REGISTERED NUMBER: 03561597 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE PERIOD

29 DECEMBER 2023 TO 2 JANUARY 2025

FOR

REEL CINEMAS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

10

Statement of Income and Retained Earnings

12

Balance Sheet

13

Notes to the Financial Statements

14

DIRECTORS:

S Suri

S Suri

R Suri

REGISTERED OFFICE:

Sital House

3 - 6 Cattle Market

Loughborough

Leicestershire

LE11 3DL

REGISTERED NUMBER:

03561597 (England and Wales)

AUDITORS:

Magma Audit LLP (part of the Dains Group)

Chartered Accountants

Statutory Auditor

Unit 2, Charnwood Edge Business Park

Syston Road

Leicestershire

LE7 4UZ

The directors present their strategic report for the period 29 December 2023 to 2 January 2025.

OVERVIEW

Founded in 2001, REEL Cinemas is one of the UK's leading family-owned and independently operated cinema circuits, with 16 venues and 82 screens nationwide at the year-end, January 2025.

Our origins lie in restoring historic venues such as the Curzon in Loughborough and pioneering the "miniplex" model - purpose-built sites with 5-6 screens serving communities often overlooked by larger chains. We have expanded through a combination of new site builds, acquisitions, and partnerships with development partners and local councils to support regeneration projects, creating lasting social value by using cinemas as anchor attractions to drive footfall, strengthen local economies, and revitalise high streets and town centres.

Our approach draws on the wider group's experience as a landlord to other cinema operators, giving us valuable insight into running sustainable, successful venues, and is anchored in our commitment to be "the REEL Heart of the Community" wherever we operate.

In January 2024, we opened our newest cinema in Farnham, and we look forward to new sites in Bishop Auckland (2026) and Ashington (2027), alongside targeted investment in our existing footprint.

2024 also brought deep personal reflection with the loss of our founder - and my father - KC Suri, whose belief that business can be a force for good continues to guide everything we do:

-

Creating opportunities that open doors for individuals,

-

Enriching communities through meaningful partnerships, and

-

Delivering outstanding experiences at competitive pricing.

With his passing, I want to place on record my gratitude to all those who have worked for, and continue to work for, REEL. Our people are central to our success, especially in a hospitality business like ours. While REEL needs to evolve, we are ready - and I am confident about the road ahead.

REVIEW OF BUSINESS

This was a year of strong growth in revenues, margin improvement, and balance sheet strengthening - positioning REEL for selective expansion and targeted investment.

Key highlights for the period ended 2 January 2025 were:

-

Admissions growth: achieved double-digit gains, outpacing the UK cinema market's 2% increase.

-

Revenue growth: Turnover up 15.7% to £16.1m (2023: £13.9m).

-

Ticket & F&B performance: Ticket revenue up 23% to £9.12m (2023: £7.42m); concession revenue up 17% to £5.36m (2023: £4.58m). Total revenue per admission is over 15% higher than 2019, driven by growth in both ticket price and retail spend per head, reflecting our ability to enhance value for guests and grow revenue through product and pricing improvements.

-

Margin gains: Gross margin improved from 40.5% to 41.5%.

-

Debt reduction: CBILS loans reduced by 64.7% from £1.432m to £0.505m - on track for full repayment by August 2025.

-

Lower gearing: Gross gearing reduced from 21% to 9%.

-

Robust liquidity: REEL Cinemas continued to maintain more than £2.0m in cash funds which was more than sufficient to meet its day-to-day needs at the end of the reporting period.

-

Stronger underlying performance: The company recorded a pre-tax loss of £261,337 (2023: profit of £327,974), with the prior year's result enhanced by a one-off £1.5m pandemic-related insurance receipt. Excluding this, the underlying operating loss in 2023 was £1.17m, meaning 2024 delivered a c.78% improvement in core trading performance.

Our shareholders remain committed to reinvesting profits for long-term growth. Since 2019, we have co-invested over £20m and opened six new sites. We will continue to pursue selective expansion which is financially and operationally sustainable, informed by industry trends and lessons from over-expansion elsewhere.

CURRENT TRADING, POST BALANCE SHEET POSITION AND SUBSEQUENT EVENTS

Building on the improved operating and financial performance reported above, 2025 to date has maintained positive momentum, with admissions and food & beverage revenue both ahead of the same period last year. Family titles remain a particular strength - Minecraft and Lilo & Stitch have been standout performers, with Minecraft alone delivering more revenue than Inside Out 2, the top-grossing title in the year under review.

