Mediaworks UK Limited - Period Ending 2021-03-31
Mediaworks UK Limited - Period Ending 2021-03-31
Registration number:
Mediaworks UK Limited
for the
Year Ended 31 March 2021
Mediaworks UK Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Income Statement |
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Statement of Financial Position |
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Statement of Changes in Equity |
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Notes to the Financial Statements |
Mediaworks UK Limited
Company Information
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Directors |
B C Jacobson G Smith M Rutherford D Hoggan |
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Company secretary |
M Rutherford |
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Registered office |
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Solicitors |
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Auditor |
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Mediaworks UK Limited
Strategic Report for the Year Ended 31 March 2021
The directors present their strategic report for the year ended 31 March 2021.
Principal activity
The principal activity of the company is the provision of the complete portfolio of digital marketing services including:
Search Engine Optimisation (SEO) - Aimed at maximising the number of organic visitors to a website. The Mediaworks strategic search approach uses quantifiable insight coupled with creativity to develop unique SEO campaigns that are right for our clients, their brands and their customers.
Website Design/ Web Application Development - Our in-house team of creative professionals design and develop imaginative, effective, secure and resilient websites and web applications using HTML, CSS, React and other web languages.
Performance Marketing – This refers to all “paid advertising” channels including paid search (shown at the top of a search engines) as well a programmatic advertising displayed on 3rd party publishers and social advertising shown on platforms such as Facebook and Instagram. Targeted based on the audience behaviour and demographics, the campaigns focus on driving brand exposure, traffic, revenue and leads.
Conversion Rate Optimisation (CRO) - the process for increasing the percentage of visitors to a website that convert into customers. We use an extensive range of tools and testing methods to analyse the efficacy of a website in relation to its customers and objectives, helping clients to fine-tune the little things that increase sales, enquiries and sign ups.
Public Relations (PR) - Tailored digital PR campaigns that focus on driving brand awareness with the right influencers and top-tier publications, through thought-leading and newsworthy content.
Brand Strategy – using quantified and qualitative insights about a client, its competitors and its customers to develop a long-term plan, including the campaigns necessary for executing that strategy, for the development of a successful brand.
Video - from video strategy to 3D animation and motion graphics, our full video content services help businesses to create visual assets that allow them to grab attention, educate audiences and drive sales.
Results and dividends
The profit for the year after taxation amounted to £1,052,210 (2020: £870,653). Dividends of £363,577 were paid during the year (2020: £213,333) and final dividends of £238,521 were declared but not paid by the balance sheet date (2020: £156,942).
Mediaworks UK Limited
Strategic Report for the Year Ended 31 March 2021 (continued)
Fair review of the business
The business navigated the challenges presented by the COVID-19 global pandemic effectively to maintain revenues at a similar level to the prior year, whilst managing overhead costs effectively to achieve year-on-year growth in profit before tax.
Despite the challenging external landscape over the past twelve months, the business has continued to recruit talented individuals into the agency, growing average headcount from 92 to 105 during the year and cementing our market position as one of the leading digital agencies in the North.
Our commitment to the development of our people, systems and processes has proven invaluable during the last year. The outbreak of the COVID-19 pandemic necessitated a switch to remote home working, which was executed seamlessly and without interruption, thanks in large part to our strategy of adopting cloud-based business systems and investment in the design and implementation of robust processes across all areas of the business.
Our key performance metrics – new business; client retention; cash collection; and staff productivity – have all continued to perform well, which provides us with confidence in the underlying quality of our sales, operations and finance processes as we enter our new financial year. Whilst the business suffered a short-term loss of monthly revenue in the first quarter of the year, due indirectly to the impact of the COVID-19 pandemic on several of our clients’ businesses, the recovery and rate of growth that we have achieved during the second half of the financial year has surpassed even our own expectations.
The demand for digital solutions has never been greater and the pandemic has led many organisations to accelerate their own digital transformation projects. In the last twelve months, we have been appointed to develop strategies for, and manage, multi-channel campaigns for numerous blue-chip brands. The quality of service delivery and performance of our campaigns have received recognition through a variety of industry awards and our accredited status with platforms such as Google, Microsoft Bing and Facebook.
