Company Registration No. 03324579 (England and Wales)
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
COMPANY INFORMATION
Directors
Viscountess Bridgeman CBE
Viscount Bridgeman
Company number
03324579
Registered office and business address
17-19 Garway Road
London
W2 4PH
Auditor
Goodman Jones LLP
29-30 Fitzroy Square
London
W1T 6LQ
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 21
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report for the year ended 31 December 2019.
Review of the Business
The company is the New-York based subsidiary of The Bridgeman Images Group, which is the world's leading specialist in the distribution of fine art, cultural and historical media for reproduction. Working with museums, galleries, collections and artists to provide a central resource of fine art and archive footage for reproduction to creative professionals. Every subject, concept, style and medium is represented, from the masterpieces of national museums to the hidden treasures of private collections. With offices in London, New York, Paris and Berlin, as well as numerous agents world-wide, it offers a truly global service that is second-to-none for professionals and novices alike.
The year ended 31 December 2019 was a successful period for the company with a strong appetite for the company's images. The company has benefited from the expansion of available images through the parent company and in part as a result of recent acquisitions of image collections.
Development and performance
The key financial performance indicators are considered to be those that communicate the financial performance and strength of the group as a whole, these being turnover, net profitability and cash balances.
Turnover for the year was £2.55m.
The operating profit for the year was £238k.
The cash balance of £83k reflects a healthy balance sheet with liquid resources sufficient to meet the working capital requirements of the company.
Principal risks and uncertainties
The financial risk management objectives and policies of the company are focussed on effectively managing foreign exchange risk and credit risk as follows:
The company’s principal foreign currency exposures arise from trading overseas, particularly through costs of images. Trading performance is affected by exchange rate movements, the risk of which is not actively managed, other than by selling currency at opportune rates where appropriate as well as ensuring sufficient foreign currency is held to meet future outgoings.
Credit facilities are provided to customers who meet the required criteria. Risk of default is minimized by a robust credit control function and the use of professional debt-collection services where appropriate.
In light of recent events, there have been changes in the macroeconomic conditions as a result of the threat and uncertainty posed by the Coronavirus outbreak. The outbreak has resulted in potential risks to the business which are outlined below together with how these risks have been mitigated.
The ability to work on a remote basis posed a potential risk to the business, however a robust control environment with good IT processes and controls in place has enabled this to happen with limited impact on the business.
The closure of production, publishing and arts industries posed a potential risk to revenue, and sales were badly affected. However, the business has now experienced an acceleration in activity migrating from offline to online which has directly benefitted the company's performance.
Post reporting date events
Since the balance sheet date, the Covid-19 coronavirus has been declared a global pandemic by the World Health Organisation. The company’s response to this situation has been outlined in more depth above in the strategic report. The impact of Covid-19 is a non- adjusting post balance sheet event and has not required any adjustment to the 2019 accounts. It should be noted that there may be an impact in the future in respect of the judgment and estimates made as at the balance sheet date of 31 December
2019.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
Strategic relationships
We believe our employees are the most valuable asset of the group of which their dedication, professionalism and drive have contributed to the continued success of the group. A discretionary bonus scheme has long been established to enable staff to share business success to which a share option scheme has been added after the year end at group level to incentivise and reward key personnel.
The group is committed to prompt payment to its suppliers and maintains at all times adequate cash reserves to cover its supplier balances. In the event of a dispute, the group informs the supplier without delay and seeks to settle the dispute quickly and efficiently.
The group believes the way in which it behaves and interacts with its stakeholders is essential to the business' success and development. To this end corporate and social responsibility issues are reviewed ensuring that sufficient focus and resource is given to implementing and monitoring these issues.
Viscountess Bridgeman CBE
Director
18 December 2020
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2019.
Principal activities
The principal activity of the company during the year was that of the licensing of digital images. The company operates solely from a branch in New York.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Viscountess Bridgeman CBE
Viscount Bridgeman
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £600,000. The directors do not recommend payment of a further dividend.
Employee involvement
The company's policy is to consult and discuss with employees at meetings, matters likely to affect employees' interests.
Information of matters of concern to employees is given through updates which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
Future developments
The directors anticipate continued growth in the coming year and will continue to look at all market opportunities.
Auditor
The auditor, Goodman Jones LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
Post reporting date events
Since the balance sheet date, the Covid-19 coronavirus has been declared a global pandemic by the World Health Organisation. The company’s response to this situation has been outlined in more depth above in the strategic report. The impact of Covid-19 is a non-adjusting post balance sheet event and has not required any adjustment to the 2019 accounts. It should be noted that there may be an impact in the future in respect of the judgment and estimates made as at the balance sheet date of 31 December 2019.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 4 -
Going Concern
The directors have therefore considered the forecast position of both the company and the wider group in reaching their conclusions in respect of going concern.
