Registered number: 04975020
ELSTREE FILM STUDIOS LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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ELSTREE FILM STUDIOS LIMITED
COMPANY INFORMATION
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C Myers (appointed 1 August 2023)
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J J Newmark (appointed 1 August 2023)
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L J Mansfield (appointed 1 August 2023)
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A Aaqil (appointed 1 August 2023)
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M J C Haddow-Allen (appointed 1 August 2023)
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P F Hewitt (appointed 1 August 2023)
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P B Morris (resigned 31 July 2023)
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L J Selby (resigned 31 July 2023)
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P D Rutledge (resigned 31 July 2023)
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S Shah (resigned 31 July 2023)
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H E Webster (resigned 31 July 2023)
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C J Kane (resigned 31 July 2023)
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K E Marsh (resigned 31 July 2023)
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J J J Bennett (resigned 31 July 2023)
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S A Smith (resigned 31 July 2023)
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P J Hodgson-Jones (resigned 31 July 2023)
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M P Reeve (resigned 31 July 2023)
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Chartered Accountants & Statutory Auditor
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ELSTREE FILM STUDIOS LIMITED
CONTENTS
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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ELSTREE FILM STUDIOS LIMITED
REGISTERED NUMBER: 04975020
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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ELSTREE FILM STUDIOS LIMITED
REGISTERED NUMBER: 04975020
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2024
The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 4 to 14 form part of these financial statements.
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ELSTREE FILM STUDIOS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
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Comprehensive income for the year
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Surplus on revaluation of freehold property
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Transfer to/from profit and loss account
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Comprehensive income for the year
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The notes on pages 4 to 14 form part of these financial statements.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
The principal activity of Elstree Film Studios Limited ('the Company') is that of the provision of film and television studio space and related production and back office units for hire within the media industry.
The Company is a private company limited by shares and is incorporated in England and Wales.
The address of its registered office is Civic Offices, Elstree Way, Borehamwood, WD6 1WA.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies.
The following principal accounting policies have been applied:
The financial statements have been prepared on the going concern basis, which assumes that the Company will continue to trade for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements, and will be able to meet its debts as they fall due.
The Company reported a loss after tax for the year of £494,072 (2023: loss of £8,347,241) and had net liabilities of £(8,062,425).
The parent is Hertsmere Borough Council and the Company is dependent on the continued support of the Council to allow it to meet its financial obligations.
The directors have prepared forecasts and are confident that the Company will have the resources to meet its day to day liabilities. Since the year the Company has successfully managed to secure a loan facility of £10M from the Council and this coupled with the agreed continued support from the for at least the next 12 months from the date of signature of these accounts will be sufficient to cover all ongoing cash requirements.
Based on all of the above, the directors believe that the Company has access to adequate resources to continue being in operational existence for the foreseeable future and that it is appropriate to continue to adopt the going concern basis for the preparation of these financial statements.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Improvements to long-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
All rental income is recognised over the period to which is relates. Income arising from the recharge of costs to tenants is also recognised over the period to which the costs relate.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
The Company only enters into basic financial instruments and transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans to and from related parties
(i) Financial assets
Basic financial assets, including trade and other debtors, and amounts due from related companies, are initially recognised at transaction price, 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.
Such assets are subsequently carried at amortised cost using the effective interest method. At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Statement of Comprehensive Income.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors and accruals, 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 receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iii) Offsetting
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.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Operating leases: the Company as lessor
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Rental income from operating leases is credited to profit or loss on a straight-line basis over the lease term.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
Defined benefit pension plan
The Company previously shared in a multi-employer defined pension plan, namely the Hertfordshire
County Council Pension Fund which is availble for certain employees. A defined benefit plan defines
the pension benefit that the employee will receive on retirement, usually dependent upon several
factors including but not limited to age, length of service and remuneration. A defined benefit plan is a
pension plan that is not a defined contribution plan.
The asset recognised in the prior year on the Statement of Financial Position in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the Statement of Financial Position date less the fair value of plan assets at the same date out of which the obligations are to be settled.
This is recognised to the extent that the Company is able to recover the surplus through reduced
future contributions, which is explained further in note 13.
The defined benefit obligation is calculated using the projected unit credit method. Annually the
company engages independent actuaries to calculate the obligation. The present value is determined
by discounting the estimated future payments using market yields on high quality corporate bonds
that are denominated in sterling and that have terms approximating to the estimated period of the
future payments ('discount rate').