We have continued to develop our product offering to align with the needs of our growing client portfolio, and to ensure that we remain capable of delivering a market-leading, ‘full service’ digital transformation solution to our partners. Notably, during the last year we have established and evolved our brand strategy, PR and video & animation service lines, expanding on our ability to deliver wholly integrated marketing campaigns to our clients, from strategy through to execution.
Innovation remains at the heart of our business and we actively promote a culture of creativity. We devote considerable effort in developing our own intellectual property, including our delivery processes and proprietary software tools. During the last year, we have continued to invest heavily in the development of a proprietary data warehouse and analytical toolset, featuring powerful artificial intelligence, which we are implementing to drive even greater internal efficiencies and powerful insight for our clients.
With strong links to a network of excellent local universities, we believe Mediaworks employs some of the best digital and creative minds in the industry. Along with analytical experts, our delivery team boasts project managers, in-house developers, designers and content creators, who add value with a bespoke approach to each campaign. It is vitally important for us to attract, train and retain high calibre and motivated employees. We are committed to creating opportunities for apprentices and graduates to enter the digital sector and providing career pathways to allow our employees to flourish and reach their full potential.
In summary, the company has enjoyed consistently strong financial and operational performance, despite the significant challenges presented by the global COVID-19 pandemic. The directors are confident that the business can sustain the recent rate of growth, particularly during the second half of the last year, in both our client portfolio and financial results as we enter our new financial year.
Mediaworks UK Limited
Strategic Report for the Year Ended 31 March 2021 (continued)
The company's key financial and other performance indicators during the year were as follows:
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Unit |
2021 |
2020 |
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Turnover |
£ |
5,486,259 |
5,486,877 |
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Average debtor days during the year |
days |
62 |
50 |
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Gross margin |
% |
73 |
72 |
Principal risks and uncertainties
The company’s principal financial instruments comprise cash and cash equivalents. Other financial assets and liabilities, such as trade creditors and trade debtors, arise directly from the company’s operating activities.
The main risks associated with the company’s financial assets and liabilities are set out below.
Interest rate risk
The company retains surplus cash in its bank current account and a floating rate interest bank deposit account. There are no financial creditors. The company’s interest income is therefore affected by movements in interest rates, but not materially. The company does not undertake any hedging activity.
Liquidity risk
The company aims to mitigate liquidity risk by managing cash generated by its operations.
Foreign currency risk
The company does not have any foreign currency transactions (all transactions are denominated in sterling) and therefore is not exposed to any foreign currency risk.
Impact of COVID-19 virus
The company continues to monitor the ongoing developments and has a business continuity plan in place to ensure we minimise the impact of Covid-19 on both our customers and employees.
Approved by the
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Mediaworks UK Limited
Directors' Report for the Year Ended 31 March 2021
The directors present their report and the financial statements for the year ended 31 March 2021.
Directors of the company
The directors who held office during the year were as follows:
Financial instruments
Objectives and policies
See disclosure within the Strategic Report.
Price risk, credit risk, liquidity risk and cash flow risk
See disclosures in the Strategic Report in respect of the financial risk management of the company.
Future developments
Since the end of the year, the Mediaworks group has continued to invest in further geographical expansion, launching new subsidiary offices in Edinburgh and Dublin, with the appointment of highly-regarded industry leaders to spearhead these new regional offices.
Data analytics capability is an area that we have invested heavily into during recent years and shall continue to do so, developing our people, systems and process to deliver best-in-class insight for our clients through intelligent and automated analysis of their data, alongside relevant third-party data sets.
As a direct consequence of the COVID-19 pandemic, we expect to see more businesses seeking to review their digital strategy in light of the impact that the crisis has had on consumer and business behaviour. We believe this will continue to create new opportunities for Mediaworks to support our clients to transform the way in which they engage, communicate and transact with their customers.
