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Registration number: 03119408

The Empire Design Company Limited

Financial Statements

for the Year Ended 31 December 2023

Brebners
Chartered Accountants & Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

 

The Empire Design Company Limited

Contents

Company Information

1

Statement of Financial Position

2

Notes to the Financial Statements

3 to 10

 

The Empire Design Company Limited

Company Information

Director

S C Burdge

Registered office

130 Shaftesbury Avenue
2nd Floor
London
W1D 5EU

Auditor

Brebners
Chartered Accountants & Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

 

The Empire Design Company Limited

Statement of Financial Position as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

5

145,213

170,477

Investments

6

14,284

14,284

 

159,497

184,761

Current assets

 

Debtors

7

10,037,380

9,582,280

Cash at bank and in hand

 

1,349

62,812

 

10,038,729

9,645,092

Creditors: Amounts falling due within one year

8

(4,818,115)

(4,379,372)

Net current assets

 

5,220,614

5,265,720

Total assets less current liabilities

 

5,380,111

5,450,481

Creditors: Amounts falling due after more than one year

8

(25,034)

(26,528)

Provisions for liabilities

9

1,000

(124,491)

Net assets

 

5,356,077

5,299,462

Capital and reserves

 

Called up share capital

40,816

40,816

Share premium reserve

5,639

5,639

Profit and loss account

5,309,622

5,253,007

Total equity

 

5,356,077

5,299,462

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006 and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Statement of Income and Retained Earnings has been taken.

Approved and authorised by the director on 29 January 2025
 

.........................................

S C Burdge

Director

Company registration number: 03119408

 

The Empire Design Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The address of its registered office is:
130 Shaftesbury Avenue
2nd Floor
London
W1D 5EU

The principal activity of the company continued to be that of a creative film design agency.

2

Audit Report

The Independent Auditor's Report was unqualified. The name of the Senior Statutory Auditor who signed the audit report on 30 January 2025 was John Chamberlain, who signed for and on behalf of Brebners.

3

Accounting policies

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention and are presented in sterling, which is the functional currency of the entity.

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Going concern

During the year the company remained profitable and at the year end date the company had net assets of £5,356,077.

The group operates in a sector where, although overall activity has reduced, its services remain in demand and the director is optimistic that this demand will increase as the film industry continues to recover.

Unaudited management forecasts show that the trade of the group, of which the company is a member, has improved significantly in the year to 31 December 2024 with a positive EBITDA in the period since the year end and, based on unaudited forecasts, the director is confident that the company and the group will trade profitably in the year to 31 December 2025 and beyond. In addition, it is noted that since the year end, the group has identified and implemented significant cost savings within rent and other administrative expenses and have taken steps to ensure cash flows are managed in various scenarios.

 

The Empire Design Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

The group's working capital requirements are currently met via a combination of trade creditors, bank facilities, hire purchase, other creditors, and funds from related undertakings, in respect of which the company has provided certain cross-guarantees. Within group loans and borrowings due within one year of the year end are balances amounting to £4,566,968, comprised of an overdraft balance amounting to £425,609 and mortgage and loan balances totalling £4,141,359, which are technically repayable on demand. In addition within group creditors due within one year are material balances due to HMRC which are also technically repayable on demand. As such, there is uncertainty regarding the group’s ability to meet its liabilities as they fall due. However, the director and management team have produced cash flow forecasts which show these loan and HMRC liabilities being repaid over the period to December 2025. The director believes that the current bank facilities will remain until new banking facilities are in place. The director and management team have been exploring refinancing the investment property held by the group and valued at £6,514,800 at the year end and have been in talks with financial institutions in connection therewith. The director also believes that in the worst case scenario, the group has significant assets that could be realised in order to repay these debts.

On the basis of the above, and after making enquires and taking into account the combination of those circumstances outlined above, the director believes he has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the director continues to adopt the going concern basis in preparing the financial statements.

Consolidation

In the opinion of the directors, the company and its subsidiary undertaking comprise a small group. The company has therefore taken advantage of the exemption provided by Section 399 of the Companies Act 2006 not to prepare group accounts, and hence the accounts represent information about the company as an individual undertaking and not about the group.

Revenue recognition

Turnover is the amounts receivable for services provided and is stated net of VAT.

Revenues from design services are normally recognised as services are performed, on a time basis when the company has a right to consideration. Occasionally design services are sold on a fixed price basis, and under these circumstances revenue is recognised according to the percentage of work performed.

If circumstances arise that may change the original estimates of revenues or extent of progress towards completion, estimates are revised. These revisions may result in increases or decreases in estimated revenues and are reflected in income in the period in which the circumstances that gave rise to the revision become known by management.

Government grants

Government grants are recognised when it is reasonable to expect that the grants will be received and that all related conditions will be met, usually on submission of a valid claim for payment.

Grants of a revenue nature are credited to income so as to match them with the expenditure to which they relate.

