Company Registration No. 02001847 (England and Wales)
WASHINGTON GREEN FINE ART GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
WASHINGTON GREEN FINE ART GROUP LIMITED
COMPANY INFORMATION
Directors
P J S Green
R Green
G Washington
E Sheleg
I Weatherby-Blythe
Company number
02001847
Registered office
Unit 15 Spitfire Road
Erdington
Birmingham
B24 9PR
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
WASHINGTON GREEN FINE ART GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 20
WASHINGTON GREEN FINE ART GROUP LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the period ended 31 December 2022.
Fair review of the business
With increased customer demand post COVID-19, the company has generated a healthy increase in its turnover, resulting in an improved profit on a pro-rata basis to the previous period.
Principal risks and uncertainties
The principal risk and uncertainty facing the company relates to the volatility of high street retail. On a general level, inflationary and other macroeconomic factors can impact on consumer demand. The company manages these risks by creating and offering unique and desirable products, through higher levels of information and marketing tools to enable the company to retain and attract customers.
Development and performance
The company made a pre-tax profit of £1,555,040 (2021: £1,375,905) for the period on a turnover of £21,593,493 (2021: £18,117,321).
At 31 December 2022 the company had net assets of £4,820,180 (2021: £3,529,632).
Key performance indicators
In the opinion of the directors the Key Performance Indicators are the level of turnover generated and margin achieved.
Promoting the success of the company
Section 414CZA(1) of the Companies Act 2006 requires the directors to explain how they considered the matters set out in section 172(1) (a) to (f) of the Companies Act 2006 (‘S172 (1)’) when performing their duty to promote the success of the company. When making decisions, each director ensures that they act in the way that would most likely promote the company’s success for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to the following matters:
(a) The likely consequences of any decision in the long term
The directors understand the business and the evolving environment in which the company operates. There were no changes to the strategic direction of the company in the period. The directors monitor changes in regulatory requirements to ensure the company remains compliant.
(b) The interests of the company’s employees
The directors recognise that the success of the business depends on attracting, retaining and motivating high quality employees. The directors take into account the implications of decisions which may affect their perception as a responsible employer, on determining remuneration and benefits, and on providing a healthy and safe workplace environment, where relevant.
(c) The need to foster the company's business relationships with suppliers, customers and others
The directors seek to promote strong mutually beneficial relationships with suppliers, customers and authorities. Such general principles are critical in the delivery of the company’s strategy.
(d) The impact of the company’s operations on the community and the environment
The company is committed to understanding the interests of these stakeholder groups as is relevant to the company. The directors receive information on these topics on a periodic basis to provide relevant information for specific board decisions. The company seeks to work with suppliers of services who are certified to industry recognised standards.
(e) The desirability of the company maintaining a reputation for high standards of business conduct
The directors recognise the importance of acting in ways which promote high standards of business conduct. The board periodically reviews and approves clear operating frameworks to ensure that its high standards are maintained both within the businesses and the business relationships the company has with stakeholders.
(f) The need to act fairly as between members of the company
The directors aim to act fairly as between the company’s members when delivering the company’s strategy.
WASHINGTON GREEN FINE ART GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 2 -
P J S Green
Director
27 September 2023
WASHINGTON GREEN FINE ART GROUP LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 3 -
The directors present their report and accounts for the period ended 31 December 2022.
Principal activities
The principal activity of the company continues to be the publication and marketing of original fine art prints.
Results and dividends
The results for the period are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
P J S Green
R Green
G Washington
E Sheleg
I Weatherby-Blythe
Business relationships
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information in respect of engagement with suppliers, customers and others in a business relationship with the company as required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Auditor
The auditor, HW Fisher LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
The company has taken the exemption not to report on their greenhouse gas emissions, on the basis they are a subsidiary undertaking, and their results are incorporated within the group accounts of Halcyon Fine Art Group Holdings Limited.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Financial Risk Managament
The company manages its cash flow on a daily basis.
On behalf of the board
P J S Green
Director
27 September 2023
WASHINGTON GREEN FINE ART GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
WASHINGTON GREEN FINE ART GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WASHINGTON GREEN FINE ART GROUP LIMITED
- 5 -
Opinion
We have audited the financial statements of Washington Green Fine Art Group Limited (the 'company') for the period ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
WASHINGTON GREEN FINE ART GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF WASHINGTON GREEN FINE ART GROUP LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
As part of our planning process:
We enquired of management the systems and controls the company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102 and Companies Act 2006.
We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular any that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, specifically regarding stock provisions.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
Testing key revenue lines, in particular cut-off, for any evidence of management bias.
