Company Registration No. 05801088 (England and Wales)
Creative Artists Agency UK Limited
Annual report and financial statements
For the year ended 30 September 2022
55 L
oudoun Road
St J
ohn's Wood
Lon
don NW8 0DL
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
COMPANY INFORMATION
Directors
R Light
J M Freedman
J E Burtson
Company number
05801088
Registered office
12 Hammersmith Grove
London
United Kingdom
W6 7AP
Auditor
MGR Weston Kay LLP
55 Loudoun Road
St John's Wood
London
NW8 0DL
Bankers
Barclays Bank Plc
Business Services
Level 27
1 Churchill Place
London
E14 5HP
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 1 -
The directors present the strategic report for the year ended 30 September 2022.
Fair review of the business
The company made a pre-tax loss of £2,575,107 (2021: £7,446,959) for the year. The principal activity of the company continues to be within media and entertainment, particularly that of booking agents for artists within the live media and entertainment industry.
Risks to the business and the wider industry
The principal risks and uncertainties facing the Company are primarily those inherent in the Media and Entertainment industry. As well as underlying economic factors, the Company’s income is largely dependent on the continued popularity of the live music scene.
Post COVID 19 the company has started to see an increase in business activities which is reflected in the year on year increase in Turnover.
Post year end, the business has continued on the growth trajectory and the directors are pleased with the recovery the business continues to make.
Key performance indicators
The directors monitor the performance of the business using various Key Performance Indicators ("KPIs"). The main KPIs were:
Turnover increased by 485% (2021: decreased by 38%) compared to the previous year.
Operating loss decreased by 64% to £2,676,172 (2021: operating loss increased by 6% to £7,421,209) compared to the previous year.
Turnover in any year is susceptible to the activities of its clients, and there will be occasions where this can lead to significant fluctuations over the company's accounting years. The underlying client base is increasing and the company is able to withstand these movements.
J M Freedman
Director
29 September 2023
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 2 -
The directors present their annual report and financial statements for the year ended 30 September 2022.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R Light
M Rubel
(Resigned 13 April 2022)
J M Freedman
J E Burtson
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Financial instruments
The company has a normal level of exposure to price, credit and cash flow risk arising from trading activities which are conducted in Sterling. The company does not enter into any lending transactions.
Liquidity risk
The directors monitor the monetary requirements of the company to ensure that sufficient funds are available to enable the company to meet its obligations as they fall due.
Future developments
The directors are continually exploring ways of exploiting the trends within the industry for the benefit of the company including increasing its portfolio of artists within the entertainment industry.
Going concern
As noted in the strategic report, the company continues to recover from the impact of the COVID-19 pandemic. Although the company continues to experience an increase in its level of activities, the directors have concluded that the commitment of the wider CAA group to provide financial support is a prudent step to provide additional assurance over the company's ability to continue as a going concern. The directors have received a letter from CAA Holdings, LLC, the company's intermediate parent undertaking, indicating that it will provide the company with such financial support as is necessary in order to allow the company to meet its obligations as they fall due, for a period of at least 12 months from the date of this report.
The forecasts for CAA Holdings, LLC show that the CAA Holdings LLC group will continue to generate profits and positive cash inflows for a period of at least 12 months from the date of this report, including in stress-test scenarios with plausible reductions in revenue.
Taking into account the position of the intermediate parent CAA Holdings, LLC and the continued recovery post year end, the directors have a reasonable expectation that the Company has adequate resources and support 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.
Auditor
MGR Weston Kay LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 3 -
Statement of directors' responsibilities
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.
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
J M Freedman
Director
29 September 2023
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CREATIVE ARTISTS AGENCY UK LIMITED
- 4 -
Opinion
We have audited the financial statements of Creative Artists Agency UK Limited for the year ended 30 September 2022 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes 1 to 22, 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 2022 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 below. 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 and financial statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this 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 the other information, we are required to report that fact.
We have nothing to report in this regard.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CREATIVE ARTISTS AGENCY UK LIMITED
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and 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 identified material misstatements in the strategic report or directors’ report.
We have nothing to report in respect of the following matters in relation to which 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 set out on page 4, 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CREATIVE ARTISTS AGENCY UK LIMITED
- 6 -
We considered the nature of the company's industry and control environments, and reviewed the company's documentation relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.
