Company Registration No. 09094922 (England and Wales)
ENTERTAINMENT ALLIANCE (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
ENTERTAINMENT ALLIANCE (UK) LIMITED
COMPANY INFORMATION
Directors
Mr I Doyle
Mr D Stevens
Company number
09094922
Registered office
c/o Hentons
Northgate
118 North Street
Leeds
West Yorkshire
UK
LS2 7PN
Auditor
Henton & Co LLP
Northgate
118 North Street
Leeds
West Yorkshire
LS2 7PN
Business address
Unit C, Floor 1,Nepshaw Lane South
Gildersome
Morley
Leeds
West Yorkshire
United Kingdom
LS27 7JQ
ENTERTAINMENT ALLIANCE (UK) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 5
Statement of comprehensive income
6
Balance sheet
7
Statement of changes in equity
8
Notes to the financial statements
9 - 20
ENTERTAINMENT ALLIANCE (UK) LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 JUNE 2019
- 1 -
The directors present the strategic report for the period ended 30 June 2019.
Review of the business
The principal activity of the company continued to be that of a distributor of home entertainment products.
Principal risks and uncertainties
The management of the business and the execution of the company’s strategy are subject to a number of risks and uncertainties. The company's principal risk and uncertainty is operating in a challenging market. Risks are reviewed by the board and appropriate processes put in place to monitor and mitigate them.
Development and performance
The company continued to develop its proposition to content partners and retailers alike and realign its operations accordingly.
Key performance indicators
The reduction in turnover and profit highlights the core challenges of both the retail and entertainment market as a whole.
Future plans
A continued review of approach to managing the business, its content partners and customer base will be the major focus in this period as both the content market consolidates into fewer, bigger suppliers and the physical market continues to be impacted by the effects of digital sales in favoured competition to DVDs & CDs by its content owners resulting in reduced engagement by physical retailers.
Mr D Stevens
Director
12 October 2020
ENTERTAINMENT ALLIANCE (UK) LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 JUNE 2019
- 2 -
The directors present their report and financial statements for the period ended 30 June 2019.
Principal activities
The principal activity of the company continued to be that of the distribution of home entertainment products.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Mr I Doyle
Mr D Stevens
Mr P Fitzgerald
(Resigned 1 May 2020)
Results and dividends
The results for the period are set out on page 6.
Ordinary dividends were paid amounting to £144,697. The directors do not recommend payment of a final dividend.
Future developments
The company has chosen to set out in the Strategic Report information required in the Directors' Report specifically regarding future developments.
Auditor
The auditor, Henton & Co LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
ENTERTAINMENT ALLIANCE (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
- 3 -
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
Mr D Stevens
Director
12 October 2020
ENTERTAINMENT ALLIANCE (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ENTERTAINMENT ALLIANCE (UK) LIMITED
- 4 -
Opinion
We have audited the financial statements of Entertainment Alliance (UK) Limited (the 'company') for the period ended 30 June 2019 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 June 2019 and of its profit for the period then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial period 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.
ENTERTAINMENT ALLIANCE (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ENTERTAINMENT ALLIANCE (UK) LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of 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'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
This report is made solely to the company's member 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 member 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 member for our audit work, for this report, or for the opinions we have formed.
