RSA Films Limited
Annual Report and Financial Statements
For the year ended 30 September 2020
Company Registration No. 01761486 (England and Wales)
RSA Films Limited
Company Information
Directors
Deborah Garvey
Kai Hsiung
Jordan Scott
Luke Scott
Secretary
RWL Registrars Limited
Company number
01761486
Registered office
42-44 Beak Street
London
United Kingdom
W1F 9RH
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
RSA Films Limited
Contents
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 25
RSA Films Limited
Strategic Report
For the year ended 30 September 2020
Page 1
The directors present the strategic report for the year ended 30 September 2020.
Fair review of the business
The results for the year and financial position of the company are in the annexed financial statements.
RSA Films is a global, award winning advertising and entertainment production company specialising in live action
and stills photography.
The year ending 30 September 20
20
was a challenging year for the advertising industry and the country. The endless
uncertainty surrounding Brexit, the onset of the Covid-19 pandemic and the continuing disruption created by mobile and
streaming platforms has
resulted in a down turn in client spend.
Principal risks and uncertainties
Covid 19 has had a significant impact on our business. Social Distancing, Travel Restrictions and the Government Lock down has made it challenging for any production to happen. Fortunately the business was in good financial health, with a healthy pipeline of productions shooting when Pandemic hit the UK. We were able to adapt and finish the productions that had commenced. This ensured that we had revenue post lockdown. By utilising the Government Furlough Scheme, historical prudent management of our fixed costs and adapting quickly to the challenges we faced we are able to ensure that we can ride out the down turn for the short to medium term. Given recent events, Governments relaxing of the lockdown, and guidance on shooting safely we are seeing brands and agencies contacting us and have secured work that will see income for the next 3-4 months. We anticipate that this will allow us to continue to trade and adjust to the new market post
C
ovid-19.
Management has made some further changes to the company and are in the process of executing a new
strategic plan with the focus on growing new areas of the business and developing our global reach.
Development and performance
We have maintained a similar level of output. We have also continued to invest in nurturing new talent and
developing Black Dog, our music video division whilst exploring other opportunities.
Key performance indicators
The Directors review KPIs throughout the year as part of the normal management process. Whilst our turnover has decreased by £1,930,625, the margins are increasingly difficult to maintain in the challenging environment. The net current asset position of the group still remains in a very strong position at £2,331,373. The directors were also satisfied with net asset position at the year end.
Kai Hsiung
Director
9 June 2021
RSA Films Limited
Directors' Report
For the year ended 30 September 2020
Page 2
The directors present their annual report and financial statements for the year ended 30 September 2020.
Principal activities
The principal activity of the company continued to be that of film production.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Deborah Garvey
Kai Hsiung
Jordan Scott
Luke Scott
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
The auditor, Moore Kingston Smith LLP, is 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
Kai Hsiung
Director
9 June 2021
RSA Films Limited
Directors' Responsibilities Statement
For the year ended 30 September 2020
Page 3
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;
-
state whether applicable UK 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.
RSA Films Limited
Independent Auditor's Report
To the Members of RSA Films Limited
Page 4
Opinion
We have audited the financial statements of RSA Films Limited
(the 'company')
for the year ended 30 September 2020 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows 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 September 2020 and of its loss 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
RSA Films Limited
Independent Auditor's Report (Continued)
To the Members of RSA Films Limited
Page 5
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' Report 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' Report
.
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 Directors' Responsibilities Statement, 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.
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.
RSA Films Limited
Independent Auditor's Report (Continued)
To the Members of RSA Films Limited
Page 6
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.
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
for no purpose other than to draw to the attention of
the company’s members those matters we are required to
include
in an auditor's report
addressed to them.
