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Report of the Director and |
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Financial Statements for the Year Ended 31 December 2019 |
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MUBI UK LIMITED |
REGISTERED NUMBER:
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Report of the Director and |
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Financial Statements for the Year Ended 31 December 2019 |
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for |
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MUBI UK LIMITED |
MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Contents of the Financial Statements |
for the year ended 31 December 2019 |
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Page |
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Company Information | 1 |
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Report of the Director | 2 |
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Balance Sheet | 5 |
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Notes to the Financial Statements | 6 |
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MUBI UK LIMITED |
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Company Information |
for the year ended 31 December 2019 |
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DIRECTOR: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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SENIOR STATUTORY AUDITOR: |
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AUDITORS: |
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Statutory Auditors |
Chartered Accountants |
Preston Park House |
South Road |
Brighton |
East Sussex |
BN1 6SB |
MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Report of the Director |
for the year ended 31 December 2019 |
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The director presents his report with the financial statements of the company for the year ended 31 December 2019. |
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PRINCIPAL ACTIVITIES |
The principal activities of the company in the year under review were those of the provision of an online film platform |
service and theatrical showings. |
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RESEARCH AND DEVELOPMENT |
The company continues to invest in the development of software, database systems and graphic designing in relation to |
the online film platform service market to ensure it is equipped to deal with continuing developments in this sector. This |
research and development will ensure that the company is able to evolve with the requirements of its customers. |
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DIRECTOR |
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GOING CONCERN |
The company continues to be loss making, showing a loss of £262,201 (2018: £1,192,180) in the current financial year |
and has a negative balance sheet position showing net liabilities of £9,384,273 (2018: £9,122,072). Of the liabilities |
owed by the company as at 31 December 2019, £9,358,165 (2018: £10,142,803) is owed to its parent company MUBI, |
INC. The liability owed to MUBI, INC is included as a long term liability as there is a credit agreement in place that |
states the parent company is committed to lend the monies until 30 April 2028. |
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The company has received a letter of support from MUBI, INC. and a commitment by MUBI, INC. to lend $20,000,000 |
to the company was agreed on 30 April 2018. Therefore the director believes that the company has adequate financial |
resources to continue in operational existence for the foreseeable future. |
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The director is confident that the company will obtain a stronger financial position in the future as the MUBI brand |
grows stronger and the number of subscribers in the UK increase. The director also believes that the company is well |
placed to successfully manage its business risk. |
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In light of the above, the director has continued to prepare the financial statements on the going concern basis. |
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MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Report of the Director |
for the year ended 31 December 2019 |
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PRINCIPAL RISKS AND UNCERTAINTIES |
There are a number of risks and uncertainties that can impact the performance of the company, some of which are |
beyond the control of the company and its Board. |
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The principal risks and uncertainties facing the company are outlined below: |
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Market conditions |
The principal risk affecting the company is the sales performance and the retention of market share to enable the |
company to continue to generate and grow revenue in future years. The market for entertainment video is intensely |
competitive and subject to rapid change. Through new and existing distribution channels including subscriptions, |
transactional and ad-supported models, the company has the potential to capture meaningful segments of the |
entertainment video market. |
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As Mubi expands its operations internationally it is managing and adjusting its business to address varied content |
offerings, consumer customs and practices, in particular those dealing with e-commerce and internet video, as well as |
differing legal and regulatory environments. |
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Financial risk |
The director has reviewed the financial risk management objectives and policies of the company. The directors do not |
believe there to be significant risks in this area. The company does not enter into any hedging instruments as there are |
not believed to be any material exposure. The company does not enter into any financial instruments for speculative |
purposes. Appropriate trade terms are negotiated with suppliers and customers, Management review these terms, the |
relationships with suppliers and customers and manages any exposure on normal trade terms. |
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Brexit |
Management continues to closely monitor developments in relation to Brexit and the potential consequential political |
and economic uncertainties to mitigate risks to the business. |
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COVID19 |
The director has considered the current COVID19 outbreak, and although it is affecting a number of companies in the |
UK, the director feels that it should not effect the company as online platforms have shown increased subscriptions due |
to the government lock down policies. |
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STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Report of the Director and the financial statements in accordance with |
applicable law and regulations. |
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Company law requires the director to prepare financial statements for each financial year. Under that law the director |
has 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 director must not approve |
the financial statements unless he is 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 director is required to: |
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- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will
continue in business. |
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The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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. |
MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Report of the Director |
for the year ended 31 December 2019 |
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STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is 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 he has taken all the steps that he ought to have taken as a |
director in order to make himself aware of any relevant audit information and to establish that the company's auditors are |
aware of that information. |
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AUDITORS |
The auditors, Feist Hedgethorne Limited, will be proposed for re-appointment at the forthcoming Annual General |
Meeting. |
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This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small |
companies. |
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ON BEHALF OF THE BOARD: |
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MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Balance Sheet |
31 December 2019 |
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2019 | 2018 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 4 |