Performing a physical verification of key assets and stock items (including testing of the stock system).
Obtaining third-party confirmation of material bank balances.
Documenting and verifying all significant related party transactions.
WASHINGTON GREEN FINE ART GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF WASHINGTON GREEN FINE ART GROUP LIMITED
- 7 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member for our audit work, for this report, or for the opinions we have formed.
Simon Mott-Cowan (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
28 September 2023
WASHINGTON GREEN FINE ART GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 8 -
Period
Period
ended
ended
31 December
31 October
2022
2021
Notes
£
£
Turnover
3
21,593,493
18,117,321
Cost of sales
(16,007,983)
(13,485,228)
Gross profit
5,585,510
4,632,093
Distribution costs
(771,937)
(344,255)
Administrative expenses
(3,248,076)
(3,480,438)
Other operating income
555,260
Operating profit
4
1,565,497
1,362,660
Interest receivable and similar income
957
19,231
Interest payable and similar expenses
(11,414)
(5,986)
Profit before taxation
1,555,040
1,375,905
Tax on profit
7
(264,492)
(280,442)
Profit for the financial period
1,290,548
1,095,463
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WASHINGTON GREEN FINE ART GROUP LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 9 -
31 December
31 October
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
104,674
83,274
Investments
10
5,000,003
5,000,003
5,104,677
5,083,277
Current assets
Stocks
12
7,745,114
8,966,046
Debtors
13
7,280,102
6,430,043
Cash at bank and in hand
1,136,399
124,896
16,161,615
15,520,985
Creditors: amounts falling due within one year
14
(15,155,958)
(16,791,924)
Net current assets/(liabilities)
1,005,657
(1,270,939)
Total assets less current liabilities
6,110,334
3,812,338
Accruals
15
(1,290,154)
(282,706)
Net assets
4,820,180
3,529,632
Capital and reserves
Called up share capital
17
1,000,000
1,000,000
Profit and loss reserves
3,820,180
2,529,632
Total equity
4,820,180
3,529,632
The financial statements were approved by the board of directors and authorised for issue on 27 September 2023 and are signed on its behalf by:
P J S Green
Director
Company Registration No. 02001847
WASHINGTON GREEN FINE ART GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 May 2020
7,500,100
(65,931)
7,434,169
Period ended 31 October 2021:
Profit and total comprehensive income for the period
-
1,095,463
1,095,463
Dividends
8
-
(5,000,000)
(5,000,000)
Reduction of share capital
17
(6,500,100)
6,500,100
Balance at 31 October 2021
1,000,000
2,529,632
3,529,632
Period ended 31 December 2022:
Profit and total comprehensive income for the period
-
1,290,548
1,290,548
Balance at 31 December 2022
1,000,000
3,820,180
4,820,180
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 11 -
1
Accounting policies
Company information
Washington Green Fine Art Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 15 Spitfire Road, Erdington, Birmingham, B24 9PR.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
The financial statements of the company are consolidated in the financial statements of Halcyon Fine Art Group Holdings Limited. These consolidated financial statements are available from its registered office, 5th Floor, 143 New Bond Street, London, W1S 2TP.
1.2
Reporting period length
The current period figures relate to 1 November 2021 to 31 December 2022. The comparative figures are for the period 1 May 2020 to 31 October 2021. Therefore the comparative amounts presented in the financial statements (including the related notes) are not entirely comparable. The reason for using a fourteen-month period is to align the period end date (31 December) with the parent company and other group companies.
1.3
Going concern
The company achieved a healthy level of turnover and profitability during the period under review. Subsequent to the period the company has continued to trade profitably and therefore the directors are confident of the company's ability to continue as a going concern for the foreseeable future. Therefore the directors continue to adopt the going concern basis of accounting in preparing the financial statements.true
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for artwork sold in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of artwork is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.5
Tangible fixed assets
Tangible fixed assets are measured at cost, net of depreciation and any impairment losses.
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Fixtures, fittings & equipment
10-25% of cost or net book value per annum
Motor vehicles
33% reducing balance
Assets in the course of construction are not depreciated until they are ready for use.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Fixed asset investments
Interests in subsidiaries are measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises printing costs for limited edition prints, and the initial agreed purchase price for original artwork, together with mounting and framing costs, where appropriate.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method. Financial assets classified as receivable within one year are not amortised.
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, and amounts due from fellow group companies, are initially recognised at transaction. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
The company operates a defined contributions pension scheme. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme.