Operationally, we have invested in solar, automated energy-saving units, and new operational systems, alongside sensitive ticket and concession price adjustments - maintaining value for money through our popular "Movie Madness" dynamic pricing (£3-£4.99 depending on location).

During 2025 H1, we strengthened our leadership capability with the appointment of a new Head of Food & Beverage and a Head of Property, Construction & Facilities. These hires form part of a deliberate plan to deepen expertise in areas critical to guest experience, operational efficiency, and the delivery of our upcoming developments, with further strategic appointments planned.

At the time of signing this Report, REEL Cinemas is debt free, with healthy cash reserves providing a strong foundation for targeted investment and growth.

In September 2025, we completed the sale of our Ilkeston cinema (Scala) to another operator, following a review of where best to invest time and resources as part of our strategy for sustainable growth.

We are looking ahead to a strong slate in the second half of the year (2025 H2), with Zootropolis 2, Avatar: Fire and Ash, and Wicked: Part Two expected to drive significant admissions.

Our approach remains steady and realistic, balancing ambition with financial and operational discipline.

Going Concern

The Directors have assessed the financial position of the company in the normal way as part of giving consideration to the company's continued adoption of the going concern basis of accounting. This assessment reflects the company's strong cash position and minimal gearing following the repayment of CBILS at the date of signing the Report. In addition, the company prepares monthly management accounts and maintains a rolling cash flow forecast enabling the Directors to monitor performance closely, assess the impact of market developments in near real-time, and take timely actions where necessary. Based on these factors, the Directors believe that the company has formally considered and concluded that the preparation of the financial statements on a going concern basis is appropriate.

PRINCIPAL RISKS AND UNCERTAINTIES

While 2024 delivered strong results, we continue to operate in a very challenging environment that presents a number of sector-wide and business-specific risks:

-

Rising costs - Increases in NMW and NICs have significantly impacted payroll, prompting a full review of our operating model. While challenging, this is delivering efficiency gains supported by investment in technology. We are also preparing for further cost implications from the forthcoming Employment Rights Bill, adapting our structures, processes, and workforce planning accordingly. Payroll as a percentage of revenue has risen from 23.6% to 25.6% year-on-year, reinforcing the need to address cost efficiency as an ongoing priority. Our focus is on streamlining processes and supporting our teams to work more effectively - part of a multi-year journey to equip and empower our people to manage costs without compromising the guest experience.

-

Industry dynamics and content supply - Shorter theatrical windows, unpredictable release schedules, and changing cinema-going habits, with content availability shaped by distributors' strategies and global production trends. These factors affect all cinema operators.

-

Consumer behaviour - Cost-of-living pressures continue to shape discretionary spending patterns.

We are mitigating these risks through:

-

Reviewing our operating model from first principles to improve efficiency while maintaining service quality.

-

Evolving our guest offer to exceed expectations and secure discretionary spend.

-

Curating programming and enhancing our food & beverage offer to maximise local appeal and admissions.

-

Expanding sustainably to avoid over-exposure during market volatility.

Our equity cushion of 61.9% (balance sheet liabilities as a proportion of assets) is significantly better than the sector average, providing resilience in a market where many operators remain highly leveraged. Backed by a strong balance sheet, committed shareholders, and a clear strategy for sustainable, community-led growth, we are confident in our ability to adapt and thrive.

SECTION 172(1) STATEMENT

REEL Cinemas Limited operates 16 cinemas across the UK and employs 299 people. The Directors have acted in a way they consider would most likely promote the success of the company for the benefit of its members as a whole, having regard to the matters in Section 172(1) of the Companies Act 2006.

Long-Term Decision Making

Our strategy is to grow sustainably - expanding through selective new site opportunities, investing in technology, and refurbishing our existing portfolio. In January 2024, we opened our Farnham cinema, a prime example of targeted, high-quality expansion that supports our long-term ambitions while reflecting the lessons of sustainable growth in a recovering industry.

Stakeholder Interests

We actively engage with employees, guests, suppliers, landlords, communities, and shareholders through surveys, forums, and regular meetings. Feedback from these groups directly shapes the guest experience, operational improvements, and investment priorities, ensuring our decisions are grounded in the needs of those we serve.