We obtained an understanding of the legal and regulatory frameworks that the company operates in, and identified the key laws and regulations that:
Had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Companies Act, pensions legislation, and tax legislation; and
Do not have a direct effect on the financials but compliance which may be fundamental to the company's ability to operate or to avoid a material penalty.
We discussed amongst the audit engagement team the opportunities and incentives that may exist within the organisation for fraud and how and where the fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for fraud in the following areas and set out specific procedures performed to address it as described below:
Deliberate manipulation of revenue to improve the perception of the company's performance.
We have addressed this risk through specific testing, on a sample basis, of current year invoices to ensure validity. In addition, we have reviewed contracts and agreements, on a sample basis, where revenues are received on an instalment basis over a period of time to ensure that revenues are correctly included in the financial statements and correctly accrued/deferred in accordance with the contract.
Overstatement of intercompany transactions to improve the Company's position.
We addressed this risk through specific testing and verification, on a sample basis, of the current year management charges, recharge workings and agreement of all intercompany balances.
In addition to the above, our procedures to respond to the risks identified include the following:
No significant issues were identified during our testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CREATIVE ARTISTS AGENCY UK LIMITED
- 7 -
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.
Nicholas Muir BA (Econ) FCA (Senior Statutory Auditor)
for and on behalf of MGR Weston Kay LLP
Chartered Accountants
Statutory Auditor
55 Loudoun Road
St John's Wood
London
NW8 0DL
29 September 2023
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
19,598,561
3,348,301
Administrative expenses
(22,866,186)
(11,414,167)
Other operating income
591,453
644,657
Operating loss
5
(2,676,172)
(7,421,209)
Interest receivable and similar income
8
101,065
Interest payable and similar expenses
7
(25,750)
Loss before taxation
(2,575,107)
(7,446,959)
Taxation
9
266,637
1,414,465
Loss for the financial year
(2,308,470)
(6,032,494)
Other comprehensive income
-
-
Total comprehensive income for the year
(2,308,470)
(6,032,494)
The statement of comprehensive income 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 statement of comprehensive income.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
BALANCE SHEET
AS AT
30 SEPTEMBER 2022
30 September 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,769,361
1,925,847
Current assets
Debtors
11
10,056,753
4,489,316
Cash at bank and in hand
10,966,604
1,957,897
Cash held on behalf of clients
31,182,808
14,961,942
52,206,165
21,409,155
Creditors: amounts falling due within one year
12
(56,247,352)
(24,207,697)
Net current liabilities
(4,041,187)
(2,798,542)
Total assets less current liabilities
(2,271,826)
(872,695)
Creditors: amounts falling due after more than one year
13
(1,868,639)
(983,306)
Provisions for liabilities
(119,066)
(95,060)
Net liabilities
(4,259,531)
(1,951,061)
Capital and reserves
Called up share capital
17
1
1
Retained earnings
(4,259,532)
(1,951,062)
Total equity
(4,259,531)
(1,951,061)
The financial statements were approved by the board of directors and authorised for issue on 29 September 2023 and are signed on its behalf by:
J M Freedman
Director
Company Registration No. 05801088
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 10 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 October 2020
1
4,081,432
4,081,433
Year ended 30 September 2021:
Loss and total comprehensive income for the year
-
(6,032,494)
(6,032,494)
Balance at 30 September 2021
1
(1,951,062)
(1,951,061)
Year ended 30 September 2022:
Loss and total comprehensive loss for the year
-
(2,308,470)
(2,308,470)
Balance at 30 September 2022
1
(4,259,532)
(4,259,531)
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 11 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
21
24,157,346
(4,286,632)
Interest paid
(25,750)
Income taxes refunded
1,267,366
986,194
Net cash inflow/(outflow) from operating activities
25,424,712
(3,326,188)
Investing activities
Purchase of tangible fixed assets
(296,204)
(42,708)
Interest received
101,065
Net cash used in investing activities
(195,139)
(42,708)
Financing activities
Payment of finance leases obligations
(8,255)
Loan financing received
-
5,999,940
Net cash (used in)/generated from financing activities
-
5,991,685
Net increase in cash and cash equivalents
25,229,573
2,622,789
Cash and cash equivalents at beginning of year
16,919,839
14,297,050
Cash and cash equivalents at end of year
42,149,412
16,919,839
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 12 -
1
Accounting policies
Company information
Creative Artists Agency UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 12 Hammersmith Grove, London, United Kingdom, W6 7AP.