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Government grants, which include the amounts received under the Coronavirus Job Retention Scheme, are recognised at the fair value of the grant received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. The income is recognised in other income on a systematic basis over the periods in which the associated costs are incurred, using the accrual method.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements, involving estimates, have had the most significant effect on amounts recognised in the financial statements.
Stock impairment and provision
Stocks are valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving stocks. Calculation of these provisions require judgements to be made, which include forecasting consumer demand, competitive and economic environment and stock loss trends. During the period, net impairment losses of £2,312,867 (2021: £233,280) were reflected in the profit and loss account.
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 15 -
3
Turnover and other revenue
2022
2021
£
£
Sale of prints and artwork
21,593,493
18,117,321
2022
2021
£
£
United Kingdom
20,972,099
17,115,714
EU
621,376
844,095
USA
18
6,499
Rest of World
-
151,013
21,593,493
18,117,321
4
Operating profit
2022
2021
Operating profit for the period is stated after charging/(crediting):
£
£
Exchange differences
(36,822)
(333,081)
Government grants
(319,236)
Fees payable to the company's auditor for the audit of the company's financial statements
37,500
87,280
Depreciation of owned tangible fixed assets
30,009
102,520
Operating lease charges
253,833
260,734
5
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2022
2021
Number
Number
Sales
11
7
Management, marketing & administration
23
24
Production
42
37
Total
76
68
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
5
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
1,856,340
2,298,336
Social security costs
365,319
282,899
Pension costs
61,470
69,605
2,283,129
2,650,840
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
403,812
183,054
Company pension contributions to defined contribution schemes
5,833
10,832
409,645
193,886
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
403,812
121,051
Company pension contributions to defined contribution schemes
5,833
7,500
7
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
308,363
272,249
Adjustments in respect of prior periods
(43,871)
Total current tax
264,492
272,249
Deferred tax
Origination and reversal of timing differences
8,193
Total tax charge
264,492
280,442
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
(Continued)
- 17 -
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
1,555,040
1,375,905
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
295,458
261,422
Tax effect of expenses that are not deductible in determining taxable profit
2,116
1,081
Adjustments in respect of prior years
(43,871)
Other adjustments
10,789
17,361
Depreciation on assets not qualifying for tax allowances
578
Taxation charge for the period
264,492
280,442
8
Dividends
2022
2021
£
£
Interim paid
5,000,000
9
Tangible fixed assets
Assets under construction
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 November 2021
520,822
64,890
585,712
Additions
41,366
20,793
62,159
Disposals
(71,385)
(71,385)
At 31 December 2022
41,366
470,230
64,890
576,486
Depreciation and impairment
At 1 November 2021
444,644
57,794
502,438
Depreciation charged in the period
27,277
2,732
30,009
Eliminated in respect of disposals
(60,635)
(60,635)
At 31 December 2022
411,286
60,526
471,812
Carrying amount
At 31 December 2022
41,366
58,944
4,364
104,674
At 31 October 2021
76,178
7,096
83,274
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 18 -
10
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
11
5,000,003
5,000,003
Movements in fixed asset investments
Shares in group undertakings
£
Cost
At 1 November 2021 & 31 December 2022
5,000,003
Carrying amount
At 31 December 2022
5,000,003
At 31 October 2021
5,000,003
11
Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office key
shares held
Direct
Indirect
Artica Galleries Limited
1
Dormant
Ordinary
0
100.00
Castle Galleries Retail Limited
1
Dormant
Ordinary
100.00
0
Spitfire Fine Art Limited
1
Dormant
Ordinary
100.00
0
Washington Green Retail Limited
1
Art Retailer
Ordinary
100.00
0
Registered Office addresses:
1
Unit 15 Spitfire Road, Erdington, Birmingham, West Midlands, England, B24 9PR
12
Stocks
2022
2021
£
£
Artwork for sale
7,745,114
8,966,046
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 19 -
13
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
3,207,615
2,140,318
Tax debtor
321,221
110,321
Amount due from group undertakings
3,600,962
4,044,531
Prepayments and accrued income
150,304
134,873
7,280,102
6,430,043
14
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
2,142,408
2,295,077
Amounts owed to group undertakings
12,598,179
14,163,963
Corporation tax
293,622
257,546
Other taxation and social security
81,372
62,595
Other creditors
40,377
12,743
15,155,958
16,791,924
15
Accruals
2022
2021
£
£
Accruals
1,290,154
282,706
16
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
61,470
69,605
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000,000
1,000,000
1,000,000
1,000,000
WASHINGTON GREEN FINE ART GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 20 -
18
Financial commitments, guarantees and contingent liabilities
The company entered into a cross guarantee bank facility and loan with its ultimate parent and fellow subsidiary companies. The bank has fixed and floating charges over both the assets of the company and those group members included within the agreement. The contingent liability in this respect amounted to £20,935,265 (2021: £12,013,415) as at 31 December 2022.