Employees

We are committed to making REEL a place where our people thrive. While there is more to do, we are strengthening our offer through competitive pay, clear career pathways supported by defined role progression and skills-based training, and targeted development opportunities. Wellbeing resources, open communication, and regular feedback ensure teams remain connected and supported.

Business Relationships

We maintain long-term, transparent partnerships with suppliers, distributors, landlords, and community partners to deliver consistently high-quality guest experiences.

Community and Environment

Our ambition is to be "the REEL Heart of the Community" wherever we operate, delivering tangible social value through job creation, local supply chain engagement, events, and community-focused partnerships. For example, at REEL Blackburn we collaborate with Blackburn College's film course, hosting regular red carpet premieres to showcase student work.

We have invested in laser projection, deployed automation to reduce energy consumption, and implemented improved waste-reduction systems - all forming part of our long-term commitment to reducing our environmental footprint.

.

High Standards & Fairness Between Members

We operate within a strong ethical framework, ensuring fair treatment of all members with a commitment to reinvesting profits into the business to support long-term growth and resilience.

NON-FINANCIAL INFORMATION STATEMENT

Governance

Climate-related risks and opportunities are overseen by our Head of Property, Head of Tech, and Commercial Projects Manager, all of whom report directly to the Board to ensure climate considerations are embedded in strategic planning.

Identification and Management of Risks

We regularly assess climate-related risks, including regulatory change and resource scarcity, and address them through measures such as energy-efficient technologies, sustainable sourcing, and emergency preparedness. Our transition to laser projectors, for example, has significantly reduced energy consumption.

Principal Climate-Related Risks and Opportunities

Key risks include rising energy costs driven by regulatory or supply pressures. Opportunities include securing cost-efficient contracts, improving operational efficiency, and enhanced brand reputation through reducing the impact of the business on the environment.

Impact on Business Model and Strategy

Climate factors influence decisions on investing in renewable energy and adopting sustainable operating practices to enhance long-term resilience.

Key Performance Indicators

We monitor carbon emissions, energy consumption, and waste reduction, benchmarking against industry standards. Regular data collection and analysis measure progress and guide continuous improvement.

ON BEHALF OF THE BOARD:

S Suri - Director

11 September 2025

The directors present their report with the financial statements of the company for the period 29 December 2023 to 2 January 2025.

PRINCIPAL ACTIVITY

The principal activity of the company during the year consisted of running cinema complexes and associated leisure activities.

DIVIDENDS

No dividends will be distributed for the period ended 2 January 2025.

DIRECTORS

The directors shown below have held office during the whole of the period from 29 December 2023 to the date of this report.

S Suri

S Suri

R Suri

Other changes in directors holding office are as follows:

K C Suri - deceased 31 March 2024

FINANCIAL INSTRUMENTS

Cashflow risk

The main cashflow risks, under normal trading circumstances are fluctuating attendances as a result of demand for tickets and concession sales relating to film releases. Short term cash flow risk is mitigated by regular review of the expected timing of receipts and by ensuring that the company has committed facilities in place in order to manage its working capital and investment requirements. The risk is also partially managed as a result of film hire cost, being based on a percentage of cinema attendance sales.

Credit risk

The company's principal financial assets are other receivables. The company's credit risk is primarily attributable to these receivables. The board of directors continually monitor these receivables and ensure that appropriate forecasting is undertaken so as to ensure that these are repaid as required. Credit risk in relation to sales is mitigated in that payment is received in advance of the film showing reducing the risk of bad debts.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and cinema development, the company uses a mixture of term debt which is secured and where available and considered appropriate landlord contributions to new developments. The board regularly reviews the facilities available to the company to ensure that there is sufficient working capital available.

Cost risk

The company has had a historically stable cost base. The key risks are unforeseen maintenance liabilities and movements in utility costs. A programme of regular maintenance is in place to manage the risk of failure in the infrastructure, whilst utility contracts are managed and reviewed on an ongoing basis.

Interest rate risk

The company reviews its exposure to interest rates regularly and considers the benefit (or otherwise) of hedging against adverse interest rate movements as part of these reviews.

ENGAGEMENT WITH EMPLOYEES

The directors recognise that its employees are its most valuable asset and the directors are committed to engaging with them in a meaningful and transparent way. The directors value their feedback and input on various aspects of the business, such as strategy, performance, culture, values, health and safety, diversity and inclusion, and learning and development.

