(19,262,424)
(15,963,710)
Total equity
3,970,754
(9,838,706)

As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The Company made a loss in the year of £2,647,229 (2022 - £582,973).

The financial statements were approved by the board of directors and authorised for issue on 16 October 2024 and are signed on its behalf by:
16 October 2024
N Bennett
Director
Company Registration No. 08066696 (England and Wales)
Molinare TV & Film Limited
Group Statement of Cash Flows
For the year ended 31 December 2023
Page 13
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
28
(1,291,013)
293,653
Interest paid
(143,859)
(62,069)
Net cash (outflow)/inflow from operating activities
(1,434,872)
231,584
Investing activities
Cost of acquiring subsidiary
(249,148)
-
Cash acquired with subsidiary
4,990
-
Purchase of intangible assets
(14,744)
(49,395)
Purchase of tangible fixed assets
(568,078)
(1,280,878)
Interest received
5,464
505
Net cash used in investing activities
(821,516)
(1,329,768)
Financing activities
Proceeds from issue of shares
1,000,001
-
Proceeds from borrowings
1,513,905
-
Repayment of borrowings
(131,025)
-
Payment of finance lease obligations
(302,893)
(258,712)
Net cash generated from/(used in) financing activities
2,079,988
(258,712)
Net decrease in cash and cash equivalents
(176,400)
(1,356,896)
Cash and cash equivalents at beginning of year
1,114,719
2,471,615
Cash and cash equivalents at end of year
938,319
1,114,719
Relating to:
Cash at bank and in hand
942,188
1,114,719
Bank overdrafts included in creditors payable within one year
(3,869)
-
Molinare TV & Film Limited
Group Statement of Changes in Equity
For the year ended 31 December 2023
Page 14
Share capital
Share premium account
Equity reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
250,691
4,379,562
1,494,751
(15,380,737)
(9,255,733)
Year ended 31 December 2022:
Loss and total comprehensive loss for the year
-
-
-
(582,973)
(582,973)
Balance at 31 December 2022
250,691
4,379,562
1,494,751
(15,963,710)
(9,838,706)
Year ended 31 December 2023:
Loss and total comprehensive loss for the year
-
-
-
(2,600,216)
(2,600,216)
Issue of share capital
23
1,000,691
-
0
-
-
1,000,691
Bonus issue of shares
23
1,587,466
(1,587,466)
-
-
0
1,587,466
Conversion of convertible loan
20
5,989,808
-
(1,494,751)
(771,485)
(1,494,751)
Conversion of loan to shares
23
10,871,534
741,582
-
0
-
16,015,458
Reduction of shares
23
(690)
-
-
-
(690)
Balance at 31 December 2023
19,699,500
3,533,678
-
0
(19,335,411)
3,897,767
Molinare TV & Film Limited
Company Statement of Changes in Equity
For the year ended 31 December 2023
Page 15
Share capital
Share premium account
Equity reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
250,691
4,379,562
1,494,751
(15,380,737)
(9,255,733)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(582,973)
(582,973)
Balance at 31 December 2022
250,691
4,379,562
1,494,751
(15,963,710)
(9,838,706)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
-
(2,527,229)
(2,527,229)
Issue of share capital
23
1,000,691
-
0
-
-
1,000,691
Bonus issue of shares
23
1,587,466
(1,587,466)
-
-
0
1,587,466
Conversion of convertible loan
20
5,989,808
-
(1,494,751)
(771,485)
(1,494,751)
Conversion of loan to shares
23
10,871,534
741,582
-
0
-
16,015,458
Reduction of shares
23
(690)
-
-
-
(690)
Balance at 31 December 2023
19,699,500
3,533,678
-
0
(19,262,424)
3,970,754
Molinare TV & Film Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 16
1
Accounting policies
Company information

Molinare TV & Film Limited (“the Company”) is a limited company domiciled and incorporated in England and Wales. The registered office is 34 Fouberts Place, London, W1F 7PX.

 

The Group consists of Molinare TV & Film Limited and its subsidiary company, Notorious DIT Limited.

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.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The 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 for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated financial statements incorporate those of Molinare TV & Film Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 17
1.3
Going concern

The group has made a loss of £2,600,216 (2022: £582,973) in the year and had net assets of £3,897,767 (2022: £9,838,706 net liabilities) and cash reserves of £942,188 at 31 December 2023 (2022: £1,114,719).