To the fullest extent permitted by law, we do not accept or assume responsibility to
any party
other than the company and the company’s members as a body, for our 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
9 June 2021
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
RSA Films Limited
Statement of Comprehensive Income
For the year ended 30 September 2020
Page 7
2020
2019
Notes
£
£
Turnover
3
18,322,261
20,252,886
Cost of sales
(16,681,214)
(18,057,898)
Gross profit
1,641,047
2,194,988
Administrative expenses
(2,458,428)
(2,684,361)
Other operating income
441,801
233,731
Operating loss
4
(375,580)
(255,642)
Interest receivable and similar income
7
13,672
5,875
Loss before taxation
(361,908)
(249,767)
Taxation
8
1,561
43,264
Loss for the financial year
(360,347)
(206,503)
The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.
RSA Films Limited
Balance Sheet
As at 30 September 2020
Page 8
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
9
12,732
23,764
Current assets
Work in progress
10
105,732
231,189
Debtors
11
4,443,282
4,636,042
Investments
12
500
500
Cash at bank and in hand
1,364,090
1,151,051
5,913,604
6,018,782
Creditors: amounts falling due within one year
13
(3,582,231)
(3,337,477)
Net current assets
2,331,373
2,681,305
Total assets less current liabilities
2,344,105
2,705,069
Provisions for liabilities
14
(617)
Net assets
2,344,105
2,704,452
Capital and reserves
Called up share capital
17
12
12
Profit and loss reserves
2,344,093
2,704,440
Total equity
2,344,105
2,704,452
The financial statements were approved by the board of directors and authorised for issue on 9 June 2021 and are signed on its behalf by:
Kai Hsiung
Director
Company Registration No. 01761486
RSA Films Limited
Statement of Changes in Equity
For the year ended 30 September 2020
Page 9
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 October 2018
12
2,910,943
2,910,955
Year ended 30 September 2019:
Loss and total comprehensive income for the year
-
(206,503)
(206,503)
Balance at 30 September 2019
12
2,704,440
2,704,452
Year ended 30 September 2020:
Loss and total comprehensive income for the year
-
(360,347)
(360,347)
Balance at 30 September 2020
12
2,344,093
2,344,105
RSA Films Limited
Statement of Cash Flows
For the year ended 30 September 2020
Page 10
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
21
158,244
(2,009,750)
Income taxes refunded/(paid)
44,421
(294)
Net cash inflow/(outflow) from operating activities
202,665
(2,010,044)
Investing activities
Purchase of tangible fixed assets
(3,298)
(13,693)
Interest received
13,672
5,875
Net cash generated from/(used in) investing activities
10,374
(7,818)
Net cash used in financing activities
-
-
Net increase/(decrease) in cash and cash equivalents
213,039
(2,017,862)
Cash and cash equivalents at beginning of year
1,151,051
3,168,913
Cash and cash equivalents at end of year
1,364,090
1,151,051
RSA Films Limited
Notes to the Financial Statements
For the year ended 30 September 2020
Page 11
1
Accounting policies
Company information
RSA Films Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
42-44 Beak Street, London, United Kingdom, W1F 9RH.
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 pound.
The financial statements have been prepared under the historical cost convention, which include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
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. Film Production stopped during lockdown but has now restarted and opportunities from both the UK and overseas are now arising. This together with the strong financial position of the group pre-coronavirus means the directors view the future with optimism, the company will have sufficient funds to settle all of its liabilities as they fall due for at least 12 months from signing the financial statements. In the event of further disruption to the business in the future and sales are impacted then the company will consider cost cutting measures in order to ensure the long term viability of the business.
true
1.3
Turnover / Revenue
Revenue
is recognised at the fair value of the consideration received or receivable for
production
services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
Revenue from production contracts 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 measured by shoot days. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
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.
1.4
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 land and buildings
33% straight line
Plant and equipment
20% straight line
Fixtures and fittings
33% straight line
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
1
Accounting policies
(Continued)
Page 12
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
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
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.
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.
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.
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.
1.6
Work in progress
Work in progress represents costs incurred on productions which are shot post year end and is valued at the lower of cost and net realisable value.
1.7
Cash at bank and in hand
Cash at bank and in hand
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 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.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
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.
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
1
Accounting policies
(Continued)
Page 13
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.
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.
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.
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
1
Accounting policies
(Continued)
Page 14
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, 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
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts 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.