With such strong technical capabilities and resource in place, the directors believe we are well positioned to capitalise on the post-pandemic economic recovery and increased demand for digital services and we are confident that we can achieve the ambitious growth forecasts set out in our latest three-year Business Plan.
Whilst continuing to develop our product range, we will aim to grow our market share of top tier clients across the North East, Yorkshire, Scotland and Ireland, alongside major national ‘superbrands’ and online retailers.
Mediaworks UK Limited
Directors' Report for the Year Ended 31 March 2021 (continued)
Going concern
The financial statements have been prepared on a going concern basis.
The company meets its day to day working capital requirements through cash generated from operations. At the year end the company had net current assets of £1.22m (2020 - £1.03m) including cash at bank of £1.34m (2020 - £0.74m). The company is also subject to a debenture securing its parent company bank loan of £1.5m.
The company and group’s forecasts and projections for the next twelve months show that the company should have sufficient headroom from these facilities to be able to continue in operational existence for that period, taking into account reasonable possible changes in trading performance and the potential impact on the business of possible future scenarios arising from the continuing COVID-19 pandemic. This also considers the effectiveness of available measures to assist in mitigating the impact.
In the directors assessment of possible changes they have considered a fall in demand along with potential cost savings. During the year the company has made use of available reliefs put forward by HM Government including furloughing of underutilised staff and deferring VAT payment.
Although the forecast prepared, taking account of the matters above, support the ability of the company to remain a going concern and to be able to trade and meets its debts as they fall due, the full impact of COVID-19 on the economy and the underlying trading assumptions used in forecasting are extremely judgemental and difficult to predict and could be subject to significant variation.
However, based on the factors set out above the directors believe that there is no material uncertainty in relation to going concern and that the company has adequate financial resources to continue in operational existence for at least twelve months from the date of signing the financial statements and
therefore the directors believe it remains appropriate to prepare the financial statements on a going concern basis.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Reappointment of auditor
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of MHA Tait Walker as auditor of the company is to be proposed at the forthcoming Annual General Meeting.
Small companies' provision statement
This report has been prepared in accordance with the small companies' regime under the Companies Act 2006.
Approved by the
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Mediaworks UK Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
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.
Mediaworks UK Limited
Independent Auditor's Report to the Members of Mediaworks UK Limited
Opinion
We have audited the financial statements of Mediaworks UK Limited (the 'company') for the year ended 31 March 2021, which comprise the Income Statement, Statement of Financial Position, 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 Section 1A '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 31 March 2021 and of its profit 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. |
Basis for opinion
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
In auditing the financial statements, we have concluded that the director's 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.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. 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.
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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
Mediaworks UK Limited
Independent Auditor's Report to the Members of Mediaworks UK Limited (continued)
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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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 |
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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 our 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 and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors’ remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities (set out on page 7), 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Mediaworks UK Limited
Independent Auditor's Report to the Members of Mediaworks UK Limited (continued)
• enquiries with management and internal compliance officers about any known or suspected instances of non-compliance with laws and regulations and fraud;
• reviewing board minutes;
• challenging assumptions and judgements made by management in their significant accounting estimates; and
• auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: employment law and compliance with the UK Companies Act and tax legislation.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken 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.
......................................
For and on behalf of
Chartered Accountants
Statutory Auditor
Bulman House
Regent Centre
Newcastle upon Tyne
NE3 3LS
MHA Tait Walker is a trading name of Tait Walker LLP.
Mediaworks UK Limited
Income Statement for the Year Ended 31 March 2021
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Note |
2021 |
2020 |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
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Administrative expenses |
( |
( |
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Other operating income |
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Profit before tax |
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Taxation |
( |
( |
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Profit for the financial year |
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The above results were derived from continuing operations.
The company has no recognised gains or losses for the year other than the results above.
Mediaworks UK Limited
(Registration number: 06309397)
Statement of Financial Position as at 31 March 2021
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Note |
2021 |
2020 |
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Fixed assets |
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Intangible assets |
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Tangible assets |
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Current assets |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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Total assets less current liabilities |
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Provisions for liabilities |
( |
( |
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Net assets |
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Capital and reserves |
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Called up share capital |
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Capital redemption reserve |
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Profit and loss account |
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Total equity |
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These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies' regime within Part 15 of the Companies Act 2006.