During the year, the directors have used various methods of communication and consultation to foster a culture of trust and collaboration among the company's employees. These include:

-

Regular team meetings and briefings to share information on business objectives, achievements, challenges and opportunities.

-

Employee surveys and focus groups to gather feedback on employee satisfaction, engagement, motivation and well-being.

-

Training and development programmes to enhance skills, knowledge and competencies of our employees and prepare them for future roles.

-

Recognition and reward schemes to celebrate outstanding performance, innovation and contribution to our business success.

-

Social events and activities to promote team spirit, camaraderie and a sense of belonging.

The directors believe that these initiatives have helped to create a positive and engaging work environment where employees feel valued, respected and empowered. The directors are proud of the high level of engagement and commitment that its employees demonstrate every day. The directors continue to seek their views and suggestions on how it can improve its business performance and employee experience.

Disabled Employees

The company is committed to promoting equality of opportunity and diversity in its workforce and to ensuring that no one is discriminated against on the grounds of disability. The company recognises the valuable contribution that disabled people can make to the business and the aim to create an inclusive and supportive work environment for them.

It is the company's policy to give full and fair consideration to applications for employment by disabled people and to assess each applicant on their merits, having regard to their particular aptitudes and abilities. The company makes reasonable adjustments to its recruitment process and to the workplace where necessary and practicable to accommodate disabled applicants and employees.

The policy for the employment, training, career development and promotion of disabled people is to provide them with equal opportunities to fulfil their potential and to progress within the organisation. The company offers appropriate training and development programmes to enhance their skills, knowledge and competencies and to prepare them for future roles.

The policy for the continuing employment and training of employees who have become disabled while employed by the company is to support them in retaining their jobs and in adapting to their changed circumstances. The company consults with them and their representatives on the best way to meet their needs and aspirations. Reasonable adjustments to working arrangements, duties, equipment or facilities are made where necessary and practicable.

The company monitors and reviews its policies and practices on a regular basis to ensure that they are effective and comply with the relevant legislation. The directors are proud of its diverse and talented workforce and values the difference that disabled people bring to the business.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

The company and its customers recognise the need to build strong relationships with its suppliers, as this is paramount to the success of the business. Strong relationships with film distributors ensure we are able to offer customers the latest movies alongside an exceptional guest experience. Along with the film licensors, strong relationships are built and developed with innovative suppliers of equipment to ensure that the latest technology is available to guests meaning that they are enjoyed in the best environment possible.

Stakeholder Engagement and Considerations

Relevant Issues and Stakeholders: Directors consider issues such as employee welfare, customer satisfaction, supplier relationships, and community impact. Regular engagement with stakeholders through surveys, meetings, and community events helps us understand their concerns and incorporate their feedback into our decisions.

Methods of Engagement: We engage with stakeholders through various methods, including employee feedback surveys, customer feedback platforms, supplier meetings.

Impact on Decisions and Strategies: Stakeholder feedback directly influences our strategic decisions. For example, feedback from community outreach led to the expansion of our local sponsorships, and employee surveys resulted in enhanced training and development initiatives.

STREAMLINED ENERGY AND CARBON REPORTING

The company has a strong commitment to delivering its services in the most environmentally efficient way.

Reel Cinemas Limited reported carbon emissions for the reporting year December 2023 to January 2025 amounting to 1,373.33 tCO2e (2023 - 1,391.96) with 54.8% (2023 - 52.3%) arising from electricity consumption.

Energy consumption used to calculate emissions (kWh)

2025

2023

Scope 1 - Direct Emissions

Gas consumption

2,915,024

3,186,704

Scope 2 - Energy Indirect Emissions

Electricity consumption - location based

3,635,903

3,516,853

Scope 3 - Other Indirect Emissions

Electricity - transmission & distribution

3,635,903

3,516,853

Business travel

84,819

78,215

Carbon emissions (tCO2e)

2025

2023

Scope 1 - Direct Emissions

533.16

582.90

Scope 2 - Energy Indirect Emissions

752.81

728.25

Scope 3 - Other Indirect Emissions

87.36

80.81

The company is reporting any/all of its Scope 1 & 2 emissions along with feasible Scope 3 emissions. Total SECR Energy in kWh was 6,550,927 (2023 - 6,703,557).

Intensity Ratio

2025

2023

tCO2e/Turnover £m

14.83

15.63

Quantification and reporting methodology

This report has been created using the Environmental Reporting Guidelines, including Streamlined Energy & Carbon Reporting guidance issued by the UK Government in April 2019.

