2022
Annual Report
3
ANNUAL REPORT 2022
To positively serve
and inspire our com-
munities by delivering
thrilling exhilaration,
rich enlightenment,
deep empathy and
fantastic escapism.
ASPIRATION
4
ANNUAL REPORT 2022
Registered Office:
CinemaONE Limited
One Woodbrook Place,
189 Tragarete Road,
Port of Spain
(T): 868 389 6925
(E): [email protected]
(W): www.cinemaonett.com
Auditors
PricewaterhouseCoopers Limited
11-13 Victoria Avenue
Port of Spain
Trinidad and Tobago
West Indies
(T)): 868 299 0700
(F): 868 623 6025
(W): www.pwc.com/tt
Attorneys-at-Law &
Legal Advisors
Pollonais, Blanc, de la Bastide & Jacelon
Attorneys-at-Law
Pembroke Court 17-19 Pembroke Street,
Port of Spain
Trinidad and Tobago
(T) (868) 623 5461
(F)(868) 625 8415
Principal Bankers
Guardian Group
Trust Limited
1 Guardian Drive
Westmoorings, Trinidad
(T): 868-226-2754
(W): www.myguardiangroup.com
First Citizens Bank Limited
One Woodbrook Place,
Port of Spain, Trinidad
(T): (868) 628-6305
(F): 623-9686
(W): www.firstcitizenstt.com
CIBC First Caribbean International Bank
Corporate Banking - CIBC FirstCaribbean
Financial Center
74 Long Circular Road,
Maraval, Trinidad
(T) 868 628 4685
(F) 868-622 4989
(W) www.cibcfcib.com
CORPORATE INFORMATION
5
ANNUAL REPORT 2022
TABLE OF CONTENTS
ASPIRATION 3
CORPORATE INFORMATION 4
CHAIRMAN’S STATEMENT 6
CHIEF EXECUTIVE OFFICER’S STATEMENT 10
CORPORATE SOCIAL RESPONSIBILTY 16
THE BOARD 18
DIRECTORS’ REPORT 22
DIRECTORS’ AND SENIOR OFFICERS’ INTERESTS
AND MAJOR SHAREHOLDERS 23
GOVERNANCE REPORT 24
FINANCIAL STATEMENTS 27
6
ANNUAL REPORT 2022
Mr Brian Jahra, Chairman
CHAIRMAN’S
STATEMENT
FOR THE FINANCIAL YEAR ENDED
SEPTEMBER 30, 2022
Overview
The global cinema exhibition sector and
CinemaONE delivered a signicant rebound in
Financial Year (FY) 2022 as Covid-19 (C19) re-
strictions waned and moviegoers demonstrated
a willingness to return to the Big Screen. Sony’s
Spiderman- No Way Home
elevated to the highest
grossing Spiderman lm ever and the 6th high-
est grossing lm of all time with US $1.9B at the
global box ofce. Paramount’s
Top Gun: Maverick
was another ostensible performer and has be-
come the 11th highest grossing lm of all time
and the highest earning Tom Cruise movie ever
with US $1.5B from the Global Box Ofce.
CinemaONE similarly enjoyed a resurgence in
moviegoing, particularly following the full relaxa-
tion of all government imposed C19 Safe Zone op-
erating restrictions on April 4, 2022. Buttressed
by the June releases of major blockbuster titles
from multiple studios highlighted by Paramount’s
Top Gun: Maverick
, Universal’s
and Disney’s
Thor
- Love and Thunder
, CinemaONE continued the
positive trajectory highlighted by the Company’s
June achievement of its highest single month at-
tendance in the pandemic era which even sur-
passed its pre-C19 historical 3 year average by a
marginal 2% coupled with encouraging per patron
metrics.
CinemaONE Gulf City Mall, Gemstone Sapphire Theatre
7
Chairman’s Statement
ANNUAL REPORT 2022
CinemaONE similarly
enjoyed a resurgence
in moviegoing,
particularly following
the full relaxation of all
government imposed
C19 Safe Zone operating
restrictions on
April 4, 2022.
Financial Performance
I am happy to summarize the following im-
proved nancial performance for FY 2022. Gross
Revenue increased by 388% to TT $10.1M (FY
2021: TT$2.1M). Gross Prot increased by
486% to TT $5.6M (FY 2021: TT $1.0M) and the
Company signicantly narrowed the Operating
Loss to TT -$0.02M, a near breakeven bench-
mark, versus the previous year’s Operating
Loss (FY 2021: TT -$6.5M). Net Loss was sim-
ilarly constrained to TT -$1.4M (FY 2021: TT
-$7.0M). EBITDA positively rebounded by 243%
to TT $3.1M versus the previous year’s negative
result (FY 2021: TT $-2.2M). The above results
were achieved amidst C19 constraints for the en-
tire rst half of FY 2022. Overall, the Company’s
box ofce performance was -38% below the pre
C19 historical 3 year average, which aligns with
the cinema industry -34% box ofce decit to the
same pre C19 average as of September 2022.
CinemaONE Gulf City Mall, Gemstone Sapphire Theatre
8
ANNUAL REPORT 2022
Future Outlook
The cinema exhibition industry’s recovery from
the global C19 pandemic is still underway and
is contingent upon the volume and appeal of
new lm content available, consumer sentiment
around movie-going and the continued cessation
of government restrictions. The cinema industry is
also adjusting to competition from streaming plat-
forms, supply chain constraints, inflationary im-
pacts and other macroeconomic factors.
However, in FY 2022, consumers reinforced their
desire to see the newest movie releases in a larg-
er-than-life cinematic environment which contin-
ues to propel CinemaONE towards an accelerated
recovery.
CinemaONE’s December 2022 opening of its second
cinema site in Gulf City Mall, San Fernando, and its
imminent capital markets activity which will infuse ad-
ditional equity capital into the Company via a Rights
Issue will position CinemaONE for newfound growth
as it pragmatically pursues strategic opportunities.
I wish to thank our Shareholders, Board of Directors,
Management, Employees, Loyal Customers and
all Stakeholders for the collaborative approach to-
wards sustainable recovery and growth.
Seasons Greetings!
Brian Jahra
Chairman
December 25, 2022
EBITDA positively
rebounded by 243%
to TT $3.1M versus
the previous year’s
negative result (FY
2021: TT $-2.2M)
10
ANNUAL REPORT 2022
Mrs Ingrid Jahra, CEO
CHIEF
EXECUTIVE
OFFICER’S
STATEMENT
OVERVIEW
After two years since the onset of the Covid-19
pandemic, in nancial year (FY) 2022 cinemas re-
opened in the second week of October 2021 after a
third government lockdown, in the interest of pub-
lic health and safety, to provide the Big Screen, sur-
round-sound and immersive experience that many
moviegoers had missed. There was great anticipa-
tion for audiences to return to cinemas especially
for
Spiderman- No Way Home
which was released
in December 2021, after almost six months of be-
ing closed from April to October 2021.
FY 2022 emerged as the rst entire year in the
pandemic era during which cinemas remained
open for 12 months consistently, albeit for less
than the full month in October 2021. In fact, in
April 2022 all government safe zone pandemic re-
strictions, which included occupancy limitations
and the requirement for vaccinated patrons only,
were fortunately removed and, coupled with major
MANAGEMENT DISCUSSION
AND ANALYSIS
11
Chief Executive Officer’s Statement
ANNUAL REPORT 2022
studio releases of blockbuster content, this posi-
tively impacted movie audiences for the nancial
year period.
Against this context, CinemaONE’s performance
highlights for FY 2022 were marked by a signi-
cant improvement for the period which ended
in September 2022. Noteworthy performances
were delivered by
Spiderman:- No Way Home
in
December 2021/ January 2022 which exceeded
10,000 in attendance despite the safe zone restric-
tions of fully vaccinated audiences and employees
and a 50 percent maximum occupancy for thea-
tre audiences. Once all of the safe zone, pandemic
operating restrictions were fully removed in April
2022, other big titles followed such as
Dr. Strange
and the Multiverse of Madness
,
Thor: Love and
Thunder
,
Jurassic World: Dominion
and
Top Gun:
Maverick
.
Key FY 2022 highlights are as follows:
n Strong pipeline of major movie releases from all
studios, inclusive of theatrical exclusivity periods
n Per capita total spend (ticket spend plus food
and beverage spend) improved and may be
attributed to the released pandemic restric-
tions from April 4, 2022 on premises (TT $127
per patron vs. TT $123 in the prior year)
n Increased annual Net Revenues of TT $9.7M
versus TT $2M in the Covid 19 impacted prior
FY 2021
n Positive EBITDA of TT $3.1M versus the neg-
ative result in the prior year (FY 2021: TT
$-2.2M) with a Cash Balance of TT $1.6M (FY
2021: $2.1M)
n Gemstone VIP Cinemas continued to experi-
ence success with private bookings
n Completion of phase 1 of the Gulf City Mall
Gemstone VIP Theatres at the close of nan-
cial year September 2022.
Key challenges for FY 2022, some of which
continued from the prior year period included:
n First 6 months of FY 2022 government’s safe
zone pandemic restrictions remained in place
which affected/ restricted audience capacity
and HR planning/ hiring
n No secured government economic relief for
SMEs and the Hospitality/ Entertainment Sector
in general during the nancial year period.
Noteworthy performances
were delivered by
Spiderman: No Way Home
in December 2021/ January
2022 which exceeded
10,000 in attendance
despite the safe zone
restrictions
12
ANNUAL REPORT 2022
FINANCIAL
PERFORMANCE
Pre Covid-19 Financial Highlights
Prior to Covid-19 CinemaONE had positioned the
Company on a positive growth trajectory:
2019 Audited
(Restated)
5 YR CAGR
Gross Revenue 19,014,163 9.1%
Gross Prot 10,804,122 5.7%
EBITDA 5,162,366 2.6%
Net Prot 871,047 21.8%
Total Assets 59,604,540 26.2%
Total Equity 35,445,281 72.2%
* CAGR: Cumulative Average Growth Rate
Additional Key Performance Highlights over the
Company’s historical ve (5) year period Pre-
Covid-19 are as follows:
n Attendance of over 120,000 patrons annually
peaking at 134,000 in 2019
n Screen expansion – increased from one IMAX
screen to six total screens including new
movie experiences such as Gemstone Luxury
Cinemas with seat side service in FY 2017
and 4DX technology in FY 2019
n IPO – Raised TT$14M in ordinary share cap-
ital to emerge as the rst SME to be listed on
the Trinidad and Tobago Stock Exchange in
FY 2019
n Initiated second site expansion at Gulf City
Mall, San Fernando
n Signicantly increased food and beverage
revenues over the historical ve year period,
delivering a CAGR of 27.4%.
FY 2022 Financial Performance
After almost two years of halting gains, with three
lockdown periods throughout 2020 to late 2021,
the Company’s theatre facilities were nally, fully
operational with all its theatre formats, IMAX,
Gemstone and 4DX, for 12 consecutive months
of this nancial year. FY 2022 initiated a signi-
cant box ofce recovery with no less than six ma-
jor movie titles performing solidly. Additionally,
studios signaled condence in the Big Screen by
the return of the studio movie theatrical exclusiv-
ity period of at least forty-ve days and a removal
of the pandemic model of same day streaming
and big screen movie releases. The Government
of Trinidad and Tobago also released its remain-
ing restrictions in the interest of public health and
safety by Q3 FY 2022. These restrictions included:
n a capacity limitation of 50%
n early closure times, particularly during the
state of emergency
n no alcohol consumption on premises
n vaccinated employees and patrons only.
In this climate there was a steady return to “nor-
malcy”: the Company’s box ofce recovered stead-
ily, as almost 76,000 moviegoers returned to the
Big Screen versus a mere 12,000 in FY 2021.
Revenue
CinemaONE reported Gross Revenue of TT
$10.1M, which represents a signicant increase
of 388% over the previous year’s audited re-
sults of TT $2.1M. The substantial increase in
Gross Revenue was attributed to the robust per-
formance of titles such as SpiderMan No Way
Home, Dr. Strange, Top Gun Maverick and Thor
Love and Thunder all of which initiated the excite-
ment of theatrical movie-going, the relaxation of
the government’s pandemic restrictions to allow
increased showtimes, increased food and bever-
13
Chief Executive Officer’s Statement
ANNUAL REPORT 2022
age sales and movie content that was nally re-
leased in the nancial period. Net Revenue after
sales discounts was TT $9.7M versus TT $2.1M
in FY 2021, an increase of 368%.
Gross Prot
The Company’s Gross Prot of TT $5.6M was
above prior year performance of TT $1.0M by
486%, a signicant jump over the prior year 2021.
Total Operating Expenses
Total Operating Expenses were further reduced by
-23.9% to TT $5.7M (2021: $7.4M). CinemaONE
continued to implement conservative cost con-
tainment measures as senior and middle manage-
ment compensation remained reduced by a mini-
mum of 30%. Through a collaborative approach
with the Company’s landlords, CinemaONE also
achieved signicant Covid-19 induced lease pay-
ment waivers and concessions. Similar operat-
ing expense reductions for non-operating periods
were also negotiated with other key vendors such
as IMAX Corporation.