Chris Howitt (Senior Statutory Auditor)
for and on behalf of Henton & Co LLP
13 October 2020
Chartered Accountants
Statutory Auditor
Northgate
118 North Street
Leeds
West Yorkshire
LS2 7PN
ENTERTAINMENT ALLIANCE (UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2019
- 6 -
Period
Year
ended
ended
30 June
31 December
2019
2017
Notes
£
£
Turnover
3
17,546,301
19,624,385
Cost of sales
(15,406,471)
(17,549,092)
Gross profit
2,139,830
2,075,293
Distribution costs
(1,171)
-
Administrative expenses
(1,893,759)
(1,332,156)
Operating profit
4
244,900
743,137
Interest receivable and similar income
7
1,975
417
Interest payable and similar expenses
8
(41,856)
(15,255)
Profit before taxation
205,019
728,299
Tax on profit
9
(46,567)
(142,586)
Profit for the financial period
158,452
585,713
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ENTERTAINMENT ALLIANCE (UK) LIMITED
BALANCE SHEET
AS AT
30 JUNE 2019
30 June 2019
- 7 -
2019
2017
Notes
£
£
£
£
Fixed assets
Intangible assets
11
8,520
9,042
Tangible assets
12
10,939
36,976
19,459
46,018
Current assets
Stocks
13
206,319
831,374
Debtors
14
2,098,153
6,660,308
Cash at bank and in hand
17,141
345,031
2,321,613
7,836,713
Creditors: amounts falling due within one year
15
(1,363,901)
(6,914,014)
Net current assets
957,712
922,699
Total assets less current liabilities
977,171
968,717
Provisions for liabilities
16
(1,438)
(6,739)
Net assets
975,733
961,978
Capital and reserves
Called up share capital
19
100
100
Profit and loss reserves
975,633
961,878
Total equity
975,733
961,978
The financial statements were approved by the board of directors and authorised for issue on 12 October 2020 and are signed on its behalf by:
Mr D Stevens
Director
Company Registration No. 09094922
ENTERTAINMENT ALLIANCE (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2019
- 8 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2017
100
453,077
453,177
Year ended 31 December 2017:
Profit and total comprehensive income for the year
-
585,713
585,713
Dividends
10
-
(76,912)
(76,912)
Balance at 31 December 2017
100
961,878
961,978
Period ended 30 June 2019:
Profit and total comprehensive income for the period
-
158,452
158,452
Dividends
10
-
(144,697)
(144,697)
Balance at 30 June 2019
100
975,633
975,733
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
- 9 -
1
Accounting policies
Company information
Entertainment Alliance (UK) Limited, registration number 09094922, is a private company limited by shares incorporated in England and Wales. The registered office is c/o Henton & Co LLP, Northgate, 118 North Street, Leeds, West Yorkshire, LS2 7PN.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of
Entertainment Alliance (Holdings) Limited. T
hese consolidated financial statements are available from its registered office, Northgate, 118 North Street, Leeds, LS2 7PN
.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Reporting period
The accounts are presented for an 18 month period because the directors of the company felt that the new year end was more preferential for internal reporting requirements. Due to this change the comparative amounts presented in the financial statements (including related notes) are not entirely comparable.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
,
the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
1
Accounting policies
(Continued)
- 10 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation 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:
Software
33% straight line
1.6
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:
Fixtures, fittings & equipment
33% straight line
Computer equipment
33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.7
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). 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.
1.8
Stocks
Stocks
are stated at the lower of cost and
net realisable value.
At each reporting date, an assessment is made for impairment.
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
1
Accounting policies
(Continued)
- 11 -
1.9
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks
and
other short-term liquid investments with original maturities of three months or less
.
1.10
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.
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.
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
1
Accounting policies
(Continued)
- 12 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans
and
loans from
fellow group companies are
recognised at transaction price
.
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 at transaction price
.
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.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
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.
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
1
Accounting policies
(Continued)
- 13 -
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.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense
.
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.16
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.
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.
Key areas of judgement and estimation relate to provisions against stocks and doubtful debt, but the directors are satisfied that there is no significant risk of material misstatement arising.
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
- 14 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2019
2017
£
£
Turnover analysed by class of business
Distribution of home entertainment products
17,515,382
19,557,385
Management charges
-
67,000
17,546,301
19,624,385
Analysis per statutory database
17,515,382
19,624,385
Statutory database analysis does not agree to the trial balance by:
30,919
-
2019
2017
£
£
Other significant revenue
Interest income
1,975
417
2019
2017
£
£
Turnover analysed by geographical market
United Kingdom
17,515,382
19,624,385