Approved and authorised by the
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Mediaworks UK Limited
Statement of Changes in Equity for the Year Ended 31 March 2021
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Share capital |
Capital redemption reserve |
Profit and loss account |
Total |
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At 1 April 2019 |
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Profit for the year |
- |
- |
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Total comprehensive income |
- |
- |
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Dividends |
- |
- |
( |
( |
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At 31 March 2020 |
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Share capital |
Capital redemption reserve |
Profit and loss account |
Total |
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At 1 April 2020 |
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Profit for the year |
- |
- |
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Total comprehensive income |
- |
- |
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Dividends |
- |
- |
( |
( |
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At 31 March 2021 |
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Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.
Basis of preparation
These financial statements have been prepared using the historical cost convention.
These financial statements are prepared in sterling which is the functional currency of the entity.
Going concern
The financial statements have been prepared on a going concern basis.
The company meets its day to day working capital requirements through cash generated from operations. At the year end the company had net current assets of £1.22m (2020 - £1.03m) including cash at bank of £1.34m (2020 - £0.74m). The company is also subject to a debenture securing its parent company bank loan of £1.5m.
The company and group’s forecasts and projections for the next twelve months show that the company should have sufficient headroom from these facilities to be able to continue in operational existence for that period, taking into account reasonable possible changes in trading performance and the potential impact on the business of possible future scenarios arising from the continuing COVID-19 pandemic. This also considers the effectiveness of available measures to assist in mitigating the impact.
In the directors assessment of possible changes they have considered a fall in demand along with potential cost savings. During the year the company has made use of available reliefs put forward by HM Government including furloughing of underutilised staff and deferring VAT payment.
Although the forecast prepared, taking account of the matters above, support the ability of the company to remain a going concern and to be able to trade and meets its debts as they fall due, the full impact of COVID-19 on the economy and the underlying trading assumptions used in forecasting are extremely judgemental and difficult to predict and could be subject to significant variation.
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
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2 |
Accounting policies (continued) |
However, based on the factors set out above the directors believe that there is no material uncertainty in relation to going concern and that the company has adequate financial resources to continue in operational existence for at least twelve months from the date of signing the financial statements and therefore the directors believe it remains appropriate to prepare the financial statements on a going concern basis.
Judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: |
Capitalisation of intangibles - the cost of internally generated assets is capitalised as an intangible asset where it is determined by management's judgement that the ability to develop the assets is technically feasible, will be completed, and that the asset will generate economic benefit. |
Doubtful debt provision - Management evaluate the recoverability of trade debtors and record provisions for doubtful debts based on experience including comparisons of the relative ages of accounts and consideration of actual write-off history. The actual level of debt collected may differ from the estimated levels of recovery and could impact future operating results positively or negatively. |
Key sources of estimation uncertainty
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:
Useful economic lives of intangible assets - The annual amortisation charge is sensitive to changes in the estimated useful lives of the assets. The useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, future investments and economic utilisation. The carrying amount is £446,301 (2020 - £73,574).
Useful economic lives of tangible assets - The annual depreciation charge is sensitive to changes in the estimated useful lives of the assets. The useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, future investments and economic utilisation. The carrying amount is £440,092 (2020 - £484,141).
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.
The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company's activities.
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
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Accounting policies (continued) |
Government grants
Government grants in respect of specific projects are credited to a deferred income account and are released to the income statement over the life of the project.
Grants of a revenue nature are credited to the income statement in the period to which they relate. Government grants are presented separately and disclosed in Other operating income in the income statement. Other operating income in the year comprises the UK Government assistance provided through Coronavirus Job Retention Scheme and the Small Business Grant Fund during the Covid-19
pandemic.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
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Asset class |
Depreciation |
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Property improvements |
10 years |
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Fixtures, fittings & equipment |
8 years |
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Computer equipment |
4 years |
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
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2 |
Accounting policies (continued) |
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses.
