Company Registration No. 14088282 (England and Wales)
Merman-Dreamland Limited
Financial statements
for the period ended 31 January 2023
Pages for filing with the registrar
Merman-Dreamland Limited
Contents
Page
Income statement
Statement of financial position
1
Notes to the financial statements
2 - 8
Merman-Dreamland Limited
Statement of financial position
As at 31 January 2023
Page 1
2023
Notes
£
£
Current assets
Debtors
5
897,486
Cash at bank and in hand
7,486
904,972
Creditors: amounts falling due within one year
6
(904,971)
Net current assets
1
Capital and reserves
-
Called up share capital
9
1
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 13 July 2023 and are signed on its behalf by:
Clelia Mountford
Director
Company Registration No. 14088282 (England and Wales)
Merman-Dreamland Limited
Notes to the financial statements
For the period ended 31 January 2023
Page 2
1
Accounting policies
Company information
Merman-Dreamland Limited is a private company limited by shares incorporated in England and Wales. The registered office is 202 Blackfriars Road, London, SE1 8NJ.
1.1
Reporting period
The company incorporated on 5 May 2022 and its period end is 31 January 2023 to align the stage of completion with the delivery of the programme. The current period therefore covers less than one year.
1.2
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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.
1.3
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4
Turnover
In respect of long-term contracts for ongoing services, turnover represents the value of work done in the period, including estimates for amounts not invoiced. Value of work done in respect of long-term contracts and contracts for ongoing services is determined by reference to the stage of completion.
The "percentage of completion method" is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the period in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are represented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.5
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.
Merman-Dreamland Limited
Notes to the financial statements (continued)
For the period ended 31 January 2023
1
Accounting policies (continued)
Page 3
1.6
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 statement of financial position 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, 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.
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, 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 payments 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. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.7
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.
Merman-Dreamland Limited
Notes to the financial statements (continued)
For the period ended 31 January 2023
1
Accounting policies (continued)
Page 4
1.8
Taxation
The tax credit represents the sum of the tax currently recoverable and deferred tax.
Current tax
The tax currently recoverable is based on relievable losses arising in the year as the result of High End Television tax relief legislation. Relievable losses differ from net losses as reported in the statement of comprehensive income because they include an additional deduction relating to qualifying television development expenditure and exclude items of income or expense that are taxable or deductible in other periods, as well as items that are never taxable or deductible. The company's tax position is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
1.9
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.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
2
Critical accounting 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.
Merman-Dreamland Limited
Notes to the financial statements (continued)
For the period ended 31 January 2023
2
Critical accounting judgements and key sources of estimation uncertainty (continued)
Page 5
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.
Tax credit estimate
The key accounting estimate within the financial statements for this company is the valuation of the high-end TV tax credit available. The estimate is based on the assessment of the value of qualifying expenditure as per HMRC legislations and guidance plus assessment of the qualification of the underlying production as eligible for the tax relief.
3
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2023
Number
Total
15
4
Taxation
2023
£
Current tax
UK corporation tax on profits for the current period
(797,198)
Merman-Dreamland Limited
Notes to the financial statements (continued)
For the period ended 31 January 2023
4
Taxation (continued)
Page 6
The actual credit for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
2023
£
Loss before taxation
(797,198)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00%
(151,468)
Enhanced losses arising from the film tax credit
(605,475)
Difference between the rate of corporation tax and the rate of relief under the film tax credit
(191,328)
Loss carried forward
151,073
Taxation credit for the period
(797,198)
5
Debtors
2023
Amounts falling due within one year:
£
Corporation tax recoverable
797,198
Amounts owed by group undertakings
37,122
Other debtors
63,166
897,486
6
Creditors: amounts falling due within one year
2023
£
Bank loans
719,421
Trade creditors
52,947
Other creditors
132,603
904,971
Merman-Dreamland Limited
Notes to the financial statements (continued)
For the period ended 31 January 2023
Page 7
7
Loans and overdrafts
2023
£
Bank loans
719,421
Payable within one year
719,421
The loan is secured by fixed and floating charges over all the property or undertaking of the company.
8
Retirement benefit schemes
2023
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
594
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.
9
Called up share capital
2023
2023
Ordinary share capital
Number
£
Issued and fully paid
Ordinary shares of £1 each
1
1
10
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Isla MacGillivray
Statutory Auditors:
Saffery Champness LLP
Merman-Dreamland Limited
Notes to the financial statements (continued)
For the period ended 31 January 2023
Page 8
11
Related party transactions
The company has taken advantage of the exemption under paragraph 33.1a of FRS 102 from disclosing transactions entered into between two or more members of a group, where any subsidiary undertaking which is party to the transaction is wholly owned by a member of that group.
12
Parent company
The company's immediate parent company is Merman Television Ltd, a company registered in England and Wales.