At the balance sheet date, the company is in a net asset position. The enlarged group has net current assets and significant net assets.
At the date of this report, the enlarged group is funded by £1.3m long-term bank debt with repayment due in 2023. In considering the forecast trading performance of the company and the enlarged group, the directors have considered the impact of the coronavirus pandemic. The assessment made recognises the inherent uncertainty associated with any forecasting at the present time.
As outlined in the Strategic Report, the Group has largely recovered from the immediate impact of the Coronavirus pandemic. This is largely due to the acceleration in activity migrating from offline to online. The Group has also benefited from being more geographically diverse, due to its recent acquisitions and expansion overseas, and its portals have benefited from the current macroeconomic environment. Due to recent performance the directors believe that trading performance will remain robust and do not expect any adverse scenarios where the operations of the Group continue to be adversely affected by Covid.
In assessing the appropriateness of the going concern assumption, the directors have considered the ability of the group to meet the bank debt covenants and maintain adequate liquidity through the forecast period. The group’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the group is able to operate comfortably within the level of its current facilities and meet its debt covenant obligations. Sensitivities have been modelled to understand the impact of the various risks outlined above.
After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and that it remains appropriate to continue to adopt the going concern basis in preparing the annual report and financial statements.
On behalf of the board
Viscountess Bridgeman CBE
Director
18 December 2020
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 5 -
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;
-
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.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
- 6 -
Opinion
We have audited the financial statements of The Bridgeman Art Library International Limited (the 'company') for the year ended 31 December 2019 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
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 2019 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year 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.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
- 7 -
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://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.
Sarf Malik (Senior Statutory Auditor)
for and on behalf of Goodman Jones LLP
18 December 2020
Chartered Accountants
Statutory Auditor
29-30 Fitzroy Square
London
W1T 6LQ
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
- 8 -
Seven month period
Year ended
ended
31 December
31 December
2019
2018
Notes
£
£
Revenue
3
2,547,976
1,430,610
Cost of sales
(1,210,559)
(672,474)
Gross profit
1,337,417
758,136
Administrative expenses
(1,099,088)
(646,840)
Operating profit
4
238,329
111,296
Investment income
7
76
1
Profit before taxation
238,405
111,297
Tax on profit
8
(69,308)
(34,211)
Profit for the financial year
169,097
77,086
The Income Statement has been prepared on the basis that all operations are continuing operations.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2019
31 December 2019
- 9 -
2019
2018
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
10
4,100
3,481
Current assets
Trade and other receivables
11
243,338
505,518
Cash and cash equivalents
83,090
256,657
326,428
762,175
Current liabilities
12
(111,150)
(115,375)
Net current assets
215,278
646,800
Total assets less current liabilities
219,378
650,281
Equity
Called up share capital
14
128,364
128,364
Retained earnings
91,014
521,917
Total equity
219,378
650,281
The financial statements were approved by the board of directors and authorised for issue on 18 December 2020 and are signed on its behalf by:
Viscountess Bridgeman CBE
Director
Company Registration No. 03324579
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 10 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 June 2018
128,364
444,831
573,195
Year ended 31 December 2018:
Profit and total comprehensive income for the period
-
77,086
77,086
Balance at 31 December 2018
128,364
521,917
650,281
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
169,097
169,097
Dividends
9
-
(600,000)
(600,000)
Balance at 31 December 2019
128,364
91,014
219,378
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 11 -
1
Accounting policies
Company information
The Bridgeman Art Library International Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
17-19 Garway Road, London, W2 4PH.
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 a
mounts
in these financial statements are
rounded to the nearest
pound.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 12 -
1.2
Going concern
The company's business activities, together with the factors likely to affect its future development, performance and position are set out in the strategic report. The strategic report further describes the financial position of the group; the group’s objectives and policies; its financial risk management objectives; details of its financial instruments; and its exposure to credit risk and liquidity risk.
true
The company operated at a profit for the year of £169,097 (2018: £177,086). At the year-end net current assets amounted to £215,278 (2018: £646,800) and net assets amounted to £219,378 (2018: £650,281).
The directors have therefore considered the forecast position of both the company and the wider group in reaching their conclusion in respect of going concern.
At the date of this report, the group is funded by £1.3m long-term bank debt with repayment due in 2023. In considering the forecast trading performance of the company and the enlarged group, the directors have considered the impact of the coronavirus pandemic. The assessment made recognises the inherent uncertainty associated with any forecasting at the present time.
As outlined in the Strategic Report, the Group has largely recovered from the immediate impact of the Coronavirus pandemic. This is largely due to the acceleration in activity migrating from offline to online. The Group has also benefited from being more geographically diverse, due to its recent acquisitions and expansion overseas, and its portals have benefited from the current macroeconomic environment. Due to recent performance the directors believe that trading performance will remain robust and do not expect any adverse scenarios where the operations of the Group continue to be adversely affected by Covid.