 

The company has made a loss of £2,527,229 (2022: £582,973) in the year and had net assets of £3,970,754 (2022: £9,838,706 net liabilities) and cash reserves of £938,949  at 31 December 2023 (2022: £1,114,719).

 

During the financial year, £15,336,687 of other loans were capitalised as part of a series of debt-to-equity conversions and there was a £1,000,000 capital injection arising from a share issue. Furthermore, the company secured an additional credit facility of £1,000,000 in May 2024 of which £500,000 has since been drawn down.

 

The directors have prepared projections and cash flow forecasts for a period of 12 months from the date of approval of these financial statements which indicate that, the company will continue to trade and generate cash from trading in 2024 and 2025. The directors continue to monitor the business performance, and in the event income is impacted significantly they will consider cost cutting measures in order to ensure the long term viability of the business.

 

Consequently, the directors are confident that between the existing financing facilities and the current cash generated from operations the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for 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 is recognised as contract activity progresses, so that for incomplete contracts, it reflects the partial performance of the contractual obligations. For such contracts, the amount of revenue recognised in the profit and loss account is calculated by reference to the value of work performed.

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 18
1.6
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Software
Straight line over the license length
1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
Straight line over the period of the lease
Plant and equipment
5 years straight line
Fixtures and fittings
3 years straight line
Computers
3 years straight line
Motor vehicles
3 years 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 recognised in the profit and loss account.

1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 19

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

1.9
Cash at bank and in hand

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.

1.10
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

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.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 20
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 group 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 group 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.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 21
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.

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 group after deducting all of its liabilities.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

Equity instruments issued by the group 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 group.

1.12
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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 22

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 leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.15
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.16
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.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 23
2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

Useful economic life of intangibles (excluding goodwill)

The annual amortisation charge for intangible assets is sensitive to changes in the estimated lives and residual values of the assets.

Useful economic life of tangible fixed assets

The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 12 for the carrying amount of the tangible fixed assets and the accounting policies for the useful economic lives for each class of asset.

Debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 15 for the net carrying amount of the debtors and associated impairment provision.

Revenue Recognition

Revenue from contracts is assessed on an individual basis with revenue earned being ascertained based on the stage of completion of the contract which is estimated using a combination of the milestones in the contract and the time spent to date compared to the total time expected to be required to undertake the contract. Estimates of the total time required to undertake the contracts are made on a regular basis and subject to management review. These estimates may differ from the actual results due to a variety of factors such as efficiency of working, accuracy of assessment of progress to date and client decision making.

Intercompany loans

The Company has advanced £181k in loans to its subsidiary. These loans are unsecured, interest-free, and repayable on demand. The Company has assessed the recoverability of these loans at the balance sheet date and considers them to be fully recoverable based on the future trading potential of the subsidiary.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
Page 24
Indicators of impairment

Management has deemed no impairments to the investments and goodwill necessary, due to their being no significant changes in the business environment or value of the assets purchased. The group are benefiting from the added Brand value and the synergies of working together.

Amortisaton of goodwill

The useful economic life of goodwill is based a number of factors including competitive environment, technological advances and intellectual property, customer perception and loyalty and many other factors that were all considered when investing in the subsidiary. The useful economic lives and residual values are re-assessed annually. Goodwill impairment reviews are also performed annually. See note 11 for the carrying amount of the goodwill and 1.6 for the useful economic life of goodwill.

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Post production
16,091,633
16,803,593
Other
14,091
54,810
16,105,724
16,858,403
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
16,105,724
16,858,403
2023
2022
£
£
Other revenue
Interest income
5,464
505
Grants received
-
17,290
Rental income
225
-
4
Exceptional item
2023
2022
£
£
Expenditure
Dilapidations provision
-
101,429
Redundancy costs
120,927
115,623
120,927
217,052
Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 25
5
Operating (loss)/profit
2023
2022
£
£
Operating (loss)/profit for the year is stated after charging/(crediting):
Exchange losses
1,028
617
Government grants
-
(17,290)
Depreciation of owned tangible fixed assets
1,026,919
819,676
Depreciation of tangible fixed assets held under finance leases
189,148
168,168
Amortisation of intangible assets
41,260
100,888
Operating lease charges
2,224,961
2,096,566
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
62,500
46,084
7
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
169
171
169
171

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
7,147,203
6,633,291
7,110,495
6,633,291
Social security costs
744,825
695,475
744,825
695,475
Pension costs
157,450
149,825
157,450
149,825
8,049,478
7,478,591
8,012,770
7,478,591
Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 26
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
178,271
164,789
Company pension contributions to defined contribution schemes
9,800
5,293
Sums paid to third parties for directors' services
39,620
66,688
227,691
236,770

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022: 1).