Operating Prot
For FY 2022 CinemaONE greatly narrowed its
Operating Loss to TT -$0.02M (2021: TT -$6.5M),
a signicant reduction in the loss to almost break
even in 2022. This is a positive trend and the
Company is actively exploring strategies for ex-
tending many of the achieved cost reductions into
the subsequent nancial year.
Net Prot
CinemaONE similarly recorded a Net Loss of TT
-$1.4M, a signicant improvement of 79.7% as
compared to prior year 2021 which reported a Net
Loss of TT $-$6.9M.
Cash Flows and Liquidity
The Company recognizes the importance of
maintaining its diligent focus on cash and liquid-
ity management so as to enable the Company to
manage the industry peaks and troughs and var-
ying macroeconomic conditions. Net Cash gener-
ated from operating activities increased by 190%
to TT $7.1M (2021: TT $2.4M) while overall Cash
held at the end of the year reduced by -24.6% to
TT $1.6M (2021: TT $2.1M) largely due to invest-
ing activities of TT $6.1M associated with the
completion of the Gulf City Mall theatre versus TT
$3.1M in the prior year 2021.
Loan Facilities
Through a collaborative, long term approach with
its lender, Guardian Group Trust Limited (GGTL),
CinemaONE succeeded in securing both loan
payment deferrals and loan covenant waivers.
However the Company restarted interest pay-
ments in FY 2022 with interest payments of TT
$1.2M (2021: $0.1M) and maintained its gearing
ratio roughly consistent at 68% (2021: 67%).
CinemaONE reported Gross
Revenue of TT$10.1M,
which represents a
signicant increase of 388%
over the previous year’s
audited results of TT $2.1M
14
ANNUAL REPORT 2022
Cinema Industry Outlook
Management believes the outlook for the global
cinema industry is increasingly positive. At the
close of calendar year 2022, the industry deliv-
ered a total of US $25.9 Billion in 2022 total global
box ofce receipts. This represented a 27% gain
over 2021 and a narrowing to -35% below the
pre Covid-19 3 year average (2017-2019). The
year end December results of Avatar The Way of
Water with US $1.5B at the global box ofce has
been particularly encouraging.
For CinemaONE, as of the date of this report,
the Company has delivered its best Q1 attend-
ance ever in FY 2023, given the recent back to
back blockbuster titles with both Black Panther
Wakanda Forever in November and Avatar The
Way of Water in December. Black Panther, in par-
ticular, has emerged in a virtual tie for number 10
on the Company’s list of all time top performers
with attendance exceeding 16,000.
TOP 5 GROSSING
MOVIES 2022
For CinemaONE, as of the
date of this report, the
Company has delivered
its best Q1 attendance
ever in FY 2023, given
the recent back to back
blockbuster titles with
both Black Panther
Wakanda Forever in
November and Avatar
The Way of Water in
December
Management believes that although the cinema
industry’s recovery from the Covid-19 pandemic
must be measured in years versus months, the
entertainment industry’s planned FY 2023 up-
coming releases of more blockbuster and mid-tier
content will provide an enabling environment for
CinemaONE to reposition itself on the trajectory
towards protable growth.
15
ANNUAL REPORT 2022
Movie Slate 2023
16
ANNUAL REPORT 2022
CORPORATE SOCIAL RESPONSIBILTY
During Fiscal Year 2022, CinemaONE continued to
be a socially responsible organization by providing
a space for several bona-de charities and chari-
table organizations to execute various initiatives.
One such noteworthy event was the installation of
the Carnival queen Costume ‘Madame Cocoyea’ in
the IMAX lobby. This installation marked the start of
the ‘ADOPT-A-COSTUME’ campaign implemented
by the Artist’s Coalition Of Trinidad & Tobago. The
initiative urges corporate & State T&T to save se-
lect King & Queen costumes from destruction by
adopting them and exhibiting them in their spaces
for a year & more. The ‘Madame Cocoyea’ costume
is still beautifully erected in the IMAX lobby and has
been a welcome addition to the space.
In FY 2022, CinemaONE Limited also provided
a space for the Miss Plus World Trinidad and
Tobago Sash and Reveal Ceremony for the 2022
Delegates of the Miss Plus World Pageant. The
Sash and Reveal event saw several delegates
across various areas in the country being sashed
to participate for the Miss Plus World Trinidad &
Tobago Pageant; where the winner will be chosen
to represent the country.
On International Day of Persons with Disabilities,
the company provided a theatre to screen a doc-
umentary to various stakeholders, an event that
was carried out by the Down Syndrome Family
Network (DSFN). CinemaONE has supported the
DSFN since 2017 with the employment of one of
its foundation members
Finally, in collaboration with the Honourable Keith
Scotland, MP for Port Of Spain South; CinemaONE
Limited was elated to host 300 kids from his con-
stituency where they were treated to a movie at
the IMAX theatre. This event marked the second
time in which the company has collaborated with
the MP for an occasion of this nature.
CinemaONE has always maintained itself as a
community asset through the provision of our
theatres and screens. For the next Fiscal Year,
and as we move into post C-19 pandemic period,
CinemaONE looks forward to further collabora-
tions and the reintroduction of the school edu-
cational programme which saw the screening of
27 educational documentaries being exhibited to
over 10,000 school children as of scal 2019 (pre
C-19 pandemic) .
18
ANNUAL REPORT 2022
Mr. Jahra is a co-founder of CinemaONE and has
served as its Chairman since inception. He has
been directly responsible for negotiating IMAX and
4DX Licensing Agreements, structuring and rais-
ing debt and equity capital totalling over TT $50
million for the launch of IMAX Trinidad, Gemstone
and 4DX.
From April 2006 to July 2017 he was the co-
founder and CEO of Massy Communications, for-
merly Three Sixty Communications Limited and
recently re-branded to Amplia Communications
Limited, where he led teams responsible for con-
structing and successfully monetizing a Trinidad
and Tobago nationwide bre optic network with
subsea cable links to Miami, Florida and delivered
successive years of protable growth.
Mr Brian Jahra, BA, MSc
Executive Chairman and Chief Financial Officer
In 2017 Mr. Jahra played a key role in the suc-
cessful sale of Massy Communications to
Telecommunications Services of Trinidad and
Tobago Limited for TT $215,000,000. Prior to Massy
Communications, Mr. Jahra was the founder of
eFREENET Limited, a multimedia software devel-
opment company and Internet Service Provider
which developed many of Trinidad and Tobago’s
rst corporate websites and collaborated with
ABC-TV in New York for multimedia software
development.
Mr. Jahra was a nalist in Ernst and Young’s 1998
Entrepreneur of the Year Award for his innovation.
Mr. Jahra has a longstanding background in en-
tertainment and media. He was a former nancial
analyst at Credit Suisse First Boston and Keystone
Financial Advisory in Los Angeles specializing in
the entertainment industry where he conducted a
range of transactions including, motion picture -
nance, cinema exhibition start-up, cable-tv valua-
tions and international lm licensing. He holds a
BA in International Economics with Honors from
the University of California at Los Angeles (UCLA),
a MSc in Economics from the University of the
West Indies, St. Augustine, and has conducted
MBA studies in nance and marketing at the
Wharton School of Business in Philadelphia PA.
He is fluent in Spanish and Portuguese.
THE BOARD
19
The Board
ANNUAL REPORT 2022
Mrs Ingrid Jahra, Bsc, MBA
Chief Executive Officer and Director
Mrs. Jahra is a co-founder of CinemaONE and has
been CinemaONE’s Chief Executive Officer and
Director since inception.
She has been directly responsible for IMAX and Gemstone
theatre construction, the building of an IMAX theatre op-
erations team, negotiation of theatre programming agree-
ments with all major Hollywood studios and the execution
of various multiyear sponsorship agreements with large
regional corporations.
She has held senior positions in the ANSA-McCal
Group of Companies in the areas of public rela-
tions and new media development from 1994 to
1996 and from 2005-2007, respectively.
During the interim she was a Director of eFREENET
Limited responsible for sales and marketing and
played a pivotal role in the establishment of Three Sixty
Communications as a joint venture with Massy Holdings
in 2006.
Mrs. Jahra is currently the Chairperson of The Board of
Film Censors of Trinidad and Tobago. Mrs. Jahra holds a
BSc degree in Tourism Management from the University
of the West Indies, Bahamas and an Executive MBA with
Distinction from the Arthur Lok Jack Graduate School of
Business.
20
ANNUAL REPORT 2022
Nadine Darmanie, FCCA:
Non-Executive Independent Director
Nadine Darmanie is currently the Chief Financial Ofcer of
the Desalination Company of Trinidad and Tobago Limited
(Desalcott) where she has worked since 2004. Over this pe-
riod Nadine has achieved several milestones most notably,
working on the negotiating and nancing team for the buy-
out of General Electric (GE) shareholding in 2012, making the
Company 100% locally owned. Shortly thereafter, she worked
on nancing the expansion of the plant capacity at Desalcott
by nearly two thirds, thereby making it one of the largest desal-
ination plants in the western hemisphere.
Prior to Desalcott, Nadine was with Point Lisas Industrial Port
Development Corporation (PLIPDECO) from 1998 to 2003.
There she held the positions of Management Accountant then
that of Finance Manager. During that time she participated in
transforming the Company’s port operations through nanc-
ing the purchase of new port equipment, and the expansion of
the berthing facilities.
She started her career in 1985 in the eld of auditing, where
she spent several years before moving into industry. She also
work with the Small Business Development Company Limited
(SBDC) in charge of the Accounting Function for six years.
Nadine is a Fellow of the Association of Chartered Certied
Accountants (FCCA) and member of the Institute of Chartered
Accountants of Trinidad and Tobago.
Mr Christian Hadeed, BA
Director
Mr. Christian Hadeed is a Trinidadian businessman
who joined CinemaONE’s Board in 2014. Mr. Hadeed
emerges from an insurance background having worked
with Beacon Insurance Company Limited since 2005.
He held several positions within the company ranging
from Claims Executive, to Licensed Loss Adjuster before
joining the Beacon Insurance Board of Directors in 2010
where he served as its Chairman from 2013-2015. Mr.
Hadeed has been an active member of Beacon’s Executive
Management Team, as well as the Claims, Re-insurance,
and Investment committees.
He has recently Co-founded the newly refurbished St.
Christopher’s Service Station and Quick Shoppe Plus lo-
cated on Wrightson Road in Port of Spain, and holds an
influential seat on its Board of Directors. Additionally, Mr.
Hadeed is at the forefront of emerging and influential small
enterprises serving as a Director of One Yoga Trinidad &
Tobago as well as Float Trinidad. He holds a Bachelor’s
Degree in Business Administration (International Business
Major) from Chapman University, California, and brings ex-
tensive retail and operational experience to CinemaONE.
THE BOARD (CONTINUED)
21
The Board (continued)
ANNUAL REPORT 2022
Keston McQuilkin, BA, LLB:
Non-Executive Independent Director
Kurt Valley, MBA, BA:
Non-Executive Director
Keston McQuilkin was called to the Bar, Trinidad & Tobago
in 2008. He joined Bethany Chambers upon completing
his legal studies and being admitted to the Bar. In the last
decade he has proven himself to be a dynamic, thoughtful
and well-prepared civil advocate. He has built up a com-
prehensive practice in matters concerning insurance, con-
struction and general commercial litigation, together with
property, estates, employment/industrial relations, occu-
pational health and safety as well as judicial review and
other public law matters. In addition to his court matters,
he has appeared as junior counsel in several arbitrations
and mediations; he has also appeared before the Equal
Opportunities Commission and the Industrial Court. He is
also the Vice Chairman of HDC.
Notable cases:
} Wayne Wills v Unilever Caribbean Ltd [CA No
56 of 2009]; damages, personal injuries, ap-
peal against assessment; fresh evidence on
appeal; loss of future earnings.
} Commission of Inquiry into the construc-
tion sector of Trinidad & Tobago chaired by
Professor John Uff [2008-2010], acted on
behalf of Education Facilities Company of
Trinidad & Tobago.
Kurt Valley has over 20 years of experience in diverse -
nancial services institutions. He has substantial experience
in a range of banking and corporate nance functions in-
cluding investment banking, securities trading, investment
management, market risk analysis, and treasury manage-
ment. He is currently the Vice President of Operations and
Strategy at Aspire Fund Management Company Limited.
Prior to Aspire, he held the position of General Manager of
First Citizens Asset Management for the period January
2010 - December 2019. During this time, he oversaw the
growth in assets under management by 54% from $9.68
billion to over $14.9 billion in September 2019; among
other noteworthy accomplishments.
Kurt has also served as the Chairman of the Trinidad and
Tobago Mutual Fund Association and was a director on
the First Citizens Costa Rica Board.
The Directors submit their Report and Audited Financial Statements for the year ended
September 30, 2022 as follows:
Financial Results
2022 2021
Loss Before Tax $(1,862,753) $(8,066,231)
Taxation 442,157 1,068,748
Loss for the Year (1,420,596) (6,997,483)
Loss Per Share $(0.22) $(1.09)
AUDITORS
The Auditors, PricewaterhouseCoopers, retire and being eligible offer themselves for re-appointment.