The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in
accordance with the Company's policy for similarly held assets. This includes the use of appropriate
valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions are charged or credited to other comprehensive income. These amounts together with
the return on plan assets, less amounts included in net interest, are disclosed as 'Actuarial gains on
defined benefit pension scheme'.
The cost of the defined benefit plan, recognised in the Statement of Comprehensive Income as
employee costs, except where included in the cost of an asset, comprises:
a) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of plan introductions, benefit changes, curtailments and settlements
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The net interest cost is calculated by applying the discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets. This cost is recognised in the Statement of
Comprehensive Income as a 'finance expense'.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a
pension plan under which the Company pays fixed contributions into a separate entity. Once the
contributions have been paid the Company has no further payment obligations. The contributions are
recognised as an expense in profit or loss when they fall due. Amounts not paid are show in accruals
as a liability in the Statement of Financial Position. The assets of the plan are held separately from
the Company in independently administered funds.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
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 income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The average monthly number of employees, including directors, during the year was 19 (2023 - 19).
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Improvemento Long-term leasehold property
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Charge for the year on owned assets
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The net book value of land and buildings may be further analysed as follows:
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Prepayments and accrued income
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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Allotted, called up and fully paid
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1 (2023 - 1) Ordinary share of £1.00
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Other reserves
The pension scheme reserve represents the net amount of unrealised gains and losses in relation to the defined benefit pension scheme as referred to in accounting policy 2.10.
This has been transferred to the profit and loss account on the termination of the pension scheme.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
During the previous financial year, it was discovered there was asbestos in some of the stages. As a result some of the stages had to be closed and were no longer operational. Customers were no longer able to use the stages and claims were issued against the Company for loss of earnings.
The Company is currently in the process of resolving claims and the process has not yet reached a conclusion.
At this stage in proceedings, the quantum of any potential claim and settlement at the conclusion of the proceedings cannot be measured reliably, and therefore no provision has been made in these accounts.
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Commitments under operating leases
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At 31 March 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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A balance of £717,742 (2023: £960,924) was owed to the parent entity at the end of the year and is included in trade creditors. A further amount of £250,000 (2023: £250,000) was owed to the parent entity at the year end and is included within other creditors due within one year. Interest of £12,500 (2023: £12,500) was paid to the parent during the year in respect of this loan. An amount of £1,650,924 (2023: £2,056,273) was also charged to the Company by the parent during the year mainly in respect of rent, rates, building insurance and health and safety costs.
A balance of £279,525 (2023: £57,760) is due from the parent entity at the year end and is included within trade debtors.
A balance of £7,730 (2023: £355,518) is due from the parent entity at the year end and is included within accrued income
A balance of £372,000 (2023: £372,000) is due from the parent entity at the year end and is included within other debtors.
A balance of £6,400,000 (2023: £6,495,538) is due to the parent entity at the year end and is included within accruals and deferred income.
During the year the Company received a management fee of £601,250 (2023: £375,157) from the parent entity.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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During the year the following remuneration, comprised of salary and benefits in kind, was paid to those members of the board who were both elected members and employees of Hertsmere Borough Council, the ultimate parent entity, for their services as directors.
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Post balance sheet events
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Since the year end, the results from a survey indicated certain stages were buit using Reinforced Autoclaved Aerated Concrete( RAAC).
As a result these stages will not available to use and there will also be a loss of revenue to the company until the issue is resolved.
As at this point it is impossible to quanitify how this issue is to be resolved and its financial effect.
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ELSTREE FILM STUDIOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
The parent entity is Hertsmere Borough Council whose principal place of business is Civic Offices, Elstree Way, Borehamwood, Hertfordshire, WD6 1WA.
Copies of the consolidated accounts of Hertsmere Borough Council may be obtained from the registered office.
The auditors' report on the financial statements for the year ended 31 March 2024 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
We draw attention to note 2.2 in the financial statements, which indicates that the Company is reliant on
its parent entity for ongoing financial support due to the significant deficit on the balance sheet. As stated
in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a
material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going
concern.
Our opinion is not modified in respect of this matter.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. Our evaluation of the directors' assessment of the Company's ability
to continue to adopt the going concern basis of accounting included reviewing and obtaining
documentation which confirmed the parent entities continued support of the business.
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The audit report was signed on 28 March 2025 by Ian Saunderson FCA (Senior Statutory Auditor) on behalf of BKL Audit LLP.
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