Analysis per statutory database
17,515,382
19,624,385
Statutory database analysis does not agree to the trial balance by:
30,919
-
4
Operating profit
2019
2017
Operating profit for the period is stated after charging:
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
2,229
-
Fees payable to the company's auditor for the audit of the company's financial statements
-
9,500
Depreciation of owned tangible fixed assets
26,037
11,169
Amortisation of intangible assets
9,979
1,458
Cost of stocks recognised as an expense
15,406,471
17,549,092
Operating lease charges
129,673
89,258
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
- 15 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2019
2017
Number
Number
Administration
14
15
Their aggregate remuneration comprised:
2019
2017
£
£
Wages and salaries
908,741
656,329
Social security costs
100,084
74,377
Pension costs
27,611
6,574
1,036,436
737,280
6
Directors' remuneration
2019
2017
£
£
Remuneration for qualifying services
2,220
2,383
7
Interest receivable and similar income
2019
2017
£
£
Interest income
Other interest income
1,975
417
8
Interest payable and similar expenses
2019
2017
£
£
Interest on bank overdrafts and loans
60
35
Interest on invoice finance arrangements
41,796
15,220
41,856
15,255
9
Taxation
2019
2017
£
£
Current tax
UK corporation tax on profits for the current period
51,869
135,847
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
9
Taxation
2019
2017
£
£
(Continued)
- 16 -
Deferred tax
Origination and reversal of timing differences
(5,302)
6,739
Total tax charge
46,567
142,586
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
2019
2017
£
£
Profit before taxation
205,019
728,299
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2017: 19.00%)
38,954
138,377
Tax effect of expenses that are not deductible in determining taxable profit
7,818
1,136
Effect of change in corporation tax rate
-
1,669
Deferred tax movement
(5,302)
1,404
S455 taxation charge
5,097
-
Taxation charge for the period
46,567
142,586
10
Dividends
2019
2017
£
£
Interim paid
144,697
76,912
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
- 17 -
11
Intangible fixed assets
Software
£
Cost
At 1 January 2018
10,500
Additions
9,457
At 30 June 2019
19,957
Amortisation and impairment
At 1 January 2018
1,458
Amortisation charged for the period
9,979
At 30 June 2019
11,437
Carrying amount
At 30 June 2019
8,520
At 31 December 2017
9,042
12
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 January 2018 and 30 June 2019
56,121
17,944
74,065
Depreciation and impairment
At 1 January 2018
20,904
16,185
37,089
Depreciation charged in the period
24,522
1,515
26,037
At 30 June 2019
45,426
17,700
63,126
Carrying amount
At 30 June 2019
10,695
244
10,939
At 31 December 2017
35,217
1,759
36,976
13
Stocks
2019
2017
£
£
Home entertainment products
206,319
831,374
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
- 18 -
14
Debtors
2019
2017
Amounts falling due within one year:
£
£
Trade debtors
1,231,470
5,969,951
Other debtors
723,967
252,554
Prepayments and accrued income
142,716
437,803
2,098,153
6,660,308
15
Creditors: amounts falling due within one year
2019
2017
£
£
Trade creditors
799,586
3,325,425
Corporation tax
51,869
135,843
Other taxation and social security
85,510
345,274
Other creditors
35,719
1,528,957
Accruals and deferred income
391,217
1,578,515
1,363,901
6,914,014
16
Provisions for liabilities
2019
2017
Notes
£
£
Deferred tax liabilities
17
1,438
6,739
17
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:
Liabilities
Liabilities
2019
2017
Balances:
£
£
Accelerated capital allowances
1,438
6,739
2019
Movements in the period:
£
Liability at 1 January 2018
6,739
Credit to profit or loss
(5,301)
Liability at 30 June 2019
1,438
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
- 19 -
18
Retirement benefit schemes
2019
2017
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
27,611
6,574
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.
19
Share capital
2019
2017
£
£
Ordinary share capital
Issued and fully paid
100 ordinary shares of £1 each
100
100
20
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:
2019
2017
£
£
Within one year
59,850
59,850
Between two and five years
81,032
210,705
140,882
270,555
ENTERTAINMENT ALLIANCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2019
- 20 -
21
Related party transactions
Transactions with related parties
The directors consider the following entities to be related parties as they are controlled either by a director or directors of the company.
Walk Investments Limited
Market Place Solutions Worldwide LLP
At the period end a balance of £nil (2017: £648,051) was due from Walk Investments Limited. During the year the company made net sales of £2,458,860 to Walk Investments Limited.
At the year end a balance of £35,719 (2017: £35,719) was due to Market Place Solutions Worldwide LLP. During the year the company issued management charges of £nil (2017: £nil) to Market Place Solutions Worldwide LLP.
At the year end the director Mr D Stevens had a loan account balance owed to the company of £265,584 (2017: £50,000). The balance is repayable on demand, interest of £784 (2.5%) has been accrued on this balance.
At the year end the director Mr P Fitzgerald had a loan account balance owed to the company of £291,894 (2017:£10,000). The balance is repayable on demand, interest of £1,191 (2.5%) has been accrued on this balance.
22
Ultimate controlling party
The parent undertaking is Entertainment Alliance (Holdings) Limited, registered office Northgate, 118 North Street, Leeds, LS2 7PN.
The largest and smallest group of undertakings for which group accounts are drawn up and of which the company is a member is Entertainment Alliance (Holdings) Limited. Copies of the accounts can be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
2019-06-30
2018-01-01
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