By Order of the Board
Ingrid Jahra, Company Secretary
22
ANNUAL REPORT 2022
DIRECTORS’ REPORT
23
ANNUAL REPORT 2022
DIRECTORS’ AND SENIOR
OFFICERS’ INTERESTS AND
MAJOR SHAREHOLDERS
Directors
The interests of the Directors holding office as at September 30,
2022 in the Ordinary Shares of the Company were as follows:
Direct Interest Connected Persons
Brian Jahra 14,809 4,678,446*
Ingrid Jahra 9,221 4,678,446*
Christian Hadeed Nil 4,655,756**
Nadine Darmanie*** Nil Nil
Keston McQuilkin*** Nil Nil
Kurt Valley*** Nil Nil
*As at September 30, 2022, Brian Jahra and Ingrid Jahra jointly control Jahra
Ventures Limited which owns 60% of Giant Screen Entertainment Holdings Limited.
Both Jahra Ventures Limited and Giant Screen Entertainment Holdings Limited
owned 122,690 and 4,555,756 shares respectively in CinemaONE Limited as at
September 30, 2022.
**As at September 30, 2022, Christian Hadeed owns 33.4% of CGH Limited, while
Gerald Hadeed owns 66.6%. CGH Limited owns the majority stake in The Beacon
Insurance Company Limited and similarly owns 40% of Giant Screen Entertainment
Holdings Limited. Both The Beacon Insurance Company Limited and Giant Screen
Entertainment Holdings Limited owned 100,000 and 4,555,756 shares respectively
in CinemaONE Limited as at September 30, 2022.
Senior Ocers
The interests of the Senior Officers holding office at the end of
September 30, 2022 in the Ordinary Shares of the Company
were as follows::
Direct Interest Connected Persons
Brian Jahra* 14,809 4,678,446*
Ingrid Jahra* 9,221 4,678,446*
Khadin Moreno 4,506 Nil
Kristina Celestine 2,266 Nil
Anushka Alleyne Nil Nil
*As at September 30, 2022, Brian Jahra and Ingrid Jahra jointly control Jahra Ventures Limited
which owns 60% of Giant Screen Entertainment Holdings Limited. Both Jahra Ventures Limited and
Giant Screen Entertainment Holdings Limited owned 122,690 and 4,555,756 shares respectively in
CinemaONE Limited as at September 30, 2022.
Substantial Interests /
10 Largest Shareholders
As at September 30, 2022 the Substantial Interests in
CinemaONE Limited were as follows:
Direct
Interest
Ownership
Percentage
Giant Screen Entertainment Holdings Limited
4,555,756 71.1%
KCL Capital Market Brokers Limited
607,880 9.5%
The Unit Trust Corporation
300,000 4.7%
Jahra Ventures Limited
122,690 1.9%
Beacon Insurance Company Limited
100,000 1.6%
First Citizens Investment Services Limited
100,000 1.6%
Murphy Clark Financial Limited
56,221 .9%
David Chin Wah Kwoi
39,500 .6%
Dr. Clarence and Barbara Shields
23,712 .4%
Kelvin Mahabir
20,000 .3%
Ingrid Jahra
Corporate Secretary
CinemaONE Limited
December 29, 2022
24
ANNUAL REPORT 2022
GOVERNANCE
REPORT
Board Meetings
CinemaONE’s Board of Directors convened on ten occasions during
Financial Year 2022. Below is an attendance summary.
The follow table indicates the number of Board Meetings held and
attendance of Directors during the year:
Positions Present Excused Absent
Brian Jahra Chairman and CFO
10 0 0
Ingrid Jahra Director and CEO
10 0 0
Nadine Darmanie Independent Director
and Audit Committee
Chairperson
10 0 0
Kurt Valley Director
10 0 0
Keston McQuilkin Independent Director
7 3
Christian Hadeed Director
5 5 0
*At CinemaONE’s Annual General Meeting held on July 20, 2021, Michael
Quamina and Adrian Bharath retired from the Board of Directors and
Keston McQuilkin and Nadine Darmanie were elected as new Independent
Directors and Kurt Valley was elected as a new Director.
Audit Committee
The Audit Committee, chaired by Ms. Nadine Darmanie, convened on
three occasions during Financial Year 2022 and provided guidance and
oversight of the PricewaterhouseCoopers’ Audit engagement.
25
ANNUAL REPORT 2022
26
ANNUAL REPORT 2022
Audited
Financial
Statements,
30 September 2022
(Expressed in Trinidad & Tobago Dollars)
APPENDIX
27
ANNUAL REPORT 2022
CinemaONE Limited
Financial Statements
30 September 2022
(Expressed in Trinidad and Tobago dollars)
CinemaONE Limited
Contents Page
Statement of Management’s Responsibilities 1
Independent Auditors’ Report 2 - 5
Statement of Financial Position 6
Statement of Profit or Loss and Other Comprehensive Income 7
Statement of Changes in Equity 8
Statement of Cash Flows 9
Notes to the Financial Statements 10 - 41
CinemaONE Limited
Statement of Management’s Responsibilities
(1)
Management is responsible for the following:
• Preparing and fairly presenting the accompanying financial statements of CinemaONE Limited (the
Company) which comprise the statement of financial position as at 30 September 2022 and the
statements of profit or loss and other comprehensive income, changes in equity and cash flows for
the year then ended, and significant accounting policies and other explanatory information;
• Ensuring that the Company keeps proper accounting records;
• Selecting appropriate accounting policies and applying them
in a consistent manner;
• Implementing, monitoring and evaluating the system of internal control that assures security of the
Company’s assets, detection/prevention of fraud, and the achievement of Company operational
efficiencies;
• Ensuring that the system of internal control operated effectively during the reporting period;
• Producing reliable financial reporting that comply with laws and regulations, including the Companies
Act; and
• Using reasonable and prudent judgement in the determination of estimates.
In preparing these audited financial statements, management utilised International Financial Reporting
Standards, as issued by the International Accounting Standards Board and adopted by the Institute of
Chartered Accountants of Trinidad and Tobago. Where International Financial Reporting Standards
presented alternative accounting treatments, management chose those considered most appropriate in
the circumstances.
Nothing has come to the attention of management to indicate that the Company will not remain a going
concern for the next twelve months from the reporting date; or up to the date the
accompanying financial
statements have been authorised for issue, if later.
Management affirms that it has carried out its responsibilities as outlined above.
Chairman Director
22 December 2022 22 December 2022
PricewaterhouseCoopers, PO Box 550, 11-13 Victoria Avenue, Port of Spain, 100902, Trinidad, West Indies
T: (868) 299 0700, F: (868) 623 6025, www.pwc.com/tt
Independent auditor’s report
To the Shareholders of CinemaONE Limited
Report on the audit of the financial statements
Our opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of
CinemaONE Limited (the Company) as at 30 September 2022, and its financial performance and its cash
flows for the year then ended in accordance with International Financial Reporting Standards.
What we have audited
The Company’s financial statements comprise:
● the statement of financial position as at 30 September 2022;
● the statement of profit or loss and other comprehensive income for the year then ended;
● the statement of changes in equity for the year then ended;
● the statement of cash flows for the year then ended; and
● the notes to the financial statements, which include significant accounting policies and other
explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Company in accordance with the International Code of Ethics for Professional
Accountants (including International Independence Standards) issued by the International Ethics
Standards Board for Accountants (IESBA Code). We have fulfilled our other ethical responsibilities in
accordance with the IESBA Code.
Overview
● Overall materiality: $249,710, which represents 5% of
average loss before taxation for the past three years.
● In addition to determining materiality, we also assessed, amongst
other factors, the following in designing our audit:
- the risk of material misstatement in the financial statements
- significant accounting estimates
- the risk of management override of internal controls
● Basis of preparation - use of going concern assumption
Materiality
Audit
scope
Key audit
matters
(2)
Our audit approach
Audit scope
As part of designing our audit, we determined materiality and assessed the risks of material misstatement
in the financial statements. In particular, we considered where management made subjective judgements;
for example, in respect of significant accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk
of management override of internal controls, including, among other matters, consideration of whether
there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on
the financial statements as a whole, taking into account the structure of the Company, the accounting
processes and controls, and the industry in which the Company operates.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance whether the financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall materiality for the financial statements as a whole as set out in the table below.
These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the financial statements as a whole.
Overall materiality $249,710
How we determined it 5% of average loss before taxation for the past three years.
Rationale for the materiality
benchmark applied
We chose loss before taxation as the benchmark because, in
our view, it is the benchmark against which the performance
of the Company is most commonly measured by users, and is
a generally accepted benchmark. We chose 5% which is
within a range of acceptable benchmark thresholds and used
average loss before taxation for the past three years due to
the historical volatility of earnings.
We agreed with the Audit Committee that we would report to them misstatements identified during our
audit above $12,486, as well as misstatements below that amount that, in our view, warranted reporting
for qualitative reasons.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
(3)
Key audit matter How our audit addressed the key audit matter
Basis of preparation - use of going concern
assumption
Refer to note 24 to the financial statements for
disclosures relating to the impact of Covid-19
and use of the going concern assumption.
The Company prepares its financial
statements under International Financial
Reporting Standards using the going concern
basis of accounting. We focused on the
appropriateness of using the going concern
basis given the continuing adverse impact of
the Covid-19 pandemic on the industry and on
the Company’s operating results and cash
flows for the year ended 30 September 2022.
The Company was again impacted by the
continued Government imposed Covid-19
restrictions on cinema operations in the year
under audit. Successive waves of Covid-19
outbreaks resulted in three mandated
lockdowns and over thirteen months of
aggregate closure of cinemas between March
2020 and October 2021. The Covid-19
restrictions, including limits on capacity,
extended to April 2022 when all government
imposed Covid-19 restrictions were relaxed
and movie theatres in Trinidad and Tobago
were permitted to operate under normal
conditions. Such Covid-19 restrictions
materially impacted CinemaONE Limited’s
performance during the year ended 30
September 2022.
The Company is subject to several debt
covenants pertaining to its borrowings. As
such, management’s going concern
assessment included an assessment on
whether the Company will be able to continue
to meet its liabilities as they fall due and its
debt covenant requirements.
The Company’s cash flow projections are
dependent on significant management
judgement, particularly in respect of forecasted
revenue levels and growth rates, and can be
influenced by management bias as well as
factors outside the Company’s control.
Our approach to addressing the matter involved the
following procedures, amongst others:
● Obtained management’s going concern cash flow
projections and assessed the financing facilities
including repayment terms and compliance with
debt covenants.
● Challenged key assumptions used in the forecast,
in particular forecasted revenue levels and growth
rates, debt repayments, discount rate and capital
expenditure.
● Compared the key assumptions to externally
derived data where available including market
expectations of the outlook for the global box
office.
● Assessed the historical accuracy of forecasts
prepared by management by comparing actual
results with historical budgeted projections.
● Tested the clerical accuracy and appropriateness
of the model used to prepare the forecasts.
● Reperformed management’s sensitivity analysis to
assess the impact of changes in management’s
revenue growth rates on the future cash flow
projections.
● Obtained written confirmation from the relevant
financial institution that the Company has received
a waiver of its existing covenants as at 30
September 2022.
● Considered subsequent events and any
associated impact on the Company’s cash flows
and forecast.
● Evaluated the disclosures made within the
financial statements.
Based on the procedures performed, we determined
that management’s use of the going concern basis of
accounting was not unreasonable.
(4)
Other information
Management is responsible for the other information. The other information comprises CinemaONE
Limited’s Annual Report (but does not include the financial statements and our auditor’s report thereon),
which is expected to be made available to us after the date of this auditor’s report.
Our opinion on the financial statements does not cover the other information and we will 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
identified above when it becomes available 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.
When we read CinemaONE Limited’s Annual Report, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to those charged with governance.
Responsibilities of management and those charged with governance for the financial
statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with International Financial Reporting Standards and for such internal control as management
determines 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, management 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 management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
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 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.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
● Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
● Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
(5)
Auditor’s responsibilities for the audit of the financial statements (continued)
● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
● Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
● Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Kerry-Ann Chevalier.