 

There is only one director remunerated through the company and therefore the highest paid director information is disclosed above.

9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
87,359
13,703
Interest on finance leases and hire purchase contracts
56,501
48,386
Other interest
564,667
847,000
Total finance costs
708,527
909,089
Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 27
10
Taxation

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(2,600,216)
(582,973)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(650,054)
(110,765)
Tax effect of expenses that are not deductible in determining taxable profit
91,150
11,765
Unutilised tax losses carried forward
414,812
133,480
Permanent capital allowances in excess of depreciation
144,092
(53,770)
Capital allowances
-
0
19,290
Taxation charge
-
-

 

11
Intangible fixed assets
Group
Goodwill
Software
Total
£
£
£
Cost
At 1 January 2023
1,000,579
304,114
1,304,693
Additions
347,761
14,744
362,505
Disposals
-
0
(181,355)
(181,355)
At 31 December 2023
1,348,340
137,503
1,485,843
Amortisation and impairment
At 1 January 2023
1,000,579
236,105
1,236,684
Amortisation charged for the year
7,459
33,801
41,260
Disposals
-
0
(181,354)
(181,354)
At 31 December 2023
1,008,038
88,552
1,096,590
Carrying amount
At 31 December 2023
340,302
48,951
389,253
At 31 December 2022
-
0
68,009
68,009
Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
11
Intangible fixed assets
(Continued)
Page 28
Company
Goodwill
Software
Total
£
£
£
Cost
At 1 January 2023
1,000,579
304,114
1,304,693
Additions
-
0
14,744
14,744
Disposals
-
0
(181,355)
(181,355)
At 31 December 2023
1,000,579
137,503
1,138,082
Amortisation and impairment
At 1 January 2023
1,000,579
236,105
1,236,684
Amortisation charged for the year
-
0
33,801
33,801
Disposals
-
0
(181,354)
(181,354)
At 31 December 2023
1,000,579
88,552
1,089,131
Carrying amount
At 31 December 2023
-
0
48,951
48,951
At 31 December 2022
-
0
68,009
68,009
Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 29
12
Tangible fixed assets
Group
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
2,873,578
5,665,712
427,657
638,193
-
0
9,605,140
Additions
126,751
385,396
79,886
80,902
-
0
672,935
Business combinations
1,733
170,925
17,393
38,207
67,143
295,401
Disposals
(50,533)
(2,541,624)
(179,297)
(318,804)
-
0
(3,090,258)
At 31 December 2023
2,951,529
3,680,409
345,639
438,498
67,143
7,483,218
Depreciation and impairment
At 1 January 2023
1,604,958
3,693,132
245,197
453,184
-
0
5,996,471
Depreciation charged in the year
458,739
546,364
100,264
105,972
4,728
1,216,067
Eliminated in respect of disposals
(50,528)
(2,541,601)
(179,293)
(318,802)
-
0
(3,090,224)
At 31 December 2023
2,013,169
1,697,895
166,168
240,354
4,728
4,122,314
Carrying amount
At 31 December 2023
938,360
1,982,514
179,471
198,144
62,415
3,360,904
At 31 December 2022
1,268,619
1,972,580
182,460
185,009
-
0
3,608,669
Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 30
Company
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 1 January 2023
2,873,578
5,665,712
427,657
638,193
9,605,140
Additions
126,751
385,396
79,886
80,902
672,935
Disposals
(50,533)
(2,541,624)
(179,297)
(318,804)
(3,090,258)
At 31 December 2023
2,949,796
3,509,484
328,246
400,291
7,187,817
Depreciation and impairment
At 1 January 2023
1,604,958
3,693,132
245,197
453,184
5,996,471
Depreciation charged in the year
458,266
546,364
98,070
100,997
1,203,697
Eliminated in respect of disposals
(50,528)
(2,541,601)
(179,293)
(318,802)
(3,090,224)
At 31 December 2023
2,012,696
1,697,895
163,974
235,379
4,109,944
Carrying amount
At 31 December 2023
937,100
1,811,589
164,272
164,912
3,077,873
At 31 December 2022
1,268,619
1,972,579
182,462
185,009
3,608,669