Where they exist, Advantage Utilities uses the UK Government published carbon conversion factors relevant to the reporting period. Where emissions without published conversion factors have been used these have been calculated by Advantage Utilities in consultation with relevant stakeholders and any industry norms or standards that exist.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes of CO2e per £1,000,000 of trading revenues as this is representative of the main activity of the company.

Measures taken to improve energy efficiency

During the year, the company upgraded the traditional digital projection equipment to laser projectors at the Chorley, Rochdale and Farnham sites. In the coming year, the directors will continue to assess the use of solar panels at each site and engaging with Advantage Utilities to investigate potential renewable energy sources for each of the buildings to replace current supplies.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Magma Audit LLP (part of the Dains Group), is deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

S Suri - Director

11 September 2025

Opinion

We have audited the financial statements of Reel Cinemas Limited (the 'company') for the period ended 2 January 2025 which comprise the Statement of Income and Retained Earnings, Balance Sheet and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 2 January 2025 and of its loss for the period then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

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

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on pages eight and nine, 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 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company and industry, we have identified the principal risks of non-compliance with laws and regulations, and we have considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries, and management bias in accounting estimates. Audit procedures performed included:

-

Enquiries with management for consideration of known or suspected instances of non-compliance with laws and regulations and fraud;

-

Challenging assumptions made by management in their accounting estimates, in particular in relation to the depreciation of fixed assets; and

-

Identifying and testing material journal entries, in particular those journal entries posted with unusual account combinations, journal entries crediting revenue, journal entries crediting cash and journal entries with specific defined descriptions.

There are inherent limitations in the audit procedures described above. The more removed non-compliance with laws and regulations is, from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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 forgery or intentional misrepresentation, for example, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone 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.

Paul Orton FCA FCCA (Senior Statutory Auditor)

for and on behalf of Magma Audit LLP (part of the Dains Group)

Chartered Accountants

Statutory Auditor

Unit 2, Charnwood Edge Business Park

Syston Road

Leicestershire

LE7 4UZ

11 September 2025

TURNOVER

4

16,096,292

13,909,594

Cost of sales

(9,414,316

)

(8,276,712

)

GROSS PROFIT

6,681,976

5,632,882

Administrative expenses

(7,568,812

)

(7,231,504

)

(886,836

)

(1,598,622

)

Other operating income

5

673,447

1,992,783

OPERATING (LOSS)/PROFIT

7

(213,389

)

394,161

Interest receivable and similar income

30,282

50,020

(183,107

)

444,181

Interest payable and similar expenses

10

(78,230

)

(116,207

)

(LOSS)/PROFIT BEFORE TAXATION

(261,337

)

327,974

Tax on (loss)/profit

11

(24,243

)

(298,684

)

(LOSS)/PROFIT FOR THE FINANCIAL PERIOD

(285,580

)

29,290

Retained earnings at beginning of period

3,967,626

3,938,336

RETAINED EARNINGS AT END OF PERIOD

3,682,046

3,967,626

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

14,657,663

15,305,624

14,657,663

15,305,624

CURRENT ASSETS

Stocks

14

390,968

302,678

Debtors

15

2,839,281

2,016,448

Cash at bank and in hand

2,163,653

2,849,421

5,393,902

5,168,547

CREDITORS

Amounts falling due within one year

16

(4,657,710

)

(5,603,725

)

NET CURRENT ASSETS/(LIABILITIES)

736,192

(435,178

)

TOTAL ASSETS LESS CURRENT LIABILITIES

15,393,855

14,870,446

CREDITORS

Amounts falling due after more than one year

17

(7,771,809

)

(6,987,063

)

PROVISIONS FOR LIABILITIES

21

(940,000

)

(915,757

)

NET ASSETS

6,682,046

6,967,626

CAPITAL AND RESERVES

Called up share capital

22

3,000,000

3,000,000

Retained earnings

23

3,682,046

3,967,626

SHAREHOLDERS' FUNDS

6,682,046

6,967,626

The financial statements were approved by the Board of Directors and authorised for issue on 11 September 2025 and were signed on its behalf by:

S Suri - Director

1.	STATUTORY INFORMATION

Reel Cinemas Limited is a private limited company, limited by shares, incorporated in England and Wales. The registered office is Sital House, 3-6 Cattle Market, Loughborough, Leicestershire, LE11 3DL.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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. Monetary amounts in these financial statements are rounded to the nearest £.