Port of Spain
Trinidad, West Indies
22 December 2022
(7)
CinemaONE Limited
Statement of Financial Position
(Expressed in Trinidad and Tobago dollars)
As at
30 September
Notes 2022 2021
$ $
Assets
Non-current assets
Plant and equipment 4 67,798,768 63,620,671
Right of use assets 5 5,582,852 6,000,336
Due from parent company 6 3,018,624 2,900,897
Deferred tax asset 7 3,597,695 3,160,141
79,997,939 75,682,045
Current assets
Inventories 8 89,053 98,412
Prepayments and other receivables 9 2,296,364 2,973,589
Taxation recoverable 268,041 1,869
Cash and cash equivalents 10 1,573,354 2,085,776
4,226,812 5,159,646
Total assets 84,224,751 80,841,691
Shareholders’ equity and Liabilities
Shareholders’ equity
Share capital 11 32,579,503 32,579,503
Accumulated losses (11,477,363) (10,056,767)
21,102,140 22,522,736
Non-current liabilities
Deferred tax liability 7 2,468,898 2,310,757
Borrowings 12 36,003,510 38,752,511
Shareholder loans 13 997,387 670,942
Accruals and other payables 14 8,004,563 5,493,503
Lease liabilities 5 6,605,604 7,010,936
54,079,962 54,238,649
Current liabilities
Borrowing 12 2,923,183
--
Shareholder loans 13 166,968 143,270
Accruals and other payables 14 5,547,167 3,552,634
Lease liabilities 5 405,331 375,282
Deferred revenue 15 -- 9,120
9,042,649 4,080,306
Total liabilities 63,122,611 58,318,955
Total shareholders’ equity and liabilities 84,224,751 80,841,691
The notes on pages 10 to 41 are an integral part of these financial statements.
These financial statements were authorised for issue by the Board of Directors on 22 December 2022.
Director Director
(7)
CinemaONE Limited
Statement of Profit or Loss and Other Comprehensive Income
(Expressed in Trinidad and Tobago dollars)
30,
Year ended
30 September
Notes 2022 2021
$ $
Revenue 16 9,717,170 2,072,424
Cost of sales 17 (4,083,936) (1,111,636)
Gross profit 5,633,234 960,788
Expenses
Administrative expenses 17 (5,299,272) (6,655,130)
Marketing expenses (353,088) (774,041)
Total expenses (5,652,360) (7,429,171)
Operating loss (19,126) (6,468,383)
Finance costs (2,053,586) (1,859,131)
Other income 18 209,959 261,283
Net finance costs (1,843,627) (1,597,848)
Loss before taxation (1,862,753) (8,066,231)
Taxation credit 7 442,157 1,068,748
Loss for the year (1,420,596) (6,997,483)
Other comprehensive income -- --
Total comprehensive loss for the year
attributable to equity holders of the Company (1,420,596) (6,997,483)
Loss per share for loss attributable
to the equity holders of the Company 19 $(0.22) $(1.09)
The notes on pages 10 to 41 are an integral part of these financial statements.
(8)
CinemaONE Limited
Statement of Changes in Equity
(Expressed in Trinidad and Tobago dollars)
Share Accumulated Shareholders’
capital losses equity
$ $ $
Year ended 30 September 2022
Balance at 1 October 2021 32,579,503 (10,056,767) 22,522,736
Total comprehensive loss for the year -- (1,420,596) (1,420,596)
Balance at 30 September 2022 32,579,503 (11,477,363) 21,102,140
Year ended 30 September 2021
Balance at 1 October 2020 32,579,503 (3,059,284) 29,520,219
Total comprehensive loss for the year -- (6,997,483) (6,997,483)
Balance at 30 September 2021 32,579,503 (10,056,767) 22,522,736
The notes on pages 10 to 41 are an integral part of these financial statements.
(9)
CinemaONE Limited
Statement of Cash Flows
(Expressed in Trinidad and Tobago dollars)
30,
Year ended
30 September
Notes 2022 2021
$ $
Cash flows from operating activities
Loss before taxation
(1,862,753) (8,066,231)
Adjustments for:
Depreciation 4,5 3,168,381 4,263,678
Interest expense 2,053,586 1,859,131
3,359,214 (1,943,422)
Changes in:
Decrease in inventories
9,359 10,300
Decrease in prepayments and other receivables
(677,225) (590,845)
(Increase)/decrease in due from parent company
(117,726) 214,895
Increase in accruals and other payables 4,505,593 4,768,058
Decrease in deferred revenue
(9,120) --
Cash generated from operating activities 3,710,881 2,458,986
Taxation paid (11,222) (21,658)
Net cash generated from operating activities 7,058,873 2,437,328
Cash flows from investing activities
Purchase of plant and equipment 4 (6,144,912) (3,094,229)
Cash flows from financing activities
Repayment of loans and borrowings
(136,494) (62,448)
Proceeds from loans and borrowings
486,607 61,377
Leases
(527,532) (226,089)
Interest paid
(1,248,964) (134,231)
Net cash used in financing activities (1,426,383) (361,391)
Decrease in cash and cash equivalents for the year (512,422) (1,018,292)
Cash and cash equivalents at beginning of year
2,085,776 3,104,068
Cash and cash equivalents at end of year 10 1,573,354 2,085,776
The notes on pages 10 to 41 are an integral part of these financial statements.
CinemaONE Limited
Notes to the Financial Statements
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(10)
1 General information
CinemaONE Limited (“CinemaONE” or “the Company”), formerly Giant Screen Entertainment Limited,
was incorporated in the Republic of Trinidad and Tobago on 11 December 2009. The registered office
of the Company is situated at One Woodbrook Place, 189 Tragarete Road, Port of Spain. CinemaONE
is a subsidiary of Giant Screen Entertainment Holdings Limited (“GSEHL”), the Parent Company.
GSEHL is registered in Trinidad and Tobago.
CinemaONE offers differentiated and innovative digital cinema entertainment in multiple, premium movie
formats. In August 2011, CinemaONE launched the first large format IMAX movie theatre in the
Caribbean featuring IMAX’s patented, immersive 3D technology on the region’s largest, giant screen.
CinemaONE is the exclusive Trinidad licensee of the patented IMAX Technology of the IMAX
Corporation which affords advanced high-resolution imagery, dual projection systems, patented theatre
geometry, laser aligned surround sound and the world’s largest movie screens.
In 2016, CinemaONE continued its innovation in movie entertainment with the launch of its luxury,
designer theatre format branded Gemstone. CinemaONE’s Gemstone theatre offers in-theatre dining
inclusive of cocktail, wine and beer service combined with convenient push button seat side service.
CinemaONE’s Gemstone facilities are equipped with digital projector systems, surround sound and fully
reclining seats.
In September 2018, CinemaONE constructed the first 4D theatre in Port of Spain. The 4DX theatre
introduces environmental effects such as fog, lightning, motion, rain and scents to the movie going
experience. The introduction of the 4DX theatre auditorium effectively marked the Company’s
emergence as a 6-screen multiplex at its flagship location at One Woodbrook Place, Port of Spain.
In the first quarter of financial year 2019, CinemaONE consummated its Initial Public Offering (IPO) to
emerge on 21 November 2018 as the first Company listed on the Small and Medium Enterprise
Exchange of the Trinidad and Tobago Stock Market. CinemaONE’s ordinary shares have since that
date been publicly traded on the Trinidad and Tobago Stock Market under the symbol “CINE1”.
In the first quarter of fiscal 2020, CinemaONE secured a 15 Year $40M loan facility with Guardian Group
Trust Limited (GGTL) (Note 12). This debt financing strengthened the Company’s capacity to endure the
unprecedented and extended Covid-19 global public health crisis which commenced in March 2020
(Note 24) and adversely distorted CinemaONE’s financial performance in financial years 2020, 2021 and
2022, given the government’s mandated closure of the Company’s theatre operations for protracted
periods in the interest of public safety. In financial year 2022, government also imposed safe zone
regulations which limited customer patronage to Covid-19 vaccinated persons only while also restricting
capacity to 50%. Despite the continued impact of Covid-19 in financial year 2022, CinemaONE
experienced a significant rebound in operations as the effects of the Covid-19 pandemic waned globally
and the government lifted all of its restrictive public health and safety measures on April 4, 2022.
As the close of financial year 2022 CinemaONE had substantially completed phase one of the
Company’s new theatre expansion site located at Gulf City Mall 6
th
floor. The Company imminently
plans to open its Gemstone format theatre at Gulf City Mall featuring 100% recliner seats and seat side
service before the end of Q1 of financial year 2023. The phase one opening features leading edge
cinema technology with laser projectors and is outfitted for full service in the largest two auditoriums
offering 55% of the designed seating capacity.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(11)
2 Significant accounting policies
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, except for the adoption of
new and amended standards as set out in Note 2 (w).
a. Basis of preparation
These financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee
(IFRS IC) applicable to companies reporting under IFRS. The financial statements comply with
IFRS as issued by the International Accounting Standards Board (IASB).
See Note 24 Impact of Covid-19 for a detailed explanation on the effects of the global pandemic
over the Company.
b. Basis of measurement
These financial statements have been prepared on the historical cost basis.
c. Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The financial
statements are presented in Trinidad and Tobago dollars which is the Company’s functional and
presentation currency.
Transactions in foreign currencies are translated to the functional currency of the Company at
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies at the reporting date are retranslated to the functional currency at the exchange
rate at that date.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of
profit or loss and other comprehensive income, within finance costs.
Foreign currency differences arising on retranslation are recognised in the statement of profit or
loss and other comprehensive income.
d. Use of estimates and judgements
In preparing these financial statements, management has made judgements, estimates and
assumptions that affect the application of the Company’s accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates
are recognised prospectively.
Information about judgements made in applying policies that have the most significant effect on
the amounts recognised in the financial statements is included in the Note 2 (x) Critical Accounting
Estimates and Judgments in applying policies.
The Company has applied the accounting policies as set out below to the financial statements.
These policies have been consistently applied to all years presented, unless otherwise stated.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(12)
2 Significant accounting policies (continued)
e. Plant and equipment
(i) Recognition
Items of plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost
of self-constructed assets includes the cost of materials and direct labour, any other costs
directly attributable to bringing the assets to a working condition for their intended use, the
costs of dismantling and removing the items and restoring the site on which they are located,
and capitalised borrowing costs. Purchased software that is integral to the functionality of the
related equipment is capitalised as part of the equipment.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the
end of each reporting period. An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than its estimated recoverable
amount.
The cost of replacing a component of an item of plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied within
the component will flow to the Company, and its cost can be measured reliably. The carrying
amount of the replaced component is derecognised. The costs of the day-to-day servicing
plant and equipment are recognised in profit or loss as incurred.
The Company has no dismantlement costs regarding the operation of its fixed assets.
When parts of an item of plant and equipment have different useful lives, they are accounted
for as separate items of plant and equipment. All other repairs and maintenance are charged
to profit or loss during the reporting period in which they are incurred.
(ii) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components
of individual assets are assessed and if a component has a useful life that is different from the
remainder of that asset, that component is depreciated separately.
Depreciation is calculated for the following items using the reducing balance basis over the
estimated useful lives of each item of plant and equipment at the following rates:
Motor vehicle - 25%
Computers - 33.3%
Concession equipment - 25%
Theatre equipment - 25%
Furniture and fixtures - 15%
Depreciation is calculated for the following items using the straight-line basis for the remaining
life of the lease agreement:
Leasehold improvements - Life of lease – 15-23 years (2021: 15-23 years)
Theatre systems - Life of the agreement – 15-17 years (2021: 15 years)
Depreciation methods, useful lives and residual values are reviewed at each reporting date
and adjusted if appropriate.
(iii) Disposals
The gain or loss on disposal of plant and equipment is determined by comparing the
proceeds from disposal with the carrying amount of the plant and equipment and is
recognised net within other income/other expenses in the statement of profit or loss and
other comprehensive income.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(13)
2 Significant accounting policies (continued)
f. Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is determined using
the weighted average method, and includes expenditure incurred in acquiring the inventories
and bringing them to their existing location and condition. Net realisable value is the estimated
selling price in the ordinary course of business.
g. Financial instruments
(i) Classification
The Company classifies its financial assets as those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets
and the contractual terms of the cash flows.
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on the trade-date, the
date on which the Company commits to purchase or sell the asset. Financial assets are
derecognised when the rights to receive cash flows from the financial assets have expired or
have been transferred and the Company has transferred substantially all the risks and
rewards of ownership.
(iii) Measurement
Financial assets with embedded derivatives are considered in their entirety when
determining whether their cash flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model
for managing the asset and the cash flow characteristics of the asset. The following is the
measurement category into which the Company classifies its debt instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows where those
cash flows represent solely payments of principal and interest are measured at
amortised cost. Interest income from these financial assets is included in finance income
using the effective interest rate method. Any gain or loss arising on derecognition is
recognised directly in profit or loss and presented in other gains/(losses) together with
foreign exchange gains and losses. Impairment losses are presented as separate line
item in the statement of profit or loss and other comprehensive income.
(iv) Impairment
The Company assesses on a forward-looking basis the expected credit loss associated with
its debt instruments carried at amortised cost. The impairment methodology applied
depends on whether there has been a significant increase in credit risk.