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
733,459
755,997
666,381
755,997
733,459
755,997
666,381
755,997
Depreciation charge for the year in respect of leased assets
195,452
168,168
195,452
168,168
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
250,000
-
0
Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
13
Fixed asset investments
(Continued)
Page 31
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
-
Additions
250,000
At 31 December 2023
250,000
Carrying amount
At 31 December 2023
250,000
At 31 December 2022
-
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
Notorious DIT Ltd
1
Digital imaging technology services
Ordinary Shares
100.00
0

Registered office:

 

1: Unit 12 Brockley Cross Business Centre 96 Endwell Road, London, SE4 2PD

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 32
15
Acquisition of a business

On 2 October 2023 the group acquired 100 percent of the issued capital of Notorious DIT Limited.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Tangible fixed assets
306,559
-
306,559
Debtors
55,946
-
55,946
Cash and cash equivalents
4,989
-
4,989
(11,292)
-
(11,292)
Obligations under finance lease
(66,685)
-
(66,685)
Creditors
(387,278)
-
(387,278)
Total identifiable net assets
(97,761)
-
(97,761)
Goodwill
347,761
Total consideration
250,000
The consideration was satisfied by:
£
Cash
250,000
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
71,377
Loss after tax
(111,691)
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,646,363
1,603,379
1,632,014
1,603,379
Amounts owed by group undertakings
-
-
181,695
-
Other debtors
820,881
690,349
813,321
690,349
Prepayments and accrued income
1,318,817
1,345,313
1,318,817
1,345,313
3,786,061
3,639,041
3,945,847
3,639,041

There are £12.2m (2022: £10.5m) of losses carried forward upon which there is no deferred tax asset recognised.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 33
17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
323,289
225,000
313,062
225,000
Obligations under finance leases
21
283,873
258,973
269,695
258,973
Other borrowings
19
1,013,905
14,514,831
1,013,905
14,514,831
Trade creditors
829,598
1,056,395
829,598
1,056,395
Other taxation and social security
609,814
445,268
395,326
445,268
Other creditors
211,333
81,347
208,520
81,347
Accruals and deferred income
802,882
1,070,806
801,282
1,070,806
4,074,694
17,652,620
3,831,388
17,652,620

Included within bank loans and overdrafts is a loan from a third party debt provider,

18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
285,847
-
0
285,847
-
0
Obligations under finance leases
21
220,098
376,349
173,631
376,349
Other creditors
-
0
240,175
-
0
240,175
505,945
616,524
459,478
616,524
19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
605,267
225,000
595,040
225,000
Bank overdrafts
3,869
-
0
3,869
-
0
Other loans
1,013,905
14,514,831
1,013,905
14,514,831
1,623,041
14,739,831
1,612,814
14,739,831
Payable within one year
1,337,194
14,739,831
1,326,967
14,739,831
Payable after one year
285,847
-
0
285,847
-
0
Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
19
Loans and overdrafts
(Continued)
Page 34

Included within other loans are amounts totalling £nil (2022: £4,252,625) due in respect of financing activities for which a fixed and floating charge were given over the tangible fixed assets of the Company. The shareholder loans included within other loans were secured and accrue interest at rates between 10% and 15% per annum.    

 

In September 2023, £11,613,115 of other loans were converted to Ordinary shares. See note 23 for further details.

20
Convertible loan notes
Group
Company
2023
2022
2023
2022
£
£
£
£
Liability component of convertible loan notes
-
2,505,250
-
2,505,250

The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at the date of issue and the amount reported in the Balance Sheet represents the effective interest rate less interest paid to that date.

The convertible loan notes were converted to equity in the year. See note 23 for further information.

21
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
283,873
258,974
269,695
258,974
In two to five years
220,098
376,348
173,631
376,348
503,971
635,322
443,326
635,322

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
157,450
149,825

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 35
23
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of 1p each
1,969,950,000
25,000,100
19,699,500
250,001
A Preferred Ordinary Shares of 1p each
-
35,000
-
350
B Preferred Ordinary Shares of 1p each
-
5,000
-
50
C Preferred Ordinary Shares of 1p each
-
1,800
-
18
Ordinary Non-Voting Shares of 1p each
-
25,226
-
252
D Preferred Ordinary Shares of 1p each
-
2,000
-
20
1,969,950,000
25,069,126
19,699,500
250,691
In September 2023, the company recevied a cash injection from one of the shareholder of £1,000,000 in exchange for issuing  of Ordinary shares.

