PRINCIPAL_FILM_FINANCE_LT - Accounts

The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 31 March 2021 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The member has not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Principal Film Finance Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 4 Lower Park Row, Bristol, BS1 5BJ.

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 director has adjusted the format of the profit and loss account and the balance sheet as allowed under Companies Act 2006. In the opinion of the director, net interest and other service income is a more appropriate measurement of the Company's performance than turnover and cost of sales. The principal accounting policies adopted are set out below.

At the year end the company has made a profit of £3,848 (2020: loss of £6,206) and has net current liabilities of £28,737 (2020: £32,585).Atruet the time of approving the financial statements, the director has agreed to continue to support the company through his connected company Happy Hour Productions Ltd and with this support has a reasonable expectation there will be adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable interest and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

Interest income on financial assets classified as loans receivable is recognised on an accruals basis as stated by the loan terms and agreements.

Interest expenses on financial liabilities is determined on an accruals basis as determined by the loan terms and agreements in place.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on creation of films are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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:

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.

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, 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.

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, including creditors, bank loans and loans from connected companies, 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.

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.

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.

Current asset investments - loans

Current asset investments consist of loans made to film making companies, they are initially measured at cost and subsequently measure at cost less any accumulated impairment losses. The loans are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in the income statement.

The average monthly number of persons (including directors) employed by the company during the year was:

Within Current asset investments there is a loan balance of £39,935 which is currently in dispute. At the point of signing the financial statements the director cannot accurately value whether this will result in an impairment of the loan.

Included in Other creditors at the year end there is a balance of £153,628 (2020: £189,052) owed to Happy Hour Productions Limited, the director of which is the sole shareholder of Principal Film Finance Ltd.

Interest has been charged of £16,901 in the year in line with the loan documentation.

This loan is unsecured and repayable on demand.

In preparing the 2021 financial statements it was identified that in the prior years there were items, namely loans and interest receivable and payable, which were not correctly classified. these have now been reclassified in the current and prior year to reflect the substance of the income, expenses and assets when reviewed in line with the original documentation.