Blackmagic Design (Technology) Limited - Limited company accounts 20.1

REGISTERED NUMBER: 07892813 (England and Wales)

REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020

FOR

BLACKMAGIC DESIGN (TECHNOLOGY) LIMITED

Page

Company Information

1

Report of the Director

2

Report of the Independent Auditors

4

Income Statement

7

Other Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTOR:

G Petty

REGISTERED OFFICE:

Russell House

Oxford Road

Dorset

REGISTERED NUMBER:

07892813 (England and Wales)

AUDITORS:

Burnside

Chartered Accountants

and Statutory Auditor

61 Queen Square

Bristol

BS1 4JZ

The director presents his report with the financial statements of the company for the year ended 30 June 2020.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the provision of engineering services to its parent company.

DIRECTOR

G Petty held office during the whole of the period from 1 July 2019 to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 'Reduced Disclosure Framework'. Under company law the director must not approve the financial statements unless he is 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 director is 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Burnside, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

G Petty - Director

11 November 2020

Opinion

We have audited the financial statements of Blackmagic Design (Technology) Limited (the 'company') for the year ended 30 June 2020 which comprise the Income Statement, Balance Sheet, 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 Financial Reporting Standard 101 'Reduced Disclosure Framework' (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 2020 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 Auditors' 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 director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has 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.

Other information

The director is responsible for the other information. The other information comprises the information in the Report of the Director, but does not include the financial statements and our Report of the Auditors 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 the audit:

-	the information given in the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Director has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Director.

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 director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Director.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page two, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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 www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Mark Pooley (Senior Statutory Auditor)

for and on behalf of Burnside

Chartered Accountants

and Statutory Auditor

61 Queen Square

Bristol

BS1 4JZ

15 December 2020

TURNOVER

3

1,255,000

1,153,000

Cost of sales

1,012,258

900,716

GROSS PROFIT

242,742

252,284

Administrative expenses

207,415

196,711

35,327

55,573

Other operating income

41

3,504

OPERATING PROFIT and

PROFIT BEFORE TAXATION

5

35,368

59,077

Tax on profit

6

(86,785

)

(71,700

)

PROFIT FOR THE FINANCIAL YEAR

122,153

130,777

PROFIT FOR THE YEAR

122,153

130,777

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

122,153

130,777

FIXED ASSETS

Tangible assets

7

7,901

10,454

CURRENT ASSETS

Debtors

8

516,063

596,785

Cash at bank

266,158

35,076

782,221

631,861

CREDITORS

Amounts falling due within one year

9

85,876

59,947

NET CURRENT ASSETS

696,345

571,914

TOTAL ASSETS LESS CURRENT LIABILITIES

704,246

582,368

PROVISIONS FOR LIABILITIES

10

1,501

1,776

NET ASSETS

702,745

580,592

CAPITAL AND RESERVES

Called up share capital

11

2

2

Retained earnings

12

702,743

580,590

SHAREHOLDERS' FUNDS

702,745

580,592

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

The financial statements were approved by the director and authorised for issue on 11 November 2020 and were signed by:

G Petty - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 July 2018

2

449,813

449,815

Changes in equity

Total comprehensive income

-

130,777

130,777

Balance at 30 June 2019

2

580,590

580,592

Changes in equity

Total comprehensive income

-

122,153

122,153

Balance at 30 June 2020

2

702,743

702,745

1.	STATUTORY INFORMATION

Blackmagic Design (Technology) Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with Financial Reporting Standard 101 "Reduced Disclosure Framework" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

The director has considered the operations of the company and its financial position, and considers that it is reasonable for him to believe that the company will be operating 12 months from the date of the approval of the accounts. The accounts have therefore been prepared on the going concern basis.

As part of his going concern review, the director considered the impact that the COVID-19 pandemic has had on the business of the company, its parent company Blackmagic Design PTY Ltd, and its group. Product development, new product releases, and manufacturing has continued since March 2020 and trading volumes are higher than in previous years.

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework":

•

the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment;

•

the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations;

•

the requirements of paragraph 33(c) of IFRS 5 Non Current Assets Held for Sale and Discontinued Operations;

•

the requirements of IFRS 7 Financial Instruments: Disclosures;

•

the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;

•

the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases;

the requirements of paragraph 58 of IFRS 16;

•

the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers;

•

the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:

-

paragraph 79(a)(iv) of IAS 1;

-

paragraph 73(e) of IAS 16 Property, Plant and Equipment;

-

paragraph 118(e) of IAS 38 Intangible Assets;

-

paragraphs 76 and 79(d) of IAS 40 Investment Property; and

-

paragraph 50 of IAS 41 Agriculture;

•

the requirements of paragraphs 10(d), 10)(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of Financial Statements;

•

the requirements of paragraphs 134 to 136 of IAS 1 Presentation of Financial Statements;

•

the requirements of IAS 7 Statement of Cash Flows;

•

the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

•

the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;

•

the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group;

•

the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairments of Assets.