In September 2023, the company underwent a restructuring of the balance sheet whereby all shareholder loans including redemption premium and accrued interest were converted to Ordinary shares. The convertible loan along with the redemption premium and accrued interest was also converted to Ordinary shares. In addition, there was a bonus issue of shares along with the redesignation of the Ordinary Non-Voting shares to Ordinary shares.

At the end of the year, the company only had Ordinary shares.
24
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
2,146,134
2,264,734
2,138,888
2,264,734
Between two and five years
3,600,997
5,597,894
3,600,997
5,597,894
5,747,131
7,862,628
5,739,885
7,862,628
Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 36
25
Related party transactions

Next Wave Partners 1C LP are shareholders of the Company. Next Wave Partners LLP acts as a manager of this entity. R Mackenzie is a member of Next Wave Partners LLP. Next Wave Partners LLP charged a fee of £44,260(2022: £20,021) for the services of directors for the year.

 

At the year end, the company owed Next Wave Partners 1C LP £nil (2022: £7,217,625). £2,000,000 of the funding was in the form of a convertible loan, the equity element of this loan was calculated to be £747,375. Up to September 2023, interest of £332,187 (2022: £498,500) was accrued on the loans and £2,945,461 of interest was converted along with the principal loan into Ordinary shares.

 

Saphir Capital Investment Fund SA SICAV-SIF were shareholders of the Company in the year. Saphir Capital Partners UK Limited, a subsidiary of Saphir Capital Partner SA, act as a manager of this entity. D Polunina is a member of Saphir Capital Partners UK Limited. Saphir Capital Private Equity Fund charged a fee of £nil (2022: £20,000) for the services of directors for the year. At the balance sheet date £nil (2022: £120,000) was outstanding and included in trade creditors.

 

During the year, interest of £125,667 (2022: £188,500) was accrued on the loans. In September the principal loan of £2,965,000 and accrued interest to date of £1,057,068 was transferred to Next Wave Partners 1C LP. Shortly after the transfer of the loan to Next Wave Partners 1C LP, this amount was then converted into Ordinary shares.

 

At the year-end the company was owed £69,665 (2022: £105,125) by Pip Studios Limited, a related party by virtue of common control, having received £25,850 (2022: £19,440) of services in the year.

 

During the year, purchases of £67,172 (2022: £nil) were made from N J Gathard and Sons, a company controlled by a close family member of a key management personnel.

 

No guarantees have been given or received by the Company.

 

26
Events after the reporting date

Post year end, the company received a further £1,000,000 unsecured credit facility from one of its shareholders. Interest will be charged on amounts drawn down at 7% per annum. As at the date of signing, £500,000 of this facility had been drawn down.

 

Post year end, the denomination of the shares Ordinary shares changed from £0.01 to £10.

27
Controlling party

There was a change in controlling party in the year as a result of the restructuring which is discussed further in note 23. The ultimate controlling party changed to Next Wave Partners LLP on completion of the restructuring.

Molinare TV & Film Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 37
28
Cash (absorbed by)/generated from group operations
2023
2022
£
£
Loss for the year after tax
(2,600,216)
(582,973)
Adjustments for:
Finance costs
708,527
909,070
Investment income
(5,464)
(505)
Loss on disposal of tangible fixed assets
35
-
Amortisation and impairment of intangible assets
41,260
100,888
Depreciation and impairment of tangible fixed assets
1,216,067
987,844
Movements in working capital:
Increase in debtors
(79,916)
(125,508)
Decrease in creditors
(571,306)
(995,163)
Cash (absorbed by)/generated from operations
(1,291,013)
293,653
29
Analysis of changes in net debt - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,114,719
(172,531)
942,188
Bank overdrafts
-
0
(3,869)
(3,869)
1,114,719
(176,400)
938,319
Borrowings excluding overdrafts
(14,739,831)
13,120,659
(1,619,172)
Obligations under finance leases
(635,322)
131,351
(503,971)
(14,260,434)
13,075,610
(1,184,824)
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