Tax

The tax expense for the period comprises deferred tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

 

The Empire Design Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Leasehold property

Over the term of the lease

Computer equipment

20% straight line

Fixtures and fittings

25% straight line

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, as estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

Investments

Investments in equity shares which are not publicly traded and other investments where fair value cannot be measured reliably are measured at cost less impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Hire purchase agreements

Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at cost. The asset is then depreciated over its useful life. Future payments are apportioned between finance costs in the income statement and reduction of the liability so as to achieve a constant periodic rate of interest on the remaining balance of the liability using the effective interest method.

 

The Empire Design Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Provisions

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Operating leases and finance leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation.

Lease payments are apportioned between finance costs in the Income Statement and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Operating lease income is recognised in profit or loss on a straight line basis over the lease term. The aggregate cost of lease incentives are recognised as a reduction to income over the lease term on a straight line basis. Costs, including depreciation, incurred in earning the lease income are recognised as an expense. Any initial direct costs incurred in negotiating and arranging the operating lease are added to the carrying amount of the lease and recognised as an expense over the lease term on the same basis as the lease income.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

4

Staff numbers

The average number of persons employed by the company during the year, was 36 (2022 - 36).

 

The Empire Design Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

5

Tangible assets

Leasehold property
£

Computer equipment
£

Fixtures and fittings
£

Total
£

Cost or valuation

At 1 January 2023

55,118

508,023

277,256

840,397

Additions

-

46,853

444

47,297

At 31 December 2023

55,118

554,876

277,700

887,694

Depreciation

At 1 January 2023

41,378

399,605

228,937

669,920

Charge for the year

5,469

58,308

8,784

72,561

At 31 December 2023

46,847

457,913

237,721

742,481

Carrying amount

At 31 December 2023

8,271

96,963

39,979

145,213

At 31 December 2022

13,740

108,418

48,319

170,477

 

The Empire Design Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

6

Investments

2023
£

2022
£

Investments in subsidiaries

2

2

Artwork

14,282

14,282

14,284

14,284

Subsidiaries

£

Cost

At 1 January 2023 and 31 December 2023

2

Impairment

At 1 January 2023 and 31 December 2023

-

Carrying amount

At 31 December 2023

2

At 31 December 2022

2

Artwork

£

Cost

At 1 January 2023 and 31 December 2023

14,282

Impairment

At 1 January 2023 and 31 December 2023

-

Carrying amount

At 31 December 2023

14,282

At 31 December 2022

14,282

7

Debtors

Note

2023
£

2022
£

Trade debtors

 

487,921

676,933

Amounts owed by group undertakings

12

8,803,117

8,091,792

Other debtors

 

746,342

813,555

 

10,037,380

9,582,280

 

The Empire Design Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

8

Creditors

Creditors: amounts falling due within one year

2023
£

2022
£

Loans and borrowings

453,769

470,184

Trade creditors

413,967

282,507

Taxation and social security

1,218,120

883,203

Other creditors

2,732,259

2,743,478

4,818,115

4,379,372


Included within loans and borrowings are bank overdrafts of £425,609 (2022 - £446,643) which are secured by a fixed and floating charge over the assets of the company.

Also included within loans and borrowings are liabilities under hire purchase and finance lease agreements amounting to £28,160 (2022 - £23,541) which are secured on the assets concerned.

Creditors: amounts falling due after more than one year

Note

2023
£

2022
£

Loans and borrowings

10

25,034

26,528


Included within loans and borrowings are liabilities under hire purchase and finance lease agreements amounting to £25,034 (2022 - £26,528) which are secured on the assets concerned.

9

Deferred tax and other provisions

Deferred tax
£

Dilapidations provisions
£

Total
£

At 1 January 2023

11,522

112,969

124,491

Increase (decrease) in existing provisions

(12,522)

(112,969)

(125,491)

At 31 December 2023

(1,000)

-

(1,000)

 

The Empire Design Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

10

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

Bank overdrafts

425,609

446,643

Finance lease and hire purchase agreements

28,160

23,541

453,769

470,184


 

2023
£

2022
£

Non-current loans and borrowings

Finance lease and hire purchase agreements

25,034

26,528

11

Financial commitments, guarantees, and contingencies

The total amount of financial commitments, guarantees, and contingencies not included in the statement of financial position is £6,436,513 (2022 - £7,179,924), including lease commitments of £1,423,472 (2022 - £1,693,625), bank cross guarantees of £4,141,359 (2022 - £4,070,601), supplier cross guarantees of £510,000 (2022 - £1,255,562) and VAT cross guarantees totalling £361,682 (2022 - £160,136).

12

Holding company

The parent of the largest and smallest group in which these financial statements are consolidated is The Empire Holding Company Limited, incorporated in England and Wales.

The registered address of The Empire Holding Company Limited is 130 Shaftesbury Avenue, 2nd Floor, London W1D 5EU from which these financial statements are available on request.

13

Non adjusting events after the financial period

Subsequent to the year end, interim dividends totalling £104,500 were declared and paid.