For trade receivables, the Company applies the simplified approach permitted by IFRS 9,
which requires expected lifetime losses to be recognised from initial recognition of the
receivables.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(14)
2 Significant accounting policies (continued)
h. Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. They are generally due for settlement within 30 days and therefore are
all classified as current. Trade receivables are recognised initially at the amount of consideration
that is unconditional unless they contain significant financing components, when they are
recognised at fair value. The Company holds the trade receivables with the objective to collect the
contractual cash flows and therefore measures them subsequently at amortised cost using the
effective interest method less loss allowance. Details about the Company’s impairment policies
and the calculation of the loss allowance are provided in Note 3 (a) (ii).
i. Cash and cash equivalents
Cash comprises cash on hand and cash in bank. Cash equivalents are short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known
amounts of cash and that are subject to an insignificant risk of changes in value.
j. Impairment of non-financial assets
The carrying amounts of the Company’s assets are reviewed at each reporting date to determine
whether there is any indicator of impairment. If such an indicator exists, the asset’s recoverable
amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset
or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in
the statement of profit or loss and other comprehensive income. The recoverable amount of other
assets is the greater of their net selling price and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
An impairment loss is reversed if there has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
k. Borrowings
Borrowings are recognised initially at fair value less attributable transaction costs incurred.
Borrowings are subsequently carried at amortised cost, any difference between the proceeds (net
of transaction costs) and the redemption value is recognised in the statement of profit or loss and
other comprehensive income over the period of the borrowing using the effective interest rate
method.
Borrowings are classified as current liabilities unless the Company has an unconditional right
to defer settlement of the liability for at least 12 months after the reporting period.
Borrowings are removed from the statement of financial position when the obligation
specified in the contract is discharged, cancelled or expired. The difference between the
carrying amount of a financial liability that has been extinguished or transferred to another
party and the consideration paid, including any noncash assets transferred or liabilities
assumed, is recognised in profit or loss as other income or finance costs.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(15)
2 Significant accounting policies (continued)
k. Borrowings (continued)
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to
the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee
is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that
some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to which it relates.
Borrowing costs that are directly attributable to the acquisition, construction or production of an
asset that takes a substantial period of time to get ready for its intended use or sale, is capitalised.
l. Trade and other payables
Trade and other payables are recognised initially at fair value and are subsequently measured at
amortised cost These amounts represent liabilities for goods and services provided to the
Company prior to the end of the financial year which are unpaid. The amounts are unsecured and
are usually paid within 60 days of recognition. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months after the reporting period. They are
recognized initially at their fair value and subsequently measured at amortised cost using the
effective interest method.
m. Deferred revenue
Sponsorship income that compensates the Company for expenses incurred is initially recorded as
deferred income on the statement of financial position and is recognised as revenue in the
statement of profit or loss and other comprehensive income on a systematic basis over the period
of the sponsorship in the same periods in which the expenses are incurred.
n. Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a
result of past events, it is more likely than not that an outflow of resources will be required to settle
the obligation, and a reliable estimate of the amount of the obligation can be made. Provisions are
not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any one item included in the same
class of obligations may be small. Provisions are measured at the present value of management’s
best estimate of the expenditure required to settle the present obligation at the end of the reporting
period. The discount rate used to determine the present value is a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The increase
in the provision due to the passage of time is recognized as interest expense.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(16)
2 Significant accounting policies (continued)
o. Leases
Measurement
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease
liabilities include the net present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
Payment allocation
Lease payments are allocated between principal and finance cost. The finance cost is charged to
the statement of profit or loss and other comprehensive income over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each
period.
In accordance with the IFRS 16 standard, the Company has separated the lease components from
non-lease components for each of the lease contracts. In general, activities that do not transfer a
good or service to the lessee are not components in the respective lease contracts.
The variable lease payments for all of the Company’s leases are not based on an index or rate.
Instead, they are linked to a percentage of the Company’s sales, meaning that these payments are
derived from the lessee’s performance from the underlying asset and therefore not considered to
be components of the lease.
The Company’s lease agreement for the Gemstone and 4DX theatre spaces at One Woodbrook
Place includes common area maintenance (CAM) costs, under which the Company is charged for
its proportionate share of CAM within the multi-unit real estate development of One Woodbrook
Place. Such CAM costs are inclusive of utilities, security and real estate cleaning; hence the
variability does not arise from an index and therefore charges are expensed to the statement of
profit or loss and other comprehensive income in the period to which they relate due to both their
variability in nature and because they represent a non-lease component that transfers a good or
service other than the right of use to the demised premises.
The IFRS 16 standard defines initial direct costs as incremental costs that would not have been
incurred if a lease had not been obtained. The Company has included all initial direct costs, such
as legal fees and stamp duty fees directly attributable to lease execution, in the initial
measurement of the right-of-use asset.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(17)
2 Significant accounting policies (continued)
o. Leases (continued)
The Company has considered the lease term for each of its lease contracts to be:
• the non-cancellable period of the lease, together with
• optional renewable periods if the tenant is reasonably certain to extend; and
• periods after an optional termination date if the tenant is reasonably certain not to terminate
early.
In considering the determination of its respective lease terms, the Company has considered all
relevant facts and circumstances that create an economic incentive to exercise options to renew.
As a practical expediency given variations in dates such as:
• the date on which respective landlords have made underlying assets fully available for use,
albeit to initiate a rent-free, significant tenant outfitting period
• the execution dates of leases (which in the case of One Woodbrook Place, were subsequent
to the opening date of the respective theatres)
• the Opening Date from when rent payments would commence.
The Company has determined the commencement date of each lease to uniformly be the opening
date of each of its respective cinema sites, which is also when payment obligations commence for
the lessees.
In accordance with the IFRS 16 standard, the tenant discounts its future lease payments using the
interest rate implicit in the leases if this can be readily determined. Otherwise, the tenant uses its
incremental borrowing rate. Due to the lack of information that is required to assess the implicit
interest rate in its leases such as the fair value of the underlying assets and any initial direct costs
incurred by the landlord, CinemaONE Limited has judged that the Company is unable to determine
the interest rate implicit in its leases. Therefore, the Company has used its incremental borrowing
rate.
The incremental borrowing rates can be defined as the rate of interest that the Company would
have to pay to borrow, over a similar term and with a similar security, the funds necessary to
obtain an asset of a similar value to the cost of the right-of-use asset in a similar economic
environment.
p. Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
ordinary shares are recognised as a deduction from equity, net of any tax effects.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(18)
2 Significant accounting policies (continued)
q. Revenue recognition
The following specific recognition criteria must also be met before revenue is recognised:
- Film revenue
Revenue is generated from sales of box office tickets purchased at the theatre for the
exhibition of movies from film studios. Revenue is recognised on sale of box office tickets.
The performance obligation is satisfied by showing the movie to customers when they obtain
control via the purchase of a ticket.
- Food and beverage revenue
Revenue is also received from the delivery of food and beverages, including alcoholic
beverages for consumption on site. Revenue is recognised on sale of concession items.
- Sponsorship revenue
Sponsorship revenue is allocated by business categories including but not exclusive to Title
sponsor, Educational Sponsor and Financial sponsor categories. Sponsorship revenue is
recognised as the service is rendered.
The performance obligation is satisfied by fulfilling the contractual obligations to the sponsor.
- Gift certificates revenue
Gift certificates are purchased to be used as box office tickets and/or food and beverages.
Revenue is recognised on the redemption of the gift certificates.
No significant element of financing is deemed present as the majority of the Company’s revenue
is generated without credit terms which is consistent with market practice. Only sponsorship,
advertising and event sales are made with credit terms up to 30 days.
r. Taxation
Income tax expense comprises current and deferred tax. Income tax expense is recognised in
profit or loss except to the extent that it relates to items recognised directly in equity, in which case
it is recognised in equity or in other comprehensive income. Current tax is the expected tax payable
or receivable on the taxable income or loss for the period, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted
at the reporting date.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(19)
2 Significant accounting policies (continued)
r. Taxation (continued)
Deferred tax asset and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis, or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary
differences, to the extent that it is probable that future taxable profits will be available against which
the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
s. Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating
sick leave that are expected to be settled wholly within 12 months after the end of the period in
which the employees render the related service are recognised in respect of employees’ services
up to the end of the reporting period and are measured at the amounts expected to be paid when
the liabilities are settled. The liabilities are presented as current employee benefit obligations in the
statement of financial position. The Company has no pension plan and there are no other employee
benefits provided.
t. Dividend policy
Provision is made for the amount of any dividend declared, being appropriately authorised and no
longer at the discretion of the entity, on or before the end of the reporting period but not distributed
at the end of the reporting period.
u. Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing: the profit/(loss) attributable to owners of
the Company by the weighted average number of ordinary shares outstanding during the financial
year.
v. Comparative information
Where necessary, comparative data has been adjusted to conform with changes in
presentation in the current year.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(20)
2 Significant accounting policies (continued)
w. (i) New, revised and amended standards and interpretations adopted
The Company has applied the following amendments for the first time for the annual
reporting period commencing October 1, 2021:
• Covid-19 Related Rent Concessions – amendments to IFRS 16
• Interest Rate Benchmark Reform – Phase 2 – amendments to IFRS 9, IAS 39,
IFRS 7, IFRS 4 and IFRS 16
The amendments listed above, did not have any impact on the amounts recognised
in prior periods and are not expected to significantly affect the current or future
periods.
The significant impact of Covid-19 Related Rent Concessions-amendment to IFRS
16 is described below.
On 28 May 2020, the IASB published an amendment to IFRS 16 that provides an
optional practical expedient for lessees to assess whether a rent concession related
to Covid-19 is a lease modification.
Lessees can elect to account for such rent concessions in the same way as they would if
they were not lease modifications. In many cases, this has resulted in accounting for the
concession as variable lease payments in the periods in which the event or condition that
triggers the reduced payment occurred.
The practical expedient only applies to rent concessions occurring as a direct consequence
of the Covid-19 pandemic and only if all of the following conditions are met:
a. the change in lease payments results in revised consideration for the lease that is
substantially the same as, or less than, the consideration for the lease immediately
preceding the change;
b. any reduction in lease payments affects only payments due on or before 30 June 2021;
and
c. there is no substantive change to other terms and conditions of the lease.
The Company recognised a credit to profit or loss of $376,815 (2021: $345,530) as a result
of the application of the practical expedient. See Note 5.
w. (ii) New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for September 30, 2022,
reporting periods and have not been early adopted by the Company. These standards,
amendments or interpretations are not expected to have a material impact on the entity in
the current or future reporting periods and on foreseeable future transactions.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(21)
2 Significant accounting policies (continued)
x. Critical accounting estimates and judgements in applying policies
The development of estimates and the exercise of judgement in applying accounting policies
may have a material impact on the Company’s reported assets, liabilities, revenues and
expenses. The items which may have the most effect on these financial statements are set
out below:
Income taxes
Significant judgement is required in determining the provision for income taxes. There are
many transactions and calculations for which the ultimate tax determination is uncertain. The
Company recognises liabilities for anticipated tax audit issues based on estimates of whether
additional taxes will be due. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the income tax and deferred
tax provisions in the period in which such determination is made. Current and deferred
income tax balances are disclosed in the statement of financial position. Details of the
expense for the year are shown in Note 7.
Deferred tax asset
The deferred tax assets of $3,572,394 includes an amount of $3,387,150 which relates to
carried-forward tax losses of the Company. The Company has concluded that the deferred
tax assets will be recoverable using the estimated future taxable income based on the
approved business plans and budgets for the Company. The Company is expected to
generate taxable income from 2023 onwards. The losses can be carried forward indefinitely
and have no expiry date.
Impairment
The Company tests annually whether any non-financial assets/cash generating units have
suffered impairment. For the purposes of the impairment test, the cash-generating unit was
determined to be at the Company level. The recoverable amount of the cash-generating unit
has been determined based on value in use calculations. These calculations require the use
of estimates. The significant assumptions and sensitivity analysis are disclosed in Note 24.
3 Financial risk management
a. Financial risk management objectives
The Company’s activities expose it to a variety of financial risks: market risk, credit risk, and liquidity
risk. Risk management is carried out in line with policies approved by the Board of Directors. The
Board provides written principles for overall risk management, as well as written policies covering
specific areas, such as market risk, credit risk, and the investment of excess liquidity.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(22)
3 Financial risk management (continued)
a. Financial risk management objectives (continued)
(i) Market risk
This comprises foreign exchange risk, cash flow and fair value interest rate risk and price risk.
(a) Foreign exchange risk
The Company is exposed to foreign exchange risk arising from various currency exposures,
primarily to the US dollar. Foreign exchange risk arises from future commercial transactions
and recognised financial assets and financial liabilities. The Company currently holds a USD
Loan and a USD Monthly Income Fund with Guardian Group Trust Limited. If the currency
had weakened/strengthened by 1% against the US dollar with all other variables held
constant, the loss for the year would have been $288,357 (2021: $281,539).
The Company actively manages this risk by matching receipts and payments in the sale
currency and monitoring movements in exchange rates. The Company has also negotiated
TT dollar partial settlements with lenders such as Guardian Group Trust Limited and key
operational and construction vendors. The Company seeks to purchase US dollars, when
made available, from its bankers. Such policies to manage foreign currency are the same as
for prior year.
(b) Price risk
The Company’s exposure to securities price risk arising from investments is nil.
(c) Interest rate risk
The Company had no significant interest-bearing assets, the Company’s income and
operating cash flows are substantially independent of changes in market interest rates.
Interest rate risk arises from the possibility that changes in interest rates will affect future
cash flows or the fair value of financial instruments. Interest rate risk arises on interest-
bearing financial instruments recognised in the statement of financial position.