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 though 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 direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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.
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
1
Accounting policies
(Continued)
Page 15
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 and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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.
1.13
Leases
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 except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
1
Accounting policies
(Continued)
Page 16
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 are included in the profit and loss account for the period.
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 would were to be pulled.
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.
Depreciation
The annual depreciation charge for property, plant and equipment 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 9 for the carrying amount of the property, plant and equipment.
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
Page 17
3
Turnover and other revenue
2020
2019
£
£
Turnover analysed by class of business
Production services
18,322,261
20,252,886
2020
2019
£
£
Other significant revenue
Interest income
13,672
5,875
Grants received
225,976
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
16,174,522
11,700,789
Europe
994,063
5,386,179
USA
1,153,676
1,624,509
Rest of the World
-
1,541,409
18,322,261
20,252,886
4
Operating loss
2020
2019
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange gains
(8,703)
(48,904)
Government grants
(225,976)
Fees payable to the company's auditor for the audit of the company's financial statements
14,750
14,750
Depreciation of owned tangible fixed assets
14,330
13,036
Operating lease charges
274,561
280,000
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
Page 18
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Management and administration
10
9
Production
23
23
33
32
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
2,383,454
2,343,117
Social security costs
307,472
278,902
Pension costs
34,360
24,007
2,725,286
2,646,026
6
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
315,246
401,958
Company pension contributions to defined contribution schemes
2,629
2,105
317,875
404,063
Remuneration disclosed above include the following amounts paid to the highest paid director:
2020
2019
£
£
Remuneration for qualifying services
225,817
240,000
Company pension contributions to defined contribution schemes
1,315
1,053
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
Page 19
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Interest on bank deposits
4,769
5,581
Other interest income
8,903
294
Total income
13,672
5,875
8
Taxation
2020
2019
£
£
Current tax
Adjustments in respect of prior periods
(44,127)
Deferred tax
Origination and reversal of timing differences
(1,259)
863
Changes in tax rates
(302)
Total deferred tax
(1,561)
863
Total tax credit
(1,561)
(43,264)
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Loss before taxation
(361,908)
(249,767)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
(68,763)
(47,456)
Tax effect of expenses that are not deductible in determining taxable profit
4,977
11,799
Tax effect of income not taxable in determining taxable profit
(35,460)
Unutilised tax losses carried forward
97,838
36,696
Adjustments in respect of prior years
(44,127)
Group relief
2,297
Permanent capital allowances in excess of depreciation
(153)
(2,473)
Taxation credit for the year
(1,561)
(43,264)
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
Page 20
9
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 October 2019
17,057
140,191
201,511
358,759
Additions
3,298
3,298
At 30 September 2020
17,057
140,191
204,809
362,057
Depreciation and impairment
At 1 October 2019
17,057
140,191
177,747
334,995
Depreciation charged in the year
14,330
14,330
At 30 September 2020
17,057
140,191
192,077
349,325
Carrying amount
At 30 September 2020
12,732
12,732
At 30 September 2019
23,764
23,764
10
Work in Progress
2020
2019
£
£
Work in progress
105,732
231,189
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
Page 21
11
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
1,522,502
1,785,142
Corporation tax recoverable
44,421
Amounts due from group undertakings
230,073
30,000
Other debtors
1,802,028
2,117,861
Prepayments and accrued income
887,735
658,618
4,442,338
4,636,042
Deferred tax asset (note 15)
944
4,443,282
4,636,042
12
Current asset investments
2020
2019
£
£
Unlisted investments
500
500
13
Creditors: amounts falling due within one year
2020
2019
£
£
Trade creditors
266,055
444,744
Other taxation and social security
484,477
144,100
Other creditors
659,693
967,270
Accruals and deferred income
2,172,006
1,781,363
3,582,231
3,337,477
14
Provisions for liabilities
2020
2019
Notes
£
£
Deferred tax liabilities
15
617
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
Page 22
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2020
2019
2020
2019
Balances:
£
£
£
£
Accelerated capital allowances
-
617
944
-
2020
Movements in the year:
£
Liability at 1 October 2019
617
Credit to profit or loss
(1,561)
Asset at 30 September 2020
(944)
The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
16
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
34,360
24,007
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.