Expenditure incurred on development activities including software development is capitalised only where the expenditure will lead to new or substantially improved products, the products are technically and commercially feasible and the company has sufficient resources to complete development.
Subsequent expenditure on capitalised intangible assets is capitalised only where it clearly increases the economic benefits to be derived from the asset to which it relates. All other expenditure, including that incurred in order to maintain an intangible asset's current level of performance, is expensed as incurred.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
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Asset class |
Amortisation |
|
Software development |
3 years |
Research and development
Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met:
• It is technically feasible to complete the intangible asset so that it will be available for use or sale;
• There is the intention to complete the intangible asset and use or sell it;
• There is the ability to use or sell the intangible asset;
• The use or sale of the intangible asset will generate probable future economic benefits;
• There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and
• The expenditure attributable to the intangible asset during its development can be measured reliably.
Expenditure that does not meet the above criteria is expensed as incurred.
Trade debtors
Trade debtors are amounts due from customers for services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
2 |
Accounting policies (continued) |
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Share based payments
The parent company operates an equity-settled, share-based compensation plan, under which this company receives services from employees as consideration for equity instruments (options) of the entity. The fair value of the employee services received is measured by reference to the estimated fair value at the grant date of equity instruments granted and is recognised as an expense over the vesting period. The estimated fair value of the option granted is calculated using the Black Scholes option pricing model. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. The corresponding credit is recognised in retained earnings as a component of equity.
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Revenue |
The analysis of the company's turnover for the year by market is as follows:
|
2021 |
2020 |
|
|
UK |
|
|
|
Europe |
|
|
|
Rest of world |
|
|
|
|
|
|
Other operating income |
The analysis of the company's other operating income for the year is as follows:
|
2021 |
2020 |
|
|
Coronavirus job retention scheme grant |
|
|
|
Miscellaneous other operating income |
|
|
|
Grants and subsidies receivable |
22,074 |
19,250 |
|
|
|
|
Operating profit |
Arrived at after charging/(crediting)
|
2021 |
2020 |
|
|
Depreciation expense |
|
|
|
Amortisation expense |
|
- |
|
Loss on disposal of property, plant and equipment |
- |
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2021 |
2020 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
6 |
Staff costs (continued) |
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
|
2021 |
2020 |
|
|
Administration and support |
|
|
|
|
|
During the year share options in the parent company were awarded to certain directors and staff members. The principal conditions include a non-market based performance and service condition. No charge in relation to these awards has been reflected in these financial statements on the grounds that it is not material. During the year three directors exercised their share options over the A, B and C ordinary shares of Mediaworks Holdings Ltd. No share based payment charge in relation to these awards has been reflected in these financial statements on the grounds that it is not material.
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2021 |
2020 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
294,011 |
305,007 |
|
Auditor's remuneration |
|
2021 |
2020 |
|
|
Audit of the financial statements |
|
|
|
Other fees to auditor |
||
|
Taxation compliance services |
|
|
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Taxation |
Tax charged/(credited) in the income statement
|
2021 |
2020 |
|
|
Current taxation |
||
|
UK corporation tax |
|
|
|
UK corporation tax adjustment to prior periods |
- |
|
|
66,476 |
148,189 |
|
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
|
|
|
Arising from changes in tax rates and laws |
- |
|
|
Arising from prior periods |
- |
(60) |
|
Total deferred taxation |
|
|
|
Tax expense in the income statement |
|
|
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2020 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2021 |
2020 |
|
|
Profit before tax |
|
|
|
Corporation tax at standard rate |
|
|
|
Effect of revenues exempt from taxation |
( |
- |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
|
UK deferred tax expense relating to changes in tax rates or laws |
- |
|
|
Deferred tax credit from unrecognised temporary difference from a prior period |
- |
( |
|
Increase in UK and foreign current tax from adjustment for prior periods |
- |
|
|
Tax decrease arising from group relief |
( |
- |
|
Tax decrease from effect of adjustment in research and development tax credit |
( |
( |
|
Total tax charge |
|
|
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
9 |
Taxation (continued) |
Deferred tax
Deferred tax assets and liabilities
|
2021 |
Liability |
|
Capital allowances in advance of depreciation |
|
|
Other timing differences |
( |
|
|
|
2020 |
Liability |
|
Capital allowances in advance of depreciation |
|
|
Other timing differences |
( |
|
|
In the Spring Budget 2020, the Government announced that from 1 April 2020 the corporation tax rate would remain at 19% (rather than reducing to 17% as previously enacted). This new law was deemed substantively enacted on 17 March 2020. The deferred tax balances at 31 March 2021 have been calculated based on this rate. In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate will increase to 25%. This new law was deemed substantively enacted on 24 May 2021. Since the proposal to increase the rate to 25% had not been substantively enacted at the balance sheet date, its effects are not included in these financial statements.