The Company’s exposure to changes in market interest rates relates primarily to the long-
term debt obligation, with the interest rate being TT Dollar prime minus 1.90% with a floor
between 7% and 9%. The exposure to interest rate risk on cash held on deposit is not
significant. Non-interest bearing borrowings were on 2% of borrowings in 2022 (2021: 2%)
and the balance of borrowings were secured at fixed rates.
The exposure of the Company’s borrowings to interest rate changes are as follows:
2022 2021
$ $
Less than one year 3,090,151 143,270
Between 1 - 5 years 9,396,700 9,182,583
12,486,851 9,325,853
The Board of Directors is ultimately responsible for the establishment and oversight of the
Company’s risk management framework. The main financial risks of the Company relate to
the availability of funds to meet business needs and the risk of default by counterparties to
financial transactions. The Company monitors the financial risks that arise in relation to
underlying business needs and operates within clear policies and stringent parameters. The
Company’s principal financial liabilities comprise bank loans (Note 12). There have been no
changes to the way the Company manages this exposure compared to the prior year.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(23)
3 Financial risk management (continued)
a. Financial risk management objectives (continued)
(ii) Credit risk management
Credit risk arises from deposits into bank as well as credit exposures for receivables related
to sponsorship arrangements and special events. The Company has policies in place to
ensure that the delivery of sponsorship services and events are made to customers with an
appropriate credit history. Credit exposures arise from the delivery of services to customers,
including outstanding receivables. Deposits are only made to reputable commercial banks.
The due from parent company balance arises mainly from administrative services provided
by the Company.
In assessing credit losses associated with receivables, such as sponsorship arrangements
and special events, the Company applies the simplified approach permitted by IFRS 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
The credit quality of customers, their financial position, past experience and other factors are
taken into consideration in assessing credit risk and are regularly monitored through the use
of credit terms. Management does not expect any losses from non-performance by
counterparties.
There have been no changes to the way the Company manages this exposure compared to
the prior year.
Maximum exposure to credit risk
The accounting policies for financial instruments have been applied to the line items below:
2022 2021
$ $
Other receivables (Note 9) 240,336 80,729
Due from parent company (Note 6) 3,018,624 2,900,897
Cash at bank and on hand (Note 10) 1,573,354 2,085,776
4,832,314 5,067,402
Collateral is not held for any balances exposed to credit risk, with the exception of a
guarantee held for the due from parent company balance, which can be found in Note 6.
The simplified approach
The Company applies the IFRS 9 simplified approach to measuring expected credit losses
for Trade and other receivables. The simplified approach eliminates the need to calculate
12-month Expected Credit Loss and to assess when a significant increase in credit risk has
occurred. Accordingly, a lifetime expected loss allowance is used from day 1. To measure
the lifetime loss allowance, the Company first considers whether any individual customer
accounts require specific provisions. Loss rates are then assigned to these accounts based
on an internal risk rating system considering various qualitative and quantitative factors.
The general approach
The Company applies the IFRS 9 general approach to measuring expected credit losses
for intercompany loans to its parent company. The Company considers such parent
company loans as low credit risks given past performance but still maintains offsetting
payable balances as credit enhancements to assist in managing expected credit loss.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(24)
3 Financial risk management (continued)
a. Financial risk management objectives (continued)
(ii) Credit risk management (continued)
Incorporation of forward-looking information
Historical loss rates for trade and other receivables are adjusted to reflect current and forward-
looking information on macroeconomic factors affecting the ability of the customers to settle the
receivables. The Company uses indicators such as, concentration risk and macroeconomic
fundamentals of the country in which it sells its goods and services to be the most relevant
factors, and accordingly adjusts the historical loss rates based on expected changes in these
factors.
Assets written off
Financial assets are written off when there is no reasonable expectation of recovery, such as a
debtor failing to engage in a repayment plan with the Company. The Company categorises a
receivable for write off when a debtor fails to make contractual payments, even after several
attempts at enforcement and/or recovery efforts. Where receivables have been written off, the
Company continues to engage in enforcement activity to attempt to recover the receivable due.
Where recoveries are made, these are recognised in statement of profit or loss and other
comprehensive income.
Summary of ECL calculations
a) The simplified approach (trade and other receivables)
A summary of the assumptions underpinning the Company’s expected credit loss model
under the simplified approach is further analysed below showing:
• Specific provisions using the Company’s internal grading system
Trade and other receivables assessed for specific provisions are identified based on certain
default triggers (e.g., customers with significant cash flow issues, business model issues and
other relevant factors). Once the population for specific provisions is identified, it is
segregated from the rest of the portfolio and an ECL is calculated based on an individual
rating assignment.
The following is a summary of the ECL on trade and other receivables from specific
provisions:
Aging Bucket Average Estimated Expected
ECL rate EAD credit loss
% $ $
3-12 months due -- 240,336 --
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(25)
3 Financial risk management (continued)
a. Financial risk management objectives (continued)
(iii) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and short-term funds
and the availability of funding through an adequate amount of committed credit facilities.
Due to the dynamic nature of the underlying business, the Company aims at maintaining
flexibility in funding by keeping committed credit lines available.
The Company’s liquidity risk management process is measured and monitored by senior
management. This process includes monitoring current cash flows on a frequent basis,
assessing the expected cash inflows as well as ensuring that the Company has adequate
committed lines of credit to meet its obligations. There have been no changes to the way
the Company manages this exposure compared to the prior year.
Due to the Covid-19 global pandemic, the Company has been observing a very slow
increase of the revenue level and as such management have taken appropriate measures
to keep the reduction of the operating expenses to minimise the financial risk.
The table below analyses the Company’s financial liabilities based on the remaining period
at the financial position date to the contractual maturity date.
Financial liabilities
Between
Carrying Contractual Less than 2 to 5 Over
amount cash flow 1 year years 5 years
$ $ $ $ $
At 30 September 2022
Borrowings 47,260,081 82,801,021 4,522,500 8,561,861 69,716,660
Leases 7,010,935 17,535,942 405,331 2,051,967 15,078,644
Shareholder loans 1,164,355 1,271,718 166,968 1,060,405 44,345
Accruals and other payables
(excluding statutory liabilities) 4,616,541 4,616,541 4,616,541 -- --
Total 60,051,912 106,225,222 9,711,340 11,674,233 84,839,649
At 30 September 2021
Borrowings 44,586,831 80,127,771 788,467 13,571,225 65,768,079
Leases 7,386,218 18,104,351 375,282 2,172,874 15,556,195
Shareholder loans 814,212 1,045,936 146,352 634,834 264,750
Deferred revenue 9,120 9,120 9,120 -- --
Accruals and other payables -
(excluding statutory liabilities) 2,499,675 2,499,675 2,499,675 -- --
Total 55,296,056 101,786,853 3,818,896 16,378,933 81,589,024
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(26)
3 Financial risk management (continued)
b. Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to
continue as a going concern, in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure. In order to maintain or adjust the capital
structure the Company may adjust the amount of dividends paid to shareholders, return capital to
shareholders or issue new shares. There were no changes compared to the financial year ended
30 September 2022.
There are no particular strategies to determine the optimal capital structure. There are externally
imposed capital maintenance requirements to which the Company is subjected to, and with which
it was in compliance for the year ended 30 September 2022 and 30 September 2021.
The gearing ratios as at 30 September 2022 and 30 September 2021 were as follows:
2022 2021
$ $
Borrowings (Note 12) 38,926,693 38,752,511
Lease liabilities (Note 5) 7,010,935 7,386,218
Shareholder loans (Note 13) 1,164,355 814,212
Less: cash on hand and at bank (Note 10) (1,573,354) (2,085,776)
Net debt 45,528,629 44,867,165
Total equity 21,102,140 22,522,736
Total capital 66,630,769 67,389,901
Gearing ratio 68% 67%
The Company’s high gearing ratio is mainly due to the effect of IFRS 16 and the deferred
amortisation of the facility from Guardian Group Trust Limited which was agreed to as a result of the
Covid-19 pandemic.
c. Fair value estimation
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction. Market price is used to determine fair
value where an active market (such as a recognised stock exchange) exists as it is the best evidence
of the fair value of a financial instrument. The standard requires disclosure of fair value measurement
by level using the following fair value measurement hierarchy:
(i) Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
(ii) Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset
or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
(iii) Level 3 - Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs).
Due to the short-term nature of prepayments and other receivables and accruals and other payables,
their carrying amounts are considered to be the same as their fair values. Estimates and judgements
are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
All of the Company’s financial assets and liabilities are carried at amortised cost.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(26)
3 Financial risk management (continued)
b. Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to
continue as a going concern, in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure. In order to maintain or adjust the capital
structure the Company may adjust the amount of dividends paid to shareholders, return capital to
shareholders or issue new shares. There were no changes compared to the financial year ended
30 September 2022.
There are no particular strategies to determine the optimal capital structure. There are externally
imposed capital maintenance requirements to which the Company is subjected to, and with which
it was in compliance for the year ended 30 September 2022 and 30 September 2021.
The gearing ratios as at 30 September 2022 and 30 September 2021 were as follows:
2022 2021
$ $
Borrowings (Note 12) 38,926,693 38,752,511
Lease liabilities (Note 5) 7,010,935 7,386,218
Shareholder loans (Note 13) 1,164,355 814,212
Less: cash on hand and at bank (Note 10) (1,573,354) (2,085,776)
Net debt 45,528,629 44,867,165
Total equity 21,102,140 22,522,736
Total capital 66,630,769 67,389,901
Gearing ratio 68% 67%
The Company’s high gearing ratio is mainly due to the effect of IFRS 16 and the deferred
amortisation of the facility from Guardian Group Trust Limited which was agreed to as a result of the
Covid-19 pandemic.
c. Fair value estimation
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction. Market price is used to determine fair
value where an active market (such as a recognised stock exchange) exists as it is the best evidence
of the fair value of a financial instrument. The standard requires disclosure of fair value measurement
by level using the following fair value measurement hierarchy:
(i) Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
(ii) Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset
or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
(iii) Level 3 - Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs).
Due to the short-term nature of prepayments and other receivables and accruals and other payables,
their carrying amounts are considered to be the same as their fair values. Estimates and judgements
are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
All of the Company’s financial assets and liabilities are carried at amortised cost.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(27)
4 Plant and equipment
Furniture Work
Leasehold Theatre Concession and in
improvements equipment Computers equipment fixtures progress Total
$ $ $ $ $ $ $
Year ended 30 September 2022
Cost
Balance at 1 October 2021 45,314,891 21,679,402 220,801 1,394,689 121,288 20,182,875 88,913,946
Additions -- 3,276 -- -- -- 6,141,636 6,144,912
Transfer from prepayments -- -- -- -- -- 784,084 784,084
Balance at 30 September 2022 45,314,891 21,682,678 220,801 1,394,689 121,288 27,108,595 95,842,942
Accumulated depreciation
Balance at 1 October 2021 (13,359,045) (10,538,154) (195,024) (1,128,501) (72,551) -- (25,293,275)
Charge for the year (2,325,410) (343,048) (8,584) (66,547) (7,310) -- (2,750,899)
Balance at 30 September 2022 (15,684,455) (10,881,202) (203,608) (1,195,048) (79,861) -- (28,044,174)
Year ended 30 September 2021
Cost
Balance at 1 October 2020 45,314,891 21,679,402 220,801 1,394,689 121,288 17,088,646 85,819,717
Additions -- -- -- -- -- 3,094,229 3,094,229
Balance at 30 September 2021 45,314,891 21,679,402 220,801 1,394,689 121,288 20,182,875 88,913,946
Accumulated depreciation
Balance at 1 October 2020 (11,033,635) (9,127,568) (182,154) (1,039,772) (63,951) -- (21,447,080)
Charge for the year (2,325,410) (1,410,586) (12,870) (88,729) (8,600) -- (3,846,195)
Balance at 30 September 2021 (13,359,045) (10,538,154) (195,024) (1,128,501) (72,551) -- (25,293,275)
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(28)
4 Plant and equipment (continued)
Furniture Work
Leasehold Theatre Concession and in
improvements equipment Computers equipment fixtures progress Total
$ $ $ $ $ $ $
Net book amount
Balance at 30 September 2022 29,630,436 10,801,476 17,193 199,641 41,427 27,108,595 67,798,768
Balance at 30 September 2021 31,955,846 11,141,248 25,777 266,188 48,737 20,182,875 63,620,671
Balance at 30 September 2020 34,281,256 12,551,834 38,647 354,917 57,337 17,088,646 64,372,637
Work-in-progress as at 30 September 2022 represents capital expenditure for construction activity associated with construction of a new movie theatre
multiplex in Gulf City Mall, San Fernando.
Interest on borrowings in the amount of $2,249,227 (2021: $2,058,546) was capitalised during the year.
Prepayments of $784,084 from prior years were transferred to work in progress and $506,925 (2021: $1,291,009) remains classified under prepayments to
reflect deposits on items that have not yet been received nor installed.
