Academy Films Limited
Annual Report and Financial Statements
For the year ended 30 June 2021
Company Registration No. 05860629 (England and Wales)
Academy Films Limited
Company Information
Directors
J Glazer
S Cooper
M Riordan
Company number
05860629
Registered office
Charlotte Building
17 Gresse Street
London
W1T 1QL
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Business address
16 West Central Street
London
WC1A 1JJ
Academy Films Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Balance sheet
10
Notes to the financial statements
11 - 22
Academy Films Limited
Strategic Report
For the year ended 30 June 2021
Page 1
The directors present the strategic report for the year ended 30 June 2021.
Fair review of the business
The directors are pleased to report that in year ended 30 June 2021 the business had another successful year, securing a number of large contracts, coupled with continued strong working capital management.
The company results are in line with expectations with turnover increasing from £21.6m to £23.9m and a profit for the year of £2.7m (2020: £2.4m).
Principal risks and uncertainties
The principal business risks affecting the company are considered to relate to the economy and political uncertainty in the UK where the company operates and the global pandemic of Coronavirus (COVID-19). Other risks include financial pressures on clients and advertising agencies and the ongoing uncertainty with regards to Brexit.
The directors have considered the potential impact of the coronavirus, and the various measures taken to contain it, on the operations of the company in the near future. In response to the expected economic downturn caused by the COVID-19 pandemic, the directors will take the following steps to mitigate any associated risks:
-
Review contractual terms to understand any implications and plan accordingly;
-
Consider force majeure and relief provisions in contracts to reduce or eliminate liabilities; and
-
Closer management of cash to ensure payment is made upon receipt of goods or services.
As a result of production not being able to be completed due to the pandemic, the directors expect revenue to reduce over the coming months. In the event that revenues continue to be significantly impacted for a longer period then the company will consider cost cutting measures in order to ensure the long-term viability of the business. However, the company has sufficient cash reserves as at the date of approval of the financial statements to enable it to continue to meet its liabilities as they fall due for at least the next twelve months.
Development and performance
At the end of the financial year the directors feel the company is well placed to meet these challenges, underpinned by a strong balance sheet including net assets of over £6.6m (2020: £5.0m) and cash balances of over £3.0m (2020: £3.5m).
Key performance indicators
The Directors review KPIs throughout the year as part of the normal management process. The KPIs for the year ended 30 June 2021 are:
2021 2020
Gross profit margin 2
2
% 2
4
%
Operating
profit
margin 1
4
% 1
4
%
Profit (after tax) margin 1
1
% 1
1
%
Academy Films Limited
Strategic Report (Continued)
For the year ended 30 June 2021
Page 2
S Cooper
M Riordan
Director
Director
Date:
Date:
Academy Films Limited
Directors' Report
For the year ended 30 June 2021
Page 3
The directors present their annual report and financial statements for the year ended 30 June 2021.
Principal activities
The principal activity of the company continued to be that of the production of television commercials.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £1,083,059 (2020: £956,131). The directors do not recommend payment of a final dividend.
No preference dividends were paid.
The directors do not recommend payment of a final dividend (2020: £nil).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J Glazer
S Cooper
M Riordan
Future developments
The company expects the market to be challenging, but is confident that trading will continue to be profitable in the forthcoming year.
Auditor
The auditor,
Moore Kingston Smith LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
On behalf of the board
S Cooper
M Riordan
Director
Director
30 June 2022
Academy Films Limited
Directors' Responsibilities Statement
For the year ended 30 June 2021
Page 4
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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;
-
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.
Academy Films Limited
Independent Auditor's Report
To the Members of Academy Films Limited
Page 5
Opinion
We have audited the financial statements of Academy Films Limited
(the 'company')
for the year ended 30 June 2021 which comprise the Statement of Income and Retained Earnings, the 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 FRS 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 30 June 2021 and of its profit for the year 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
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.
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Academy Films Limited
Independent Auditor's Report (Continued)
To the Members of Academy Films Limited
Page 6
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the Strategic Report and the Directors'
R
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the Strategic Report and the Directors' Report 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 identifie
d
material misstatements in the Strategic Report and the Directors'
R
eport
.