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CURRENT ASSETS |
Debtors | 5 |
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Cash at bank |
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CREDITORS |
Amounts falling due within one year | 6 | ( |
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NET CURRENT (LIABILITIES)/ASSETS | ( |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CREDITORS |
Amounts falling due after more than one
year |
7 |
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NET LIABILITIES | ( |
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CAPITAL AND RESERVES |
Called up share capital |
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Retained earnings | ( |
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SHAREHOLDERS' FUNDS | ( |
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In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered. |
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The financial statements were approved by the director and authorised for issue on
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MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Notes to the Financial Statements |
for the year ended 31 December 2019 |
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1. | STATUTORY INFORMATION |
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Mubi Limited is a private company, limited by shares, registered in England and Wales. The company's |
registered number, registered office address and business address can be found on the Company Information |
page. |
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The presentation and the functional currency of the financial statements is the Pound Sterling (£). Monetary |
amounts in these financial statements are rounded to the nearest pound. |
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2. | ACCOUNTING POLICIES |
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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 as |
applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of |
FRS 102 have been applied other than where additional disclosure is required to show a true and fair view. |
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The financial statements have been prepared under the historical cost convention. The principal accounting |
policies adopted are set out below. |
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Significant judgements and estimates |
Preparation of the financial statements requires management to make significant judgements and estimates and |
these 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 if the revision affects only that period, or in the |
period of the revision and future periods if the revision affects both current and future periods. |
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The items in the financial statements where these judgements and estimates have been made include, but are not |
limited to, the useful economic life of tangible fixed assets, the depreciation of these assets and the recoverability |
of debtors. |
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Revenue recognition |
Turnover is recognised at the fair value of the consideration received or receivable for goods and services |
provided in the normal course of business, 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. |
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Revenue from subscriptions is immediately recognised and deferred in relation to the period of subscription, |
management fee income is recognised at the end of the year in which the services have been provided and |
theatrical release income is recognised after the service has been provided. |
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Tangible fixed assets |
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost |
includes costs directly attributable to making the asset capable of operating as intended by management. |
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Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful |
life. |
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Short leasehold | - | 20% on cost |
Fixtures and fittings | - | 20% on cost |
Computer equipment | - | 33% on cost |
MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2019 |
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2. | ACCOUNTING POLICIES - continued |
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Financial instruments |
The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 |
'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments. |
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Financial instruments are recognised in the company's balance sheet when the company becomes party to the |
contractual provisions of the instrument. |
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Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is |
a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to |
realise the asset and settle the liability simultaneously. |
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Basic financial assets |
Basic financial assets, which include debtors and cash and bank: balances. are initially measured at transaction |
price including transaction costs and are subsequently carried at amortised cost using the effective interest |
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the |
present value of the future receipts discounted at a market rate of interest. Financial assets classified as |
receivable within one year are not amortised. |
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Classification of financial liabilities |
Financial liabilities and equity instruments are classified according to the substance of the contractual |
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of |
the company after deducting all of its liabilities. |
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Basic financial liabilities |
Basic financial liabilities, including creditors are initially recognised at transaction price unless the arrangement |
constitutes a financing transaction, where the debt instrument is measured at the present value of the future |
payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not |
amortised. |
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Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
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Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of |
business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or |
less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction |
price and subsequently measured at amortised cost using the effective interest method. |
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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. |
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Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to |
the extent that it relates to items recognised in other comprehensive income or directly in equity. |
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Current or deferred taxation assets and liabilities are not discounted. |
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Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or |
substantively enacted by the balance sheet date. |
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Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
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A research and development tax credit is recognised when it is probable that a tax credit in relation to research |
and development carried out will be received. |
MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2019 |
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2. | ACCOUNTING POLICIES - continued |
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Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the |
balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at |
the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
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Leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the |
lease. |
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Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension |
scheme are charged to profit or loss in the period to which they relate. |
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Going concern |
The company continues to be loss making, showing a loss of £262,201 (2018: £1,192,180) in the current |
financial year and has a negative balance sheet position showing net liabilities of £9,384,273 (2018: £9,122,072). |
Of the liabilities owed by the company as at 31 December 2019, £9,358,165 (2018: £10,142,803) is owed to its |
parent company MUBI, INC. The liability owed to MUBI, INC is included as a long term liability as there is a |
credit agreement in place that states the parent company is committed to lend the monies until 30 April 2028. |