As at 31 December 2022, the company acts as a guarantor to operating lease commitments for galleries of fellow subsidiary company, for future minimum lease payments of £592,166 (2021: £760,167).
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
221,628
316,394
Between two and five years
426,155
697,956
647,783
1,014,350
20
Related party transactions
At 31 December 2022, the company was owed £2,550,572 (2021: £1,975,402) by a connected company related through ownership. During the period purchases of £4,074,248 (2021: £609,016) and other movements with a net debit of £4,649,418 (2021: £9,524,978) were processed with this related company.
21
Ultimate controlling party
The company's immediate parent company is Halcyon Gallery (Holdings) Limited and the ultimate parent company is Halcyon Fine Art Group Holdings Limited. Both companies are incorporated in the United Kingdom.
Halcyon Fine Art Group Holdings Limited is the parent undertaking of the largest and smallest group that prepares group accounts and of which the company is a member. The registered office address of Halcyon Fine Art Group Holdings Limited is 5th Floor, 143 New Bond Street, London, W1S 2TP. The group accounts are publicly available from the registered office address.
2022-12-312021-11-01falseCCH SoftwareCCH Accounts Production 2023.100P J S GreenR GreenG WashingtonE ShelegI Weatherby-Blythe020018472021-11-012022-12-3102001847bus:Director12021-11-012022-12-3102001847bus:Director22021-11-012022-12-3102001847bus:Director32021-11-012022-12-3102001847bus:Director42021-11-012022-12-3102001847bus:Director52021-11-012022-12-3102001847bus:RegisteredOffice2021-11-012022-12-31020018472022-12-31020018472020-05-012021-10-31020018472021-10-3102001847core:ConstructionInProgressAssetsUnderConstruction2022-12-3102001847core:FurnitureFittings2022-12-3102001847core:MotorVehicles2022-12-3102001847core:ConstructionInProgressAssetsUnderConstruction2021-10-3102001847core:FurnitureFittings2021-10-3102001847core:MotorVehicles2021-10-3102001847core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3102001847core:CurrentFinancialInstruments2022-12-3102001847core:CurrentFinancialInstruments2021-10-3102001847core:ShareCapital2022-12-3102001847core:ShareCapital2021-10-3102001847core:RetainedEarningsAccumulatedLosses2022-12-3102001847core:RetainedEarningsAccumulatedLosses2021-10-3102001847core:ShareCapitalcore:RestatedAmount2020-04-3002001847core:RetainedEarningsAccumulatedLossescore:RestatedAmount2020-04-3002001847core:RestatedAmount2020-04-3002001847core:RetainedEarningsAccumulatedLosses2020-05-012021-10-3102001847core:ShareCapital2020-05-012021-10-3102001847core:FurnitureFittings2021-11-012022-12-3102001847core:MotorVehicles2021-11-012022-12-3102001847core:UKTax2021-11-012022-12-3102001847core:UKTax2020-05-012021-10-310200184712021-11-012022-12-310200184712020-05-012021-10-3102001847core:ConstructionInProgressAssetsUnderConstruction2021-10-3102001847core:FurnitureFittings2021-10-3102001847core:MotorVehicles2021-10-31020018472021-10-3102001847core:ConstructionInProgressAssetsUnderConstruction2021-11-012022-12-3102001847core:Non-currentFinancialInstruments2022-12-3102001847core:Non-currentFinancialInstruments2021-10-3102001847core:Subsidiary12021-11-012022-12-3102001847core:Subsidiary22021-11-012022-12-3102001847core:Subsidiary32021-11-012022-12-3102001847core:Subsidiary42021-11-012022-12-3102001847core:Subsidiary112021-11-012022-12-3102001847core:Subsidiary222021-11-012022-12-3102001847core:Subsidiary332021-11-012022-12-3102001847core:Subsidiary442021-11-012022-12-3102001847core:WithinOneYear2022-12-3102001847core:WithinOneYear2021-10-3102001847core:BetweenTwoFiveYears2022-12-3102001847core:BetweenTwoFiveYears2021-10-3102001847bus:PrivateLimitedCompanyLtd2021-11-012022-12-3102001847bus:FRS1022021-11-012022-12-3102001847bus:Audited2021-11-012022-12-3102001847bus:FullAccounts2021-11-012022-12-31xbrli:purexbrli:sharesiso4217:GBP