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
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 Directors'
R
esponsibilities
S
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the
financial statements
, the
directors are
responsible for assessing the 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.
Academy Films Limited
Independent Auditor's Report (Continued)
To the Members of Academy Films Limited
Page 7
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance
,
but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
-
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Academy Films Limited
Independent Auditor's Report (Continued)
To the Members of Academy Films Limited
Page 8
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
-
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
-
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
-
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
-
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
-
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 an auditor's report 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.
Joanna Cosgrove (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
30 June 2022
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Academy Films Limited
Statement of Income and Retained Earnings
For the year ended 30 June 2021
Page 9
2021
2020
Notes
£
£
Turnover
3
23,913,596
21,609,835
Cost of sales
(18,711,386)
(16,483,903)
Gross profit
5,202,210
5,125,932
Administrative expenses
(1,852,069)
(2,252,576)
Other operating income
110,772
Operating profit
4
3,350,141
2,984,128
Interest receivable and similar income
7
2,292
15,205
Profit before taxation
3,352,433
2,999,333
Tax on profit
8
(670,000)
(560,002)
Profit for the financial year
2,682,433
2,439,331
Retained earnings brought forward
4,967,922
3,484,722
Dividends
(1,083,059)
(956,131)
Retained earnings carried forward
6,567,296
4,967,922
The statement of income and retained earnings has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and losses other than those passing through the profit and loss account.
Academy Films Limited
Balance Sheet
As at 30 June 2021
Page 10
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
9
77,486
130,807
Current assets
Work in progress
10
149,798
31,014
Debtors
11
7,118,988
3,121,329
Cash at bank and in hand
3,006,460
3,499,335
10,275,246
6,651,678
Creditors: amounts falling due within one year
12
(3,785,036)
(1,814,163)
Net current assets
6,490,210
4,837,515
Net assets
6,567,696
4,968,322
Capital and reserves
Called up share capital
15
400
400
Profit and loss reserves
6,567,296
4,967,922
Total equity
6,567,696
4,968,322
The financial statements were approved by the board of directors and authorised for issue on 30 June 2022 and are signed on its behalf by:
S Cooper
M Riordan
Director
Director
Company Registration No. 05860629
Academy Films Limited
Notes to the Financial Statements
For the year ended 30 June 2021
Page 11
1
Accounting policies
Company information
Academy Films Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Charlotte Building, 17 Gresse Street, London, W1T 1QL.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared on the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Exemptions for qualifying entities under FRS 102
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 or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues
: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
-
Section 26 ‘Share based Payment’
:
Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Nua Limited
. These consolidated financial statements are available from its registered office,
Charlotte Building, 17 Gresse Street, London, W1T 1QL.
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
1
Accounting policies
(Continued)
Page 12
1.3
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
true
The directors have considered the
ongoing
impact of COVID-19, and the various measures taken to contain it, on the operations of the business in the near future. The directors will continue to monitor the government announcements, and in the event income is impacted significantly they will consider cost cutting measures in order to ensure the long term viability of the business.
Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis
.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.5
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
20% straight line
Plant and machinery
33.33% straight line
Fixtures, fittings & equipment
20% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.6
Work in progress
Work in progress is stated at the lower of cost and net realisable value.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of
work in progress
over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
1
Accounting policies
(Continued)
Page 13
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company only has basic financial instruments measured at amortised cost, with no financial instruments classified as other or basic instruments measured at fair value.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
1
Accounting policies
(Continued)
Page 14
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
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 or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
1.11
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
.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
1
Accounting policies
(Continued)
Page 15
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
Page 16
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Revenue recognition
Significant management judgement is required in determining the point at which revenue should be recognised. Revenue is recognised in respect of each production from the point at which the company has obtained the right to consideration in return for performance. This is considered to be when all necessary approvals during the process of pre-production have been obtained from the commissioning agency and normally equates to the date at which shooting commences. No profit element is recognised until the company is able to estimate the profit on the production reliably. In arriving at this point of recognition, management have considered the liabilities and amounts that would be due if at different points of the contract, the project were to be pulled.