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

This 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 and loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

Section 4 'Statement of Financial Position' - Reconciliation of the opening and closing number of shares;

Section 7 'Statement of Cash Flows' - Presentation of a statement of cash flows and related notes and disclosures;

Section 33 'Related Party Disclosures' - Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Reel Cinemas (Europe) Limited. These consolidated financial statements are available from its registered office, and from Companies House.

Going concern

The financial statements have been prepared on a going concern basis. In forming this view, the directors have considered the company's current financial position and its future prospects. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. As part of their assessment, the directors prepare annual financial forecasts to ensure that the company has sufficient funding and facilities in place to meet its obligations as they fall due. The company also conducts annual reviews with its Bank to discuss and confirm the ongoing availability of any credit or financing facilities.

Turnover

Turnover represents amounts receivable for goods and services, net of Value Added Tax (VAT) and trade discounts.

Cinema and concession sales are recognised on a cinema week basis, running from Friday to Thursday, and are received via cash, debit, and credit card transactions. Advertising income is recognised at the end of the month to which it relates. All other sales are recognised based on the issuance of sales invoices at appropriate points in time, reflecting when the performance obligations have been satisfied.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Goodwill represents the excess of the cost of acquisition of businesses over the fair value of 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 no more than 10 years. Goodwill is reviewed for impairment annually.

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 improvements

10 - 25 years

Plant and machinery

10% - 25% on cost

Assets under construction

Not depreciated

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit and loss.

Assets under construction

Assets under construction are those assets that are currently in development and are not in use by the company. The costs relating to the development of the projects are capitalised however no depreciation is charged until the asset is available for use.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. At each reporting date, an assessment is made for impairment.

Financial instruments

The company has elected to apply the provisions of section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial asset and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to sett 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.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities relate to taxes levied by the same tax authority.

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 the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease and taken to the profit and loss account in the period that they occur.

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.

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.

Retirement benefits

The company operates a defined contribution scheme for the benefit of its employees. Payments to the defined contribution retirement benefit scheme are charged as an expense as they fall due.

Debtors

Basic financial assets, including trade and other debtors, 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, less any impairment.

Cash and cash equivalents

Cash and cash equivalents are represented by cash in hand, deposits held at call with financial institutions, and other short-term 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.

Creditors

Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related parties, 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. Such instruments are subsequently carried at amortised cost using the effective interest method, less any impairment.

Other grants

Grants received to fund capital expenditure are amortised to the profit and loss account over the expected useful life of the assets they are funding.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful economic lives of tangible assets

The annual depreciation for tangible assets 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 13 for the carrying amount of the property plant and equipment, and the accounting policy of tangible fixed assets for the useful economic lives for each class of assets.

4.

TURNOVER

The turnover and loss (2023 - profit) before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

Period

Period

29/12/23

30/12/22

to

to

2/1/25

28/12/23

£

£

Cinema sales

9,122,561

7,415,511

Concession sales

5,357,797

4,584,641

Advertising

780,947

795,011

Sundry sales

834,987

1,114,431

16,096,292

13,909,594

An analysis of turnover by geographical market is given below:

Period

Period

29/12/23

30/12/22

to

to

2/1/25

28/12/23

£

£

United Kingdom

16,096,292

13,909,594

16,096,292

13,909,594

5.	OTHER OPERATING INCOME

Period

Period

29/12/23

30/12/22

to

to

2/1/25

28/12/23

£

£

Rents received

56,210

40,168

Sundry receipts

384,310

231,801

Management fees receivable

109,687

97,574

Government grants

123,240

123,240

Exceptional items

-

1,500,000

673,447

1,992,783

Further information relating to the exceptional items is included within note 9.

6.	EMPLOYEES AND DIRECTORS

Period

Period

29/12/23

30/12/22

to

to

2/1/25

28/12/23

£

£

Wages and salaries

3,865,915

3,092,112

Social security costs

217,201

163,301

Other pension costs

47,044

36,924

4,130,160

3,292,337

The average number of employees during the period was as follows:

Period

Period

29/12/23

30/12/22

to

to

2/1/25

28/12/23

Directors

3

4

Management

5

6

Accounts

6

5

Cinema and site staff

287

242

301

257

Period

Period

29/12/23

30/12/22

to

to

2/1/25

28/12/23

£

£

Directors' remuneration

-

-