Whilst the Group took advantage of government schemes to defer VAT and PAYE/ NI due, as well as the Coronavirus Job Retention Scheme, and other, similar government schemes in the various countries in which the business operates, further funding is required and the Group has successfully completed an application for a Coronavirus Business Interruption Loan of £260,000. The government has also announced plans to extend repayment dates of tax deferrals over a further year from March 2021. The Group currently has sufficient liquidity to enable all operations of the business to continue. The Directors have considered this and do not expect there to be an adverse impact to the company and its operations.
In assessing the appropriateness of the going concern assumption, the directors have considered the ability of the group to meet the bank debt covenants and maintain adequate liquidity through the forecast period. The group’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the group is able to operate comfortably within the level of its current and new facilities and meet its debt covenant obligations. Sensitivities have been modelled to understand the impact of the various risks outlined above.
After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and that it remains appropriate to continue to adopt the going concern basis in preparing the annual report and financial statements.
1.3
Revenue
Revenue from the licensing of digital images is recognised when usage is declared.
Revenue from the sale of goods 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.
1.4
Property, plant and equipment
Property, plant and equipment
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 13 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
25% straight line
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
.
1.5
Impairment of non-current 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell 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 which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
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 statement of financial position 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.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 14 -
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including trade and other payables, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade payables
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade payables are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.8
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.9
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 year. Taxable profit differs from net profit as reported in the income statement 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.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 16 -
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 income statement, 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.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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 are included in the income statement for the period.
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.
There are no judgements and key sources of estimation uncertainty to be disclosed.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 17 -
3
Revenue
An analysis of the company's revenue is as follows:
2019
2018
£
£
Revenue analysed by class of business
Licensing of digital images
2,547,976
1,430,610
2019
2018
£
£
Other significant revenue
Interest income
76
1
2019
2018
£
£
Revenue analysed by geographical market
United States
2,547,976
1,430,610
4
Operating profit
2019
2018
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(45)
29
Depreciation of owned property, plant and equipment
926
494
5
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
-
33,684
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Sales, marketing and administration
7
8
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
6
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
811,331
484,346
Pension costs
16,839
5,035
828,170
489,381
7
Investment income
2019
2018
£
£
Interest income
Interest on bank deposits
76
1
8
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
45,118
20,562
Foreign current tax on profits for the current period
24,190
13,649
Total current tax
69,308
34,211
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2019
2018
£
£
Profit before taxation
238,405
111,297
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
45,297
21,146
Permanent capital allowances in excess of depreciation
(179)
(585)
Effect of overseas tax rates
24,190
13,650
Taxation charge for the year
69,308
34,211
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 19 -
9
Dividends
2019
2018
£
£
Final paid
600,000
-
10
Property, plant and equipment
Fixtures, fittings & equipment
£
Cost
At 1 January 2019
23,058
Additions
1,545
At 31 December 2019
24,603
Depreciation and impairment
At 1 January 2019
19,577
Depreciation charged in the year
926
At 31 December 2019
20,503
Carrying amount
At 31 December 2019
4,100
At 31 December 2018
3,481
11
Trade and other receivables
2019
2018
Amounts falling due within one year:
£
£
Trade receivables
188,306
233,900
Corporation tax recoverable
12,744
31,749
Amounts owed by group undertakings
-
196,162
Other receivables
37,915
34,300
Prepayments and accrued income
4,373
9,407
243,338
505,518
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 20 -
12
Current liabilities
2019
2018
£
£
Trade payables
97,806
99,303
Amounts owed to group undertakings
12,977
-
Other payables
367
1,263
Accruals and deferred income
-
14,809
111,150
115,375
13
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
16,839
5,035
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.
14
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
128,364 Ordinary shares of £1 each
128,364
128,364
15
Operating lease commitments
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:
2019
2018
£
£
Within one year
72,726
75,237
Between two and five years
203,782
288,315
276,508
363,552
16
Events after the reporting date
Since the balance sheet date, the Covid-19 coronavirus has been declared a global pandemic by the World Health Organisation. The company’s response to this situation has been outlined in more depth above in the strategic report. The impact of Covid-19 is a non- adjusting post balance sheet event and has not required any adjustment to the 2019 accounts. It should be noted that there may be an impact in the future in respect of the judgment and estimates made as at the balance sheet date of 31 December
2019.
THE BRIDGEMAN ART LIBRARY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 21 -
17
Ultimate controlling party
The ultimate parent company is Bridgeman Art Library Limited, a company registered in England and Wales, which holds 100% of the share capital of the company.
There is no single ultimate controlling party.
2019-12-31
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