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Intangible assets |
|
Software development |
|
|
Cost or valuation |
|
|
At 1 April 2020 |
|
|
Additions internally developed |
|
|
Additions acquired separately |
|
|
At 31 March 2021 |
|
|
Amortisation |
|
|
At 1 April 2020 |
- |
|
Amortisation charge |
|
|
At 31 March 2021 |
|
|
Carrying amount |
|
|
At 31 March 2021 |
|
|
At 31 March 2020 |
|
Amortisation is not charged until the assets are available for use.
|
Tangible assets |
|
Property improvements |
Fixtures, fittings and equipment |
Computer equipment |
Total |
|
|
Cost or valuation |
||||
|
At 1 April 2020 |
|
|
|
|
|
Additions |
- |
|
|
|
|
At 31 March 2021 |
|
|
|
|
|
Depreciation |
||||
|
At 1 April 2020 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
At 31 March 2021 |
|
|
|
|
|
Carrying amount |
||||
|
At 31 March 2021 |
|
|
|
|
|
At 31 March 2020 |
|
|
|
|
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Debtors |
|
2021 |
2020 |
|
|
Trade debtors |
1,194,532 |
1,035,097 |
|
Amounts owed by group undertakings |
318,528 |
342,217 |
|
Other debtors |
|
|
|
Prepayments and accrued income |
|
|
|
|
|
|
Creditors |
|
2021 |
2020 |
|
|
Due within one year |
||
|
Trade creditors |
|
|
|
Social security and other taxes |
|
|
|
Other creditors |
|
|
|
Accruals and deferred income |
|
|
|
Corporation tax liability |
66,476 |
147,439 |
|
Dividends payable |
|
|
|
|
|
|
Provisions for liabilities |
|
Deferred tax |
|
|
At 1 April 2020 |
|
|
Increase (decrease) in existing provisions |
|
|
At 31 March 2021 |
|
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Share capital |
Allotted, called up and fully paid shares
|
2021 |
2020 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
1,000 |
|
1,000 |
|
|
|
1,000 |
|
1,000 |
|
|
|
|
|
|
|
Reserves |
Profit and loss account
This reserve represents cumulative comprehensive income less any dividends paid/approved.
Capital redemption reserve
This reserve represents the nominal value of ordinary shares redeemed in previous years.
|
Obligations under leases and hire purchase contracts |
Operating leases
The total of future minimum lease payments is as follows:
|
2021 |
2020 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
Later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
|
Contingent liabilities |
There are fixed and floating charges over the assets of the company in favour of Clydesdale Bank Plc.
Mediaworks UK Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Related party transactions |
During the year the company entered into transactions, in the ordinary course of business, with other related parties:
Summary of transactions with other related parties
Digital Knowledge Lab Limited is a related party due to common directors. During the year, Mediaworks UK Limited had sales of £143,339 (2020 - £45,000), purchases of £218,138 (2020 - £nil), with a year-end debtor balance of £nil (2020 - £54,000) and creditor balance of £25,759 (2020 - £nil).
Summary of transactions with other group companies
|
Parent and ultimate parent undertaking |
The company's immediate parent is
The most senior parent entity producing publicly available financial statements is
The ultimate controlling party is