First-time adoption of financial reporting standard 101 (frs 101)

The company is eligible to adopt FRS 101 as its parent company prepares consolidated accounts that are prepared under International Financial Reporting Standards (IFRS). The company is included in this consolidation. The parent company's consolidated accounts are publicly available from the Australian Securities and Investment Commission.

The director made the decision to adopt IFRS and FRS 101 for the first time for the year ended 30 June 2020, so that the company's accounts can be more easily consolidated into its parent company's accounts.

No prior period adjustments were required as a result of the transition.

Turnover

Turnover represents engineering services to provide research and development to the company's parent company. The income is recognised as the services are provided.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

-

25% on cost

Computer equipment

-

25% on cost

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the balance sheet date.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Employee benefit costs

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

4.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

775,963

720,334

Social security costs

69,892

66,747

Other pension costs

46,729

45,685

892,584

832,766

The average number of employees during the year was as follows:

2020

2019

Software engineers

14

12

2020

2019

£

£

Director's remuneration

-

-

5.	PROFIT BEFORE TAXATION

The profit before taxation is stated after charging/(crediting):

2020

2019

£

£

Cost of inventories recognised as expense

1,012,258

900,716

Depreciation - owned assets

20,144

10,165

Profit on disposal of fixed assets

(3,500

)

-

Auditors' remuneration

4,850

3,275

Aggregate costs to undertake research and development, including staff costs

943,431

854,247

6.

TAXATION

Analysis of tax income

2020

2019

£

£

Current tax:

Tax

(86,510

)

(72,808

)

Deferred tax

(275

)

1,108

Total tax income in income statement

(86,785

)

(71,700

)

Factors affecting the tax expense

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2020

2019

£

£

Profit before income tax

35,368

59,077

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

6,720

11,225

Effects of:

Items of expenditure permanently disallowed

104

-

Tax affect of Research and Development tax credit

(93,609

)

(83,033

)

Correction of deferred tax provision in previous period

-

108

Tax income

(86,785

)

(71,700

)

7.	TANGIBLE FIXED ASSETS

Fixtures

and

Computer

fittings

equipment

Totals

£

£

£

COST

At 1 July 2019

695

132,170

132,865

Additions

150

51,546

51,696

Disposals

-

(91,042

)

(91,042

)

At 30 June 2020

845

92,674

93,519

DEPRECIATION

At 1 July 2019

695

121,716

122,411

Charge for year

150

19,994

20,144

Eliminated on disposal

-

(56,937

)

(56,937

)

At 30 June 2020

845

84,773

85,618

NET BOOK VALUE

At 30 June 2020

-

7,901

7,901

At 30 June 2019

-

10,454

10,454

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Trade debtors

286,707

399,110

Other debtors

19,307

73,712

Prepayments

39,755

41,038

Tax

159,318

72,808

VAT

10,976

10,117

516,063

596,785

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Trade creditors

21,340

19,459

Accrued expenses

64,536

40,488

85,876

59,947

10.	PROVISIONS FOR LIABILITIES

2020

2019

£

£

Deferred tax

1,501

1,776

Deferred

tax

£

Balance at 1 July 2019

1,776

Credit to Income Statement during year

(275

)

Balance at 30 June 2020

1,501

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2020

2019

value:

£

£

2

Ordinary

2

2

2

12.

RESERVES

Retained

earnings

£

At 1 July 2019

580,590

Profit for the year

122,153

At 30 June 2020

702,743

13.	RELATED PARTY DISCLOSURES

The company sold engineering services to Blackmagic Design PTY Limited, its parent company, for the sum of £1,255,000 (2019 - £1,153,000) during the year. At the year end the company was owed £252,601 (2019 - £399,110) by its parent company in respect of these services.

14.	ULTIMATE CONTROLLING PARTY

The company is controlled by its parent company and ultimate parent company, Blackmagic Design PTY Limited, a company incorporated in Australia. the parent company's registered office is:

11 Gateway Court

Port Melbourne VIC 3207

Australia

The company's accounts are consolidated in the accounts of Blackmagic Design PTY Limited.

15.	FIRST YEAR ADOPTION OF FRS 101

The company is transitioning from UK GAAP under FRS 102 The Financial Reporting Standard applicable to the UK and Republic of Ireland to IFRS and FRS 101 The Reduced Disclosure Framework. The transitioning has no material effect on the financial statements.