17
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
12 Ordinary shares of £1 each
12
12
12
12
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
Page 23
18
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:
2020
2019
£
£
Within one year
280,000
163,333
Between two and five years
443,333
723,333
163,333
Lessor
The company sublets surplus office space in its business premises.
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2020
2019
£
£
Within one year
202,792
110,706
Between two and five years
314,621
517,413
110,706
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
Page 24
19
Related party transactions
RSA Films Limited has taken the exemption to disclose related party transactions under the same 100% control in accordance with FRS102 - Section 33 "Related Party Disclosures" paragraph 33.7.
During the year RSA Films Limited made sales of £87,387 (2019: £605,488) to RSA Films, Inc, a company incorporated in the United States of America and a related party by virtues of common ownership. RSA Films, Inc. also made sales of £nil (2019: £nil) to RSA Films Limited. During the year RSA Films Limited recharged costs of £952,602 (2019: £1,275,886) to RSA Films, Inc. and RSA Films, Inc. recharged costs of £71,586 (2019: £103,560) to RSA Films Limited. At the year end a balance of £159,506 (2019: £1,578,798) was owed from RSA Films, Inc.
During the year RSA Films Limited made sales of £
96,407
(201
9
: £76,799) to Scott Free Films Limited, a related party by virtue of common directorship. Scott Free Films Limited also made sales of £
116,280
(201
9
: £54,511) to RSA Films Limited. During the year RSA Films Limited also charged a license fee of £17,500 (201
9
: £17,500) to Scott Free Films Limited. At the year end a balance of £
3,211
was owed
from
Scott Free Films Limited (201
9
: £27,737 was owed to the company)
.
At the year end a balance of £11,038 (201
9
: £11,038) was owed from Black Dog Films Limited, a related party by virtue of common directorship. There were no transactions with Black Dog Films Limited during the year.
During the year RSA Films Limited recharged costs of £
nil
(201
9:
£363,762) to Ridley Scott Creative BV, a related party by virtue of common directorship.
During the year RSA Films Limited made sales of £
221,738
(201
9
: £
nil
)
At the year end a balance of £323,246 (2019: £363,762) was owed from Ridley Scott Creative BV.
During the year Jordan Scott, a director of the group, received director fees of £19,000 (2019: £10,000), and received profit share payments of £11,000 (2019: £nil). At the year end there was an outstanding balance included within other creditors of £1,698 (2019: £13,721) owed to Jordan Scott.
At the year end there was an outstanding balance included within other creditors of £1,917 (2019: £1,917) owed to Luke Scott.
During the year Jake Scott, a related party by virtue of being a sibling of the groups director's, received director fees of £424,000 (2019: £135,000), and received profit share payments of £61,927 (2019: £43,483) through Knockdown Ginger. At the year end there was an outstanding balance included within other creditors of £38,664 owed to Jake Scott (2019: £16,255).
20
Controlling party
The company is controlled by RSA Films (Holdings) Limited, its immediate and ultimate parent company.
A copy of the group's consolidated financial statements can be obtained from the registered office of RSA Films (Holdings) Limited: 42-44 Beak Street, London, W1F 9RH.
There is no ultimate controlling party.
RSA Films Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2020
Page 25
21
Cash generated from operations
2020
2019
£
£
Loss for the year after tax
(360,347)
(206,503)
Adjustments for:
Taxation credited
(1,561)
(43,264)
Investment income
(13,672)
(5,875)
Depreciation and impairment of tangible fixed assets
14,330
13,036
Movements in working capital:
Decrease/(increase) in stock
125,457
(173,226)
Decrease in debtors
112,233
246,076
Increase/(decrease) in creditors
281,804
(1,839,994)
Cash generated from/(absorbed by) operations
158,244
(2,009,750)
2020-09-30
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false
CCH Software
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Deborah Garvey
Kai Hsiung
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