See Note 12 for the assets pledged as security for borrowings.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(29)
5 Leases 2022 2021
$ $
Right of use assets
Buildings 5,582,852 6,000,336
Lease liabilities
Current 405,331 375,282
Non-current 6,605,604 7,010,936
Total lease liabilities 7,010,935 7,386,218
(i) The statement of profit or loss and other comprehensive income shows the following amounts
relating to leases:
Depreciation 417,483 417,483
Expense (included in finance costs) 529,065 556,855
Covid-19 related rent concessions (376,815) (345,530)
Total cashflow for leases in 2022 was (527,532) (226,089)
6 Related party transactions
(i) Due from parent company
Giant Screen Entertainment Holdings Limited 3,018,624 2,900,897
This balance relates to transactions paid by the Company for satisfaction of parent company
obligations. Such obligations include financing, legal and other professional service fees, foreign
travel and general business expenses. The receivable was converted to a loan with effect from 2
January 2020. This loan bears interest at 4% per annum and the balance increased during financial
year 2022 due to accrued interest income. The principal repayment is due at maturity on 2 January
2025.
(ii) Key management personnel
Key management personnel receive compensation in the form of short-term employee benefits and
post-employment benefits.
Key management personnel received compensation of $773,118 (2021: $576,659) for the year.
(iii) Transactions within the period
This loan bears interest at 4% per annum and the balance increased during financial year 2022 due
to accrued interest income.
Interest Income accrued and repayments were of $117,726 (2021: - $214,895) for the year.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(30)
7 Taxation
(i) Composition of deferred tax asset and liability
The analysis of deferred tax asset and (liability) is as follows:
Deferred tax asset
Accumulated
tax IFRS
losses 16 Total
$ $ $
At 1 October 2021 2,952,258 207,883 3,160,141
Credit to profit or loss 460,193 (22,639) 437,554
At 30 September 2022 3,412,451 185,244 3,597,695
At 1 October 2020 1,207,150 75,708 1,282,858
Credit to profit or loss 1,745,108 132,175 1,877,283
At 30 September 2021 2,952,258 207,883 3,160,141
Deferred tax liability
Accelerated
tax
depreciation Total
$ $
At 1 October 2021 (2,310,757) (2,310,757)
Charge to profit or loss (158,141) (158,141)
At 30 September 2022 (2,468,898) (2,468,898)
At 1 October 2020 (1,523,223) (1,523,223)
Charge to profit or loss (787,534) (787,534)
At 30 September 2021 (2,310,757) (2,310,757)
Deferred income taxes are calculated on all temporary differences under the liability method
using a principal tax rate of 15% (2021: 15%).
2022 2021
$ $
(ii) Taxation
Deferred tax credit (279,413) (1,089,749)
Business levy -- 14,000
Green fund levy -- 7,001
Prior year over provision - business levy (162,744) --
(442,157) (1,068,748)
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(31)
7 Taxation (continued)
(iii) Reconciliation of effective tax rate 2022 2021
$ $
Loss for the year (1,862,753) (8,066,231)
Tax at the statutory tax rate – 15% (2021: 10%) (279,413) (1,209,935)
Business levy -- 14,000
Green fund levy -- 7,001
Effect of deferred tax of change in tax rate -- 120,186
Prior year over provision - business levy (162,744) --
(442,157) (1,068,748)
For the year ended 30 September 2022, the Company was not liable to corporation tax as a result of
accumulated tax losses of $22,580,997 (2021: $19,681,724).
As a result of the Company being listed on the Small and Medium Enterprise Exchange of the
Trinidad and Tobago Stock Market in 2018, section 3(2) of the Corporation Tax Act provides for
companies listed to be assessed with a corporation tax rate of 15% instead of 10% as per
amendment of the Corporation Tax Act, Chap 75:02 dated 24 December 2020. Also, it benefits from
a zero percent on Business Levy and Green Fund Levy for the first five years from listing.
8 Inventories
Food and beverage 89,053 98,412
The cost of inventories recognised as an expense and included in cost of sales amounted to
$1,209,127 (2021: $192,786). Refer to Note 17.
9 Prepayments and other receivables
Prepayments 875,581 1,688,060
Value Added Tax recoverable 1,180,446 1,204,800
Other receivables 240,337 80,729
2,296,364 2,973,589
As at 30 September 2022, there was no impairment of other receivable balances (2021: $547,918).
Given the nature of operations, goods and services are paid immediately (see Revenue Recognition
Accounting Policy Note). Other receivables balances are related to sponsorship agreements that have not
been impaired, therefore the expected lifetime credit loss is deemed to be nil.
Details about the Company’s classification and the calculation of the loss allowance are provided in Note
3. Due to the short-term nature of the current prepayments and other receivables, their carrying amounts
are considered to be the same as their fair value. Information about the impairment of prepayments and
other receivables and the Company's exposure to credit risk, market risk and liquidity risk can be found in
Note 3.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(32)
10 Cash and cash equivalents
2022 2021
$ $
Cash on hand and at bank 209,098 39,661
Short-term deposit 1,364,256 2,046,115
1,573,354 2,085,776
The short-term deposit represents a USD Monthly Income Fund held at Guardian Asset Management
Limited.
11 Share capital
Authorised capital
Unlimited ordinary shares of no par value
Issued and fully paid capital
6,406,295 (2021: 6,406,295) ordinary shares of no par value 32,579,503 32,579,503
Analysis of ordinary shares movement is as follows:
2022 2021
No. of No. of
Shares Amount Shares Amount
$ $
Balance at start of year 6,406,295 32,579,503 6,406,295 32,579,503
Balance at end of year 6,406,295 32,579,503 6,406,295 32,579,503
All shares rank equally with regard to the Company’s residual assets. The holders of ordinary
shares are entitled to receive dividends at the Company’s discretion and are entitled to one vote per
share at meetings of the Company.
12 Borrowings 2022 2021
$ $
Guardian Group Trust Limited-TTD 28,926,693 28,752,511
Guardian Group Trust Limited-USD 10,000,000 10,000,000
Total borrowings 38,926,693 38,752,511
Less current portion (2,923,183) --
Long term portion 36,003,510 38,752,511
The Guardian Group Trust Limited Loan agreement was executed on 31 October 2019 and
comprises Tranche A of $30,000,000 and Tranche B of USD1,500,000. The proceeds were used to
refinance facilities at First Caribbean International Bank (Trinidad and Tobago) Limited (CIBC) and
to finance construction costs of new theatre development at Gulf City Mall.
Interest: Tranche A: Each series will compound interest annually at their respective interest rate,
(the overall weighted interest rate of this facility is fixed at 8.438% per annum but adjusted to reflect
issue costs resulted in and effective interest rate (EIR) of 9%.
Tranche B: Fixed at 7% per annum (2021: 7%).
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(33)
12 Borrowings (continued)
Repayment: Tranche A principal will be paid upon maturity of each series commencing 16 January 2023
and ending on 31 October 2035. Interest will be similarly due from 16 January 2023, after the extended
Covid-19 moratorium period ends. Tranche B principal is due at maturity on 30 January 2026, and
interest due commenced from 30 January 2022 after the extended Covid-19 moratorium period ended.
The security for these loans is noted below.
(i) Debenture over the fixed and floating assets of the Company.
(ii) Assignment of all insurance(s) over the fixed and floating assets of the Company.
(iii) First demand mortgage over leasehold properties located at One Woodbrook Place and Gulf
City Mall.
(iv) Deed of assignment over IMAX and 4DX trademark licenses.
(v) Deed of charge over 4,704,646 ordinary shares of CinemaONE Limited held by Giant Screen
Entertainment Holdings Limited.
(vi) Assignment of key man insurance over Brian and/or Ingrid Jahra for a minimum of
TT$6,000,000 each. Guardian Life of the Caribbean to be given first preference to provide.
Covenants:
Within the financial period, Guardian Group Trust Limited granted a waiver of the debt service
coverage ratio for fiscal years 2020, 2021 and 2022, and any other additional covenant in
which compliance is likely to be adversely impacted due to the Covid-19 pandemic. The
waiver for 2022 for the EBITDA coverage ratio of 1.2x in financial year 2022 was granted on
2 December 2021 (see Note 25).
(i) A minimum debt service coverage ratio of 1.2x must be maintained throughout the
entire tenor of the facility.
(ii) A maximum leverage ratio of 70%. Such ratio to be calculated as the sum of all
interest-bearing debt divided by total assets.
Guardian Group Trust Limited also amended the loan agreement to additionally allow the facilities
to be used for the Company’s operational expenses and working capital in support of the Covid-19
pandemic.
13 Shareholder loans 2022 2021
$ $
Due to EFREENET Limited 406,490 403,110
Due to Jahra Ventures Limited 757,865 411,102
1,164,355 814,212
Less current portion (166,968) (143,270)
Net long-term debt 997,387 670,942
Amount due to EFREENET Limited in the amount of $406,491 is repayable in full at maturity on 31
December 2026. There is no interest on this loan. The amount due to Jahra Ventures Limited in the
amount of $757,865 is repayable on a monthly basis, inclusive of interest of 4.9% and matures on 31
October 2026. These shareholder loans do not carry any security.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(34)
14 Accruals and other payables 2022 2021
$ $
Current portion
Accruals and other payables 4,616,541 2,499,673
Interest payable 602,637 722,177
Statutory payable 327,989 330,784
5,547,167 3,552,634
Non-current portion
Interest payable 7,730,751 5,120,320
Statutory payable 273,812 373,183
8,004,563 5,493,503
The non-current portion of the interest payable represents the interest due on the Guardian Group Trust
Limited loan.
The non-current portion of the statutory payable relates to contributions due to the National Insurance
Board within three to six years.
The total amount of the statutory payable as at 30 September 2022 is $601,802 of which $327,989 is due
within twelve months.
15 Deferred revenue
Deferred revenue -- 9,120
The sponsorship deferred revenue relates to sponsorship income that is being amortised over the
period of the respective sponsorship agreements and other deferred revenue refers to gift certificates
not yet redeemed as tickets. Gift certificates are amortised to the statement of profit or loss and
comprehensive income when redeemed.
16 Revenue
Movie admissions 5,582,466 830,142
Food and beverage 3,886,895 583,792
Sponsorship, advertising and other 649,615 658,490
Gross revenue 10,118,976 2,072,424
Discounts (401,806) --
Net revenue 9,717,170 2,072,424
Discounts are related to complementary tickets and food and beverage.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(35)
17 Expenses by nature 2022 2021
$ $
Cost of sales
Movies 2,691,795 861,844
Food and beverage (Note 8) 1,209,127 192,786
Other 183,014 57,006
4,083,936 1,111,636
Administrative expenses
Depreciation – plant and equipment (Note 4) 2,750,898 3,846,195
Employee benefit expense (Note 21) 1,029,075 407,973
Rent 668,797 --
Depreciation – right of use asset (Note 5) 417,483 417,483
Repairs and maintenance 274,569 897,699
Audit and professional fees 165,400 192,881
Insurance 159,305 126,251
Legal fees and licenses 100,471 38,730
Cleaning 69,459 18,173
Communications costs 67,185 90,307
Professional fees 20,310 --
Office expenses 13,327 12,021
Miscellaneous 12,327 354,235
Motor vehicle expense 11,397 141
Operating supplies 6,992 39,626
Impairment of receivables (Note 9) -- 547,918
Subscriptions and publications -- 11,027
Prior year over provision of green fund levy (90,908) --
Rent waiver IFRS 16 Covid-19 concessions (Note 5) (376,815) (345,530)
5,299,272 6,655,130
18 Other income
Interest income 121,002 121,022
Gain on foreign exchange 52,475 93,773
USD income fund interest income 36,482 46,488
209,959 261,283
The gain on foreign exchange refers to USD transactions made during the financial period which resulted in
gains once translated into the local currency. The USD interest income is a result of interest received at
1.75% in the USD Monthly Income Fund held at Guardian Group Trust Limited. The interest income is a
result of interest earned on the related party loan (Note 6).
19 Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the year.
Loss attributable to equity holders of the Company (1,420,596) (6,997,483)
Weighted average number of ordinary shares in issue 6,406,295 6,406,295
Basic loss per share $(0.22) $(1.09)
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(36)
20 Net change in borrowings
(i)
Cash and
cash
equivalents
Commercial
loan
Shareholder
loans
Lease
liabilities
Total
$
$
$
$
$
Balance at
1 October 2021
2,085,776
(38,752,511)
(814,212)
(7,386,218)
(44,867,165)
Acquisitions
--
(174,182)
(486,607)
(152,249)
(813,038)
Cashflows
(512,422)
--
136,464
527,532
151,574
Balance at
30 September 2022
1,573,354
(38,926,693)
(1,164,355)
(7,010,935)
(45,528,629)
Balance at
1 October 2020
3,104,068
(38,725,134)
(842,660)
(7,174,892)
(43,638,618)
Acquisitions
--
(27,377)
(34,000)
14,763
(46,614)
Cashflows
(1,018,292)
--
62,448
(226,089)
(1,181,933)
Balance at
30 September 2021
2,085,776
(38,752,511)
(814,212)
(7,386,218)
(44,867,165)
(ii) Net debt reconciliation
2022 2021
$ $
Cash on hand and at bank (Note 10) 1,573,354 2,085,776
Shareholder loans – repayable within one year (Note 13) (166,968) (143,270)
Lease liabilities – repayable within one year (Note 5) (405,331) (375,282)
Shareholder loans – repayable after one year (Note 13) (997,387) (670,942)
Borrowings - repayable after one year (Note 12) (38,926,693) (38,752,511)
Lease liabilities – repayable after one year (Note 5) (6,605,604) (7,010,936)
Net debt (45,528,629) (44,867,165)
21 Employee benefit expense
Salaries 880,927 343,544
National insurance 148,148 64,429
1,029,075 407,973
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(37)
22 Contingencies and commitments
The Company leases various properties expiring within 6 and 20 years. The leases have varying terms
and renewal rights. On renewal, the terms of the leases can be renegotiated. From 1 October 2019, the
Company has recognised right of use assets for these leases.