Trade debtors recoverability
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
Page 17
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover
Production of television commercials
23,161,020
21,360,340
Music
752,576
249,495
23,913,596
21,609,835
Other significant revenue
Interest income
2,292
15,205
Grants received
110,772
Turnover analysed by geographical market
2021
2020
£
£
UK
18,197,583
16,737,417
Europe and USA
5,697,323
4,356,170
Other
18,690
516,248
23,913,596
21,609,835
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
19,684
(9,443)
Government grants
(110,772)
Fees payable to the company's auditor for the audit of the company's financial statements
19,800
17,900
Depreciation of owned tangible fixed assets
62,504
66,869
Operating lease charges
230,499
280,049
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £19,684 (2020 - £9,443).
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
Page 18
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Management
4
4
Production
20
21
Total
24
25
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
1,170,419
1,438,163
Social security costs
146,848
178,371
Pension costs
19,482
20,107
1,336,749
1,636,641
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
310,749
357,773
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
106,584
173,789
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
2,292
15,205
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
Page 19
8
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
670,000
560,002
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
3,352,433
2,999,333
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
636,962
569,873
Tax effect of expenses that are not deductible in determining taxable profit
1,791
5,868
Permanent capital allowances in excess of depreciation
8,863
10,549
Creative tax credit
(26,288)
Other differences
22,384
Tax charge for the year
670,000
560,002
9
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost
At 1 July 2020
230,659
80,796
86,125
397,580
Additions
8,333
850
9,183
At 30 June 2021
230,659
89,129
86,975
406,763
Depreciation and impairment
At 1 July 2020
115,449
65,725
85,599
266,773
Depreciation charged in the year
46,132
15,675
697
62,504
At 30 June 2021
161,581
81,400
86,296
329,277
Carrying amount
At 30 June 2021
69,078
7,729
679
77,486
At 30 June 2020
115,210
15,071
526
130,807
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
Page 20
10
Work in progress
2021
2020
£
£
Work in progress
149,798
31,014
11
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
2,297,498
283,181
Amounts owed by group undertakings
3,629,552
2,526,280
Other debtors
8,604
8,174
Prepayments and accrued income
1,183,334
303,694
7,118,988
3,121,329
12
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Redeemable ordinary shares
13
200,000
200,000
Trade creditors
1,318,223
154,586
Amounts due to group undertakings
5,000
Corporation tax
310,443
240,443
Other taxation and social security
468,929
608,973
Dividends payable
6,494
Other creditors
209,250
8,020
Accruals and deferred income
1,278,191
590,647
3,785,036
1,814,163
13
Loans and overdrafts
2021
2020
£
£
Redeemable ordinary shares payable within one year
200,000
200,000
The rights of the redeemable ordinary shares are included in note 16.
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
Page 21
14
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
19,482
20,107
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
15
Share capital
2021
2020
£
£
Ordinary share capital
Allotted, called up and fully paid
100 Ordinary A Shares of £1 each
100
100
100 Ordinary B Shares of £1 each
100
100
100 Ordinary C Shares of £1 each
100
100
100 Ordinary D Shares of £1 each
100
100
400
400
The 'A' ordinary. 'B' ordinary, 'C' ordinary, 'D' ordinary shares and the redeemable ordinary shares all rank pari passu with the exception of when there are surplus assets of the company available for distribution among the members. In such a circumstance the following will apply.
Amounts will be paid upon the Redeemable Ordinary Shares.
Amounts will be paid upon the 'A' ordinary, 'C' and 'D' ordinary shares.
All remaining assets will be distributed pari passu amongst the holders of the 'A' ordinary, 'C' ordinary, 'D' ordinary and redeemable ordinary shares.
The 'B' ordinary shares shall not confer any further right of participation in the profits or assets of the company.
Academy Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2021
Page 22
16
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
184,600
123,067
Between two and five years
676,867
861,467
123,067
17
Related party transactions
Dividends of £1,083,059 (2020: £956,131) were paid to directors during the year. At the balance sheet date a total of £103,063 (2020: £nil) was owed to directors in the company and £5,442 (2020: £4,903) was owed by directors in the company.
No guarantees have been given or received.
18
Ultimate controlling party
The immediate parent company of Academy Films Limited is Nua Limited.
Academy Films Limited has no ultimate controlling party.
2021-06-30
2020-07-01
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