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 amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
As noted in the strategic report, the company continues to recover from the impact of the COVID-19 pandemic. Although the company continues to experience an increase in its level of activities, the directors have concluded that the commitment of the wider CAA group to provide financial support is a prudent step to provide additional assurance over the company's ability to continue as a going concern. The directors have received a letter from CAA Holdings, LLC, the company's intermediate parent undertaking, indicating that it will provide the company with such financial support as is necessary in order to allow the company to meet its obligations as they fall due, for a period of at least 12 months from the date of this report.true
The forecasts for CAA Holdings, LLC show that the CAA Holdings LLC group will continue to generate profits and positive cash inflows for a period of at least 12 months from the date of this report, including in stress-test scenarios with plausible reductions in revenue.
Taking into account the position of the intermediate parent CAA Holdings, LLC and the continued recovery post year end, the directors have a reasonable expectation that the Company has adequate resources and support 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.
1.3
Turnover
Turnover represents amounts receivable for services net of Value Added Tax. Turnover is recognised once a show has been performed or stage of a contract has been completed. The following criteria must also be met before revenue is recognised.
Turnover from the supply of services is recognised on delivery of those services. When turnover represents the value of the services provided under contracts it is phased equally over the contract at the value of the consideration due.
When a contract has only been partially completed at the balance sheet date, turnover represents the value of the service provided to date based on a proportion of the total contract value. When payments are received from customers in advance of services provided, the amounts are recorded as Deferred Income and included as part of Creditors due within one year or after more than one year.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 13 -
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:
Land and buildings leasehold
Over the life of the lease
Fixtures and fittings
20% straight line
Office equipment
25% straight line
Construction in progress and not in use is not depreciated until the assets are placed in service and are in a condition to be used.
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 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).
Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
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 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 in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
1.6
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.
1.7
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 are classified into specified categories. The classification depends on the nature and purpose of the financial asset and is determined at the time of recognition.
Financial assets are initially measured at fair value plus transaction costs, other than those classified as fair value through profit and loss, which are measured at fair value.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 14 -
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.
Loans and receivables
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any 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 of the investment have been affected.
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.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 15 -
Financial liabilities
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 subsequently 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 through 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.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transactions costs. They are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the net carrying amount on initial recognition.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs.
1.9
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.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. 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.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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 leases asset are consumed.
1.13
Government grants
Government grants are recognised at the fair value of the asset received 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.
1.14
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.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 17 -
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. There were no such judgements, estimates or assumptions required in the financial statements for the year ended 30 September 2022.
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.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Commissions
19,598,561
3,348,301
2022
2021
£
£
Other revenue
Interest income
101,065
-
Grants received
-
239,698
Management fee
336,025
404,959
Sundry income
255,428
-
The total turnover of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
4
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
57,300
31,700
5
Operating loss
2022
2021
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
2,723,235
(21,956)
Government grants
-
(239,698)
Depreciation of owned tangible fixed assets
452,690
532,871
Operating lease charges
1,099,493
606,560
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
5
Operating loss
(Continued)
- 18 -
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 £2,723,235 (2021 - £21,956 credit).
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Total staff
86
77
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
14,128,185
8,032,117
Social security costs
1,754,702
1,040,682
Pension costs
92,919
73,956
15,975,806
9,128,927
The directors are not remunerated by the company and they provide negligible qualifying services.
7
Interest payable and similar expenses
2022
2021
£
£
Other finance costs:
Other interest
25,750
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
101,065
Total interest income for financial assets that are not held at fair value through profit or loss is £101,065 (2021: £Nil).
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(1,366,194)
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
9
Taxation
2022
2021
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
(266,637)
(48,271)
Total tax credit
(266,637)
(1,414,465)
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:
2022
2021
£
£
Loss before taxation
(2,575,107)
(7,446,959)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(489,270)
(1,414,922)
Tax effect of expenses that are not deductible in determining taxable profit
330,525
101,702
Unutilised tax losses carried forward
64,820
Group relief
196,267
Capital allowances
(102,342)
(52,974)
Deferred tax timing differences
(266,637)
(48,271)
Taxation credit for the year
(266,637)
(1,414,465)
Tax losses surrendered
Tax losses of £1,071,374 are being surrendered to a group company.
Factors that may affect future tax charges
Deferred tax has been calculated using the average deferred tax rate of 22%. Liability has been split 50:50 between 19% and 25% as the next accounting period straddles 1 April 2023.