(i) Not included in the above commitments (as well as Note 5) are contingent rental payments which
are based on a percentage of the revenue earned as per the various lease agreements.
(ii) The Company currently has no material contingencies impacting the financial statements. (2021: Nil)
(iii) Significant capital expenditure contracted for at the end of the reporting period but not recognised as
liabilities in relation to the theatre expansion at Gulf City is $854,207 (2021: $1,754,207).
(iv) The Property Tax Act of 2009 (PTA) was enacted into law by the Government of the Republic of
Trinidad and Tobago (GORTT), effective from 1 January 2010. There were challenges with its
implementation and GORTT implemented waivers of the tax, the last of which expired on 30
September 2017. As of present date there have been no further changes to the legislation or
extension of the waivers previously granted by the GORTT. The PTA has not yet been enforced
primarily due to non-completion of property valuations by the statutory authority and assessments
not being sent to taxpayers. While a present obligation exists, taxpayers are unable to reliably
estimate the liability as the basis for fair value at this time has not been clarified.
23 Dividends
There were no dividends declared or paid by the Board of Directors of the Company during the financial
year (2021: Nil).
24 Impact of Covid-19
On 11 March 2020, due to the worsening global public health crisis associated with the novel coronavirus
known as Covid-19, the World Health Organization officially classified Covid-19 as a global pandemic.
Stay-at-home orders and restrictions on large public gatherings were subsequently implemented in
countries around the world and included the closure of movie theatres. As a result of the theatre closures,
movie studios postponed theatrical releases of most films originally scheduled for release in 2020 and
early 2021, while several other films were released directly or concurrently to streaming platforms. The
outbreak and continuation of the Covid-19 pandemic throughout all of financial year 2021 and over half of
financial year 2022 triggered unprecedented challenges in the international economy and adversely
impacted the global movie exhibition industry.
In Trinidad and Tobago, the Prime Minister announced the first mandatory shutdown of cinemas and other
sectors on 17 March 2020. The initial mandated closure extended for 107 days until 2 July 2020. In
response to a second Covid-19 pandemic wave in Trinidad and Tobago, the Prime Minister again
announced the closure of cinemas on 17 August 2020 to 8 November 2020. The second mandated
closure had a duration of 84 days.
On 29 April 2021, just over a year after the initial Covid-19 outbreak, Trinidad and Tobago’s Prime Minister
mandated a third lockdown and full closure of cinemas. Given the more acute stage of Covid-19 infection
rates at that time, Trinidad and Tobago escalated its Covid-19 response to a full State of Emergency
(SOE) on 15 May 2021. As a result, the cinema sector was closed in the interest of public safety for the
remaining balance of the financial year 2021 period. Overall, the Company was fully operational for only
135 days in financial year 2021, albeit with significant operational restrictions such as a 50% capacity
limitation and 10 PM closure period.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(38)
24 Impact of Covid-19 (continued)
The Trinidad and Tobago government’s closure mandate extended until October 11, 2021 when cinemas
were permitted to re-open under safe zone protocols which restricted patronage and employment to fully
vaccinated customers and employees only and limited capacity to 50% percent. In addition, the state of
emergency which curtailed opening hours to 10pm was only lifted on November 17, 2021. Subsequently
on March 7, 2022, the gradual relaxation of operational hindrances continued with the increase of
maximum theatre occupancy to 75%. Finally on April 4, 2022, all government imposed Covid-19
restrictions were relaxed and movie theatres in Trinidad and Tobago were permitted to operate under
normal conditions.
The continued imposition of the above Covid-19 restrictions on cinema operations in financial year 2022
in an effort to contain the pandemic in the interest of public health and safety triggered the reduced, but
still present, risk of excessive cash burn during the first half of FY 2022. To mitigate such risks,
CinemaONE similarly maintained many of the liquidity preservation measures it had adopted since the
onset of the Covid-19 pandemic in FY 2020. Such measures, which were implemented by Management
and sanctioned by the Company’s Board, included but were not limited to:
- Continued phased capital expenditures on the Company’s new Gulf City expansion site, meaning
only screens 1 and 2 would be deployed in the first phase and all construction works related to
screens 3-5 delayed
- Maintenance of 25-40% reduction off pre-Covid19 compensation levels for both senior and middle
management staff
- Limitation of OWP capital expenditures to critical maintenance related expenditures only
- Consistent negotiation for rent and other relief from key vendor partners such as the Company’s
landlord, HCL, and IMAX
- Sustained effort to secure any Covid-19 government relief such as 0% interest SME Loan, and other
similar shareholder advances to assist in bolstering liquidity as a substitute
Out of an abundance of caution and in addition to other debt payment and debt covenant waivers already
received, CinemaONE worked closely with its senior lender, Guardian Group Trust Limited (GGTL) to
additionally request and receive the following:
1. Waiver on Tranche B interest payments, extending through Q1 of Fiscal 2022 to the end of January
2022, which was approved by GGTL.
2. Tranche A Bond payment delayed until 16 January 2023.
With the waning of the deleterious operational impact of the Covid-19 pandemic in FY 2022 and the
release of numerous blockbuster movie titles from all major studios during the period, CinemaONE
enjoyed a significant FY 2022 rebound of key financial performance indicators such as Revenue and
EBITDA. As such Management’s outlook further improved in FY 2022 and CinemaONE has maintained
the going concern assumption in the preparation of the Company’s 2022 financial statements. This basis
of preparation presumes that the Company will realise its assets and discharge its liabilities in the
ordinary course of business for the foreseeable future.
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(39)
24 Impact of Covid-19 (continued)
Impairment review
During FY 2022 the Government of Trinidad and Tobago relaxed all of the imposed Covid-19
operating constraints which had materially hampered business operations in the interest of public
health and safety. In addition, the major movie studies opted to release numerous blockbuster titles,
many of which also enjoyed exclusive periods in movie theatres only, prior to being released to
streaming platforms.
As a result of such positive developments, CinemaONE’s revenue rebounded by almost four
hundred percent. Key indicators such as EBITDA also returned to positive levels and were in line
with historical margins. This is to say that CinemaONE’s market capitalisation of $38.3M as of
September 30, 2022, exceeded the Company’s net asset value by approximately $17M. Indeed,
the Company’s share price appreciated by 49.5% during the year to close at $5.98 on September
30, 2022.
CinemaONE considered the applicability of its impairment testing at the height of the Covid-19
pandemic in FY 2021 and Management determined that using an expected cash flow approach to
its impairment testing is still the most effective means of reflecting the potential uncertainties of the
Covid-19 pandemic in its estimates of recoverable amount. This approach reflects expectations
derived from various sensitivities or possible cash flows scenarios.
Consistent with IAS 36, Management elected to analyse the aggregate whole company as a singular or
whole CGU for its impairment testing. To determine the Value in Use of the whole company, the
Company performed detailed Discounted Cash Flow Analyses (DCF). Key assumptions for the
Company’s Conservative Case scenario are outlined below:
Revenue and Income Statement Projections
The Company’s revenue projections are derived from the two major elements of the business, namely
ticket sales or movie admissions and food and beverage revenue, both of which are generated by overall
attendance and the associated and historically consistent per patron sales. The Company’s Conservative
Case attendance projections are based on a relatively slow “return to normalcy” as the impact of Covid-19
wanes over a period of years versus months.
• Year 1 - 2023: attendance at the Company’s One Woodbrook Place (OWP) location recovers to a
24% variance below the historical pre-Covid19 average and the opening of the Company’s Gulf City
Mall location is delayed until December 2022.
• Year 2 – 2024: attendance at the Company’s One Woodbrook Place (OWP) location further recovers
to a -9% variance below the historical pre-Covid19 average and Gulf City operates for a full year but
achieves only 20% greater attendance over Fiscal 2023.
• Year 3 – 2025 OWP achieves a full rebound by reaching its pre-Covid-19 3 Year historical average
attendance while Gulf City’s total outfitting is completed, and the Year opens with the entire 5 screen
facility.
• Years 4 and 5 – OWP’s attendance conservatively only surpasses its peak 2019 performance of
134K in Year 5 by a marginal 1%
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(40)
24 Impact of Covid-19 (continued)
Revenue and Income Statement Projections (continued)
In addition to the above conservative assumptions, the Company has maintained consistency in both its
per patron spend patterns by theatre format and in the Company’s overall EBITDA and profitability
margins throughout the 5 Year DCF. Also, a case could be made for a 10 Year time horizon given the
Company’s long-term leases and long-term debt financing. A 10 Year DCF would be accretive.
Summary of Key Financial Assumptions
Weighted Average Cost of Capital (WACC)
Terminal value
To establish the maintainable after-tax free cash flow level of the Company during the years subsequent to
the 5 Year forecast period, referred to as the “Terminal Value”, particularly given the Company’s long term
(20 year) lease agreements and long term (15 year) loan agreements, the Company has considered the
historical financials and future cash flows. More specifically, to estimate the maintainable free cash flow
for the Terminal Value of the Company, the Company has assumed EBITDA will grow by 1.5% (3.4% in
EBITDA growth was delivered from inception in 2012 through 2019).
Impairment analysis conclusion
The result of Management’s DCF financial analysis using the assumptions outlined above along with the
additional financial sensitivities performed yields a DCF Equity Value or Value in Use range which exceeds
both the Carrying Value of the Company’s assets and the Company’s Current Market Value Capitalisation.
With respect to the sensitivity of the impairment assessment, the average spend per patron would have to
fall by more than 40% from $140 per patron to $85 per patron for there to be an impairment, the total
attendance would need to remain suppressed at more than 25% below pre-Covid 19 averages for there to
be an impairment, or the pre-tax WACC would need to rise to 16% for there to be an impairment
On this basis, the Company has not impaired its assets as of 30 September 2022.
Low High
PreTax Cost of Debt (Adjusted for the
Actual TTD and US Rates)
8.21% 8.21%
SME Tax Rate (GORTT Revised in 2022) 15.00% 15.00%
After Tax Cost of Debt 6.97% 6.97%
Debt Ratio
73.20% 64.70%
WACC Debt Contribution 5.11% 4.51%
After-tax cost of Equity 20.12% 22.62%
Equity Ratio 26.80% 35.30%
WACC Equity Contribution 5.4% 8.0%
Total WACC 10.50% 12.50%
CinemaONE Limited
Notes to the Financial Statements (continued)
30 September 2022
(Expressed in Trinidad and Tobago dollars)
(41)
25 Subsequent events
On 3 November 2022, The Trinidad and Tobago Securities and Exchange Commission approved
CinemaONE’s Information Memorandum which detailed the Company’s plan to raise a minimum of
TT$6 million in equity capital via a Rights Issue of 1.6M ordinary shares offered to existing
shareholders only. The Rights Issue is expected to successfully close in January 2023.
On 30 November 2022, CinemaONE was granted its license to open its new Gemstone formatted
theatre facility in Gulf City Mall, San Fernando. The new theatre opened to the public on 3 December
2022.
26 Russia/Ukraine war
The geopolitical situation in Eastern Europe has intensified following the February 2022 descent of
Russia and Ukraine into an armed conflict. The Company does not have activity in Ukraine nor
Russia, nor have relationships with Russian or Ukrainian groups. However, over time, the conflict is
likely to have direct and indirect economic and financial consequences, notably in the supply chain
from rising prices and/or shortage of certain materials, goods and services and delays and increased
costs in logistics. Furthermore, the conflict may disrupt the overall global economy and growth.
Management and the Directors are closely monitoring the Company’s exposure, including the
uncertainties and risks associated with the crisis, but at this point it is too early to assess any impacts.
Therefore, at the date of these financial statements, there is no identified financial impact related to
this conflict on the Company’s Statement of Financial Position.
There are no other events, situations or circumstances which have occurred which might significantly
affect the Company’s equity or financial position, which have not been adequately contemplated or
mentioned in these financial statements or circumstances have occurred which might significantly
affect the Company’s equity or financial position, which have not been adequately contemplated or
mentioned in these financial statements.
CinemaONE Limited
One Woodbrook Place,
189 Tragarete Road,
Port of Spain
(T): 389-6925
(E): [email protected]
(W): www.cinemaonett.com
designed by reiddesigns.pro
