Company registration number 11712394 (England and Wales)
SAATCHI GALLERY, LONDON LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
SAATCHI GALLERY, LONDON LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 9
SAATCHI GALLERY, LONDON LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 1 -
2022
2021
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
3
9,250
12,250
Tangible assets
4
39,200
51,064
48,450
63,314
Current assets
Stocks
100,158
120,090
Debtors
5
491,260
1,906,723
Cash at bank and in hand
4,729,775
2,911,153
5,321,193
4,937,966
Creditors: amounts falling due within one year
6
(7,802,478)
(12,191,363)
Net current liabilities
(2,481,285)
(7,253,397)
Net liabilities
(2,432,835)
(7,190,083)
Capital and reserves
Called up share capital
1
1
Profit and loss reserves
(2,432,836)
(7,190,084)
Total equity
(2,432,835)
(7,190,083)
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 20 November 2023
Mr J Eliasch
Director
Company Registration No. 11712394
SAATCHI GALLERY, LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
1
Accounting policies
Company information
Saatchi Gallery, London Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Saatchi Gallery, Duke of York's HQ, King's Road, London, SW3 4RY.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The company performed strongly despite the overall economic conditions. Visitor numbers were on the conservative side during the first quarter of the year but by Spring and especially in Summer we saw increased attention in the gallery, especially drawn to our main 2022 exhibition “Tiffany: Vision and Virtuosity”, which generated solid visitor numbers, retail sales, sponsorships, events and this trend continued through the second half of the year with a strong art fair season in the Autumn and the gallery’s winter exhibition “The New Black Vanguard” with Burberry’s sponsorship.true
In 2022, the gallery signed a new long-term lease which guarantees its current operational premises for a decade. This, along with strong profit, has helped in reducing the accumulated deficit down to £1,432,836.
With an exciting calendar of world-class exhibitions lined up for 2023, the gallery is preparing for pre-covid levels of revenue and visitors by upskilling and upstaffing its departments and improving and modernizing its systems and processes.
Based on the factors referred to above, the director has reasonable expectation that the company will continue to operate for the foreseeable future and at least twelve months from the date of approval of these financial statements. As a result, the financial statements have been prepared on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided 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.
Turnover represents income from sponsorships, events, ticket sales, and sales of books and merchandise. Sponsorship income is recognised on a straight line basis over the length of the contract to reflect the services provided. Events income is recognised on the date the event takes place. Sales of tickets, books, and merchandise are recognised when the goods are provided to the buyer to reflect the transfer of the significant risks and rewards of ownership.
SAATCHI GALLERY, LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 3 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
5 years straight line
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
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:
Leasehold improvements
5 years straight line
Fixtures and fittings
6 years straight line
Computers
3 years 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.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
SAATCHI GALLERY, LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 4 -
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.8
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.
1.9
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 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.
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, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
SAATCHI GALLERY, LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 5 -
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
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 fixed 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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Total
30
26
SAATCHI GALLERY, LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
3
Intangible fixed assets
Other
£
Cost
At 1 January 2022 and 31 December 2022
15,000
Amortisation and impairment
At 1 January 2022
2,750
Amortisation charged for the year
3,000
At 31 December 2022
5,750
Carrying amount
At 31 December 2022
9,250
At 31 December 2021
12,250
4
Tangible fixed assets
Leasehold improvements
Plant and machinery etc
Total
£
£
£
Cost
At 1 January 2022
58,011
16,735
74,746
Additions
3,455
3,455
At 31 December 2022
58,011
20,190
78,201
Depreciation and impairment
At 1 January 2022
21,554
2,128
23,682
Depreciation charged in the year
11,602
3,717
15,319
At 31 December 2022
33,156
5,845
39,001
Carrying amount
At 31 December 2022
24,855
14,345
39,200
At 31 December 2021
36,457
14,607
51,064
5
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
246,617
242,574
Other debtors
244,643
1,664,149
491,260
1,906,723
SAATCHI GALLERY, LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
5
Debtors
(Continued)
- 7 -
Other debtors include a recoverable amount of £226,289 in respect of a loan which was overpaid in the prior financial year. This has been fully provided against (see note 6).
6
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
5,740,853
8,309,192
Amounts owed to group undertakings
188,413
186,434
Taxation and social security
299,633
230,765
Other creditors
1,573,579
3,464,972
7,802,478
12,191,363
In the prior accounting period, the company recorded an overpayment of a trading loan balance of £226,289. Throughout that period and the current period attempts have been made to recover the overpaid balance without success. Whilst those attempts will continue, a provision for bad and doubtful debts of £226,289 was recognized in the financial statements during the 2021 accounting period and thus the net balance in the financial statements is £nil.
7
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was qualified and the auditor reported as follows:
SAATCHI GALLERY, LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
7
Audit report information
(Continued)
- 8 -
Qualified opinion on financial statements
We have audited the financial statements of Saatchi Gallery, London Limited (the 'company') for the year ended 31 December 2022 which comprise , the balance sheet 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, 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 year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
We were not appointed as auditor of the company until after 31 December 2022 and thus did not observe the counting of physical inventories at the end of the year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 31 December 2022, which are included in the balance sheet at £100,158, by using other audit procedures. Consequently we were unable to determine whether any adjustment to this amount was necessary.
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 qualified opinion.
Senior Statutory Auditor:
Kalbinder Sanghera
Statutory Auditor:
Kirk Rice LLP
8
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2022
2021
£
£
21,252,280
3,115,864
SAATCHI GALLERY, LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
9
Related party transactions
Remuneration of key management personnel
During the accounting period, the Charity’s trading subsidiary, Saatchi Gallery, London Limited, made payments of £177,750 (2021: £180,000) to Jet Support Services Limited, a company involved in some aspects of providing management and oversight services to the Charity.
Further to the above, the total amount of key management personnel benefits (including employer pension contributions and employer national insurance contributions) received by other key management personnel for their services was £122,500 (2021: £67,459).
10
Parent company
Saatchi Gallery, London Limited is a wholly-owned subsidiary of The Saatchi Gallery, London, which is a charity registered in England and Wales. The charity's registered office address is The Saatchi Gallery, Duke of York's HQ, King's Road, London, SW3 4RY.
11
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Dec 2021
£
£
£
Creditors due within one year
Trade Creditors
(7,180,528)
(1,707,549)
(8,888,077)
Capital and reserves
Profit and loss reserves
(5,482,535)
(1,707,549)
(7,190,084)
Notes to reconciliation
Retained Earnings
A prior year adjustment has been recognised in order to correct a material misstatement in the comparative figures. The misstatement relates to the recognition of the cost of entering into the rental lease for the company's main premises. Initially, the cost and associated creditor had not been included in the financial statements. The adjustment is therefore correcting retained earnings for the historic cost associated with entering into the lease agreement and recognising the corresponding balance in trade creditors.