A proposed change in the standard rate of UK corporation tax received Royal Assent on 14 June 2021 to increase the rate from 19% to 25% with effect from 1 April 2023.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 20 -
10
Tangible fixed assets
Land and buildings leasehold
Construction in progress
Fixtures and fittings
Office equipment
Total
£
£
£
£
£
Cost
At 1 October 2021
2,828,393
573,558
944,418
4,346,369
Additions
33,700
72,227
190,277
296,204
At 30 September 2022
2,828,393
33,700
645,785
1,134,695
4,642,573
Depreciation and impairment
At 1 October 2021
1,129,549
502,150
788,823
2,420,522
Depreciation charged in the year
290,092
62,282
100,316
452,690
At 30 September 2022
1,419,641
564,432
889,139
2,873,212
Carrying amount
At 30 September 2022
1,408,752
33,700
81,353
245,556
1,769,361
At 30 September 2021
1,698,844
71,408
155,595
1,925,847
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
584,748
85,115
Corporation tax recoverable
364,891
1,632,257
Amounts due from fellow group undertakings
1,654,016
1,942,268
Other debtors
2,747,466
18,037
Prepayments and accrued income
4,414,989
811,639
9,766,110
4,489,316
Deferred tax asset (note 15)
290,643
10,056,753
4,489,316
Trade debtors disclosed above are classified as loans and receivables and are therefore measured at amortised cost.
Amounts due from group undertakings are interest free and are repayable on demand.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 21 -
12
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Trade creditors
267,285
465,593
Amounts owed to group undertakings
20,242,082
7,028,573
Taxation and social security
1,516,530
604,161
Deferred income
14
314,981
134,329
Other creditors
31,223,549
14,983,845
Accruals
2,682,925
991,196
56,247,352
24,207,697
Included in bank balances are £31,182,808 (2021: £14,961,942) of funds held in client fund bank accounts. The balances which are included in other creditors shown above in relation to the client funds are £31,182,808 (2021: £14,961,942).
Amounts owed to group undertakings are interest free and are repayable on demand.
13
Creditors: amounts falling due after more than one year
2022
2021
£
£
Accruals and deferred income
1,868,639
983,306
14
Deferred income
2022
2021
£
£
Other deferred income
314,981
134,329
15
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
2022
2021
2022
2021
Balances:
£
£
£
£
Accelerated capital allowances
119,066
95,060
-
-
Deferred tax asset
-
-
290,643
-
119,066
95,060
290,643
-
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 22 -
16
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
92,919
73,956
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
2022
2021
Ordinary share capital
£
£
Issued, authorised, allotted and fully paid
100 Ordinary shares of 1p each
1
1
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:
2022
2021
£
£
Within one year
1,231,785
1,231,785
Between two and five years
4,675,483
4,927,138
In over five years
980,130
5,907,268
7,139,053
19
Related party transactions
The company has taken advantage of the exemption available in FRS 102 Section 33 'Related party disclosures' not to disclose transactions entered into between two or more members of a group where a subsidiary which is a party to the transaction is wholly owned by such a member.
20
Ultimate controlling party
The immediate parent undertaking is CAIC, LLC, whose address is 2000 Avenue of the Stars, Los Angeles, CA90067, United States of America.
The ultimate parent company is TPG VI Constellation, L.P., a Delaware Limited Partnership (LP), whose address is 301 Commerce Street, Suite 3300, Fort Worth, TX 76102, United States of America.
CREATIVE ARTISTS AGENCY UK LIMITED
Creative Artists Agency UK Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 23 -
21
Cash generated from operations
2022
2021
£
£
Loss for the year after tax
(2,308,470)
(6,032,494)
Adjustments for:
Taxation credited
(266,637)
(1,414,465)
Finance costs
25,750
Investment income
(101,065)
Depreciation and impairment of tangible fixed assets
452,690
532,871
Movements in working capital:
(Increase) in debtors
(6,544,160)
(45,834)
Increase in creditors
32,744,336
2,513,211
Increase in deferred income
180,652
134,329
Cash generated from/(absorbed by) operations
24,157,346
(4,286,632)
22
Analysis of changes in net funds
1 October 2021
Cash flows
30 September 2022
£
£
£
Cash at bank and in hand
16,919,839
25,229,573
42,149,412
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