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The company has received a letter of support from MUBI, INC. and a commitment by MUBI, INC. to lend |
$20,000,000 to the company was agreed on 30 April 2018. Therefore the director believes that the company has |
adequate financial resources to continue in operational existence for the foreseeable future. |
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The director is confident that the company will obtain a stronger financial position in the future as the MUBI |
brand grows stronger and the number of subscribers in the UK increase. The director also believes that the |
company is well placed to successfully manage its business risk. |
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In light of the above, the director has continued to prepare the financial statements on the going concern basis. |
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Impairment |
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets |
to determine whether there is any indication that those assets have suffered an impairment loss. If any such |
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the |
impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the |
company estimates the recoverable amount of the cash-generating unit to which the asset belongs. |
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Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the |
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current |
market assessments of the time value of money and the risks specific to the asset for which the estimates of future |
cash flows have not been adjusted. |
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If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, |
the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment |
loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which |
case the impairment loss is treated as a revaluation decrease. |
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Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to |
apply. Where an Impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating |
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount |
does not exceed the carrying amount that would have been determined had no impairment loss been recognised |
for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately |
in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the |
impairment loss is treated as a revaluation increase. |
MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2019 |
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2. | ACCOUNTING POLICIES - continued |
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Equity instruments |
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. |
Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of |
the company. |
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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. |
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The cost of any unused holiday entitlement is recognised in the period in which the employee's services are |
received. |
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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. |
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3. | EMPLOYEES AND DIRECTORS |
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The average number of employees during the year was
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4. | TANGIBLE FIXED ASSETS |
Fixtures |
Short | and | Computer |
leasehold | fittings | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2019 |
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Additions |
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Disposals |
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At 31 December 2019 |
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DEPRECIATION |
At 1 January 2019 |
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Charge for year |
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Eliminated on disposal |
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At 31 December 2019 |
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NET BOOK VALUE |
At 31 December 2019 |
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At 31 December 2018 |
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5. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Trade debtors |
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Other debtors |
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Included in other debtors is corporation tax recoverable in relation to the research and development claim |
totalling £347,045 (2018: £330,411). |
MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2019 |
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6. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Trade creditors |
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Taxation and social security |
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Other creditors |
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7. |
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR |
2019 | 2018 |
£ | £ |
Other creditors |
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8. | LEASING AGREEMENTS |
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Minimum lease payments under non-cancellable operating leases fall due as follows: |
2019 | 2018 |
£ | £ |
Within one year |
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Between one and five years |
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9. | DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006 |
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As the income statement has been omitted from the filing copy of the financial statements, the following |
information in relation to the audit report on the statutory financial statements is provided in accordance with |
section 444(5B) of the Companies Act 2006. |
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The audit report was unqualified. However, we draw attention to the going concern paragraph in the Report of |
the Director in the financial statements, which indicates that the company incurred a net loss of £262,201 during |
the year ended 31 December 2019 and, as at that date, the company's net liabilities exceeded its total assets by |
£9,384,273. As stated in the going concern paragraph in the Report of the Director, these events or conditions |
indicate that a material uncertainty exists which may cast doubt on the company's ability to continue as a going |
concern. Our opinion is not modified in respect of this matter. |
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The senior statutory auditor was C J Morey. |
The auditor was Feist Hedgethorne Limited. |
MUBI UK LIMITED (REGISTERED NUMBER: 07385593) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2019 |
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10. | DIRECTOR'S ADVANCES, CREDITS AND GUARANTEES |
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The following advances and credits to a director subsisted during the years ended 31 December 2019 and |
31 December 2018: |
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2019 | 2018 |
£ | £ |
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Balance outstanding at start of year |
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Amounts advanced |
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Amounts repaid |
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Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year |
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11. | RELATED PARTY DISCLOSURES |
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The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The |
Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party |
transactions with wholly owned subsidiaries within the Mubi group. |
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12. | ULTIMATE CONTROLLING PARTY |
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The company's ultimate parent undertaking and controlling party is MUBI, INC. (F/K/A BAZAAR, INC.), a |
company incorporated in the United States of America. |
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The largest and smallest group in which the results of the company are consolidated is that headed by MUBI, |
INC. The consolidated financial statements of this group may be obtained from MUBI, INC., 215 Park Avenue |
South FL12, Suite #12, New York, NY 10003. |
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13. | EQUITY RESERVE |
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Share capital - This represents the nominal value of shares that have been issued. |
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Retained earnings - Includes all current and prior period retained profits and losses. |