Company Registration No. 09235339 (England and Wales)
UNIT LONDON LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2022
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
UNIT LONDON LTD
CONTENTS
Page
Company information
1
Strategic report
2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
UNIT LONDON LTD
COMPANY INFORMATION
- 1 -
Directors
Mr J D G Burt
Mr J J E Kennedy
Company number
09235339
Registered office
3 Hanover Square
London
W1S 1HD
Auditor
TC Group
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
UNIT LONDON LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -

The directors present the strategic report for the year ended 31 December 2022.

Fair review of the business

The total profit for the year, after taxation, amounted to £715,616 (2021- £1,023,874)

 

The turnover in the year is considered by the Directors to be satisfactory given the economic climate and while sales fluctuate seasonally and depend on market trends, the gallery maintains a steady flow of income throughout the year leveraging both the primary and secondary markets in equal proportion. The Directors are pleased to report a profit for the business and have a strong belief in the future of the company.

Principal risks and uncertainties

Foreign exchange risk

The company is exposed to movement in foreign exchange rates as a result of transactions with key clients and suppliers. The company manages these risks by maintaining foreign currency bank accounts.

 

Credit risk

The directors do not consider the company to have significant credit risk. The company has implemented solid policies and arrangements with clients to minimise the potential credit risk. Title to artwork is not transferred until full settlement has been made by the client.

 

Liquidity risk

The company manages the liquidity position with the objective of maintaining the ability to fund commitments and repay liabilities in accordance with suppliers’ payment terms.

 

Development and performance

The gallery experienced strong sales in the year and hopes to continue on this trajectory with a strategic commitment to expanding into new markets and diversifying revenue streams. This strategic expansion will be supported by the recruitment of essential senior staff members and the integration of technological advancements to enhance business efficiency and productivity. These efforts are anticipated to significantly increase revenue while concurrently reducing operational expenses, laying the groundwork for sustainable growth for the business.

Key performance indicators

The Directors consider the key performance indicators of the company to be turnover, gross profit, net profit and net assets, all of which are disclosed within these financial statements.

On behalf of the board

Mr J J E Kennedy
Director
5 April 2024
UNIT LONDON LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company continued to be that of retail sale in commercial art galleries.

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £122,195. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr J D G Burt
Mr J J E Kennedy
Post reporting date events

Until 30th November 2023 the company was a 100% owned subsidiary of J&J Group Holdings LTD.

On 1st December 2023, the company underwent group restructuring, and as a result the ownership was transferred to Mr J J E Kennedy and Mr J D G Burt, who jointly hold 100% ownership of the company in equal proportion.

Auditor

TC Group were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

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.

On behalf of the board
Mr J J E Kennedy
Director
5 April 2024
UNIT LONDON LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR 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:

 

 

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.

UNIT LONDON LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF UNIT LONDON LTD
- 5 -

Qualified opinion on financial statements

We have audited the financial statements of Unit London Ltd (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

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 stock at the end of the year. We were unable to satisfy ourselves by alternative means concerning the stock quantities held at 31 December 2022, which are included in the balance sheet at £1,913,061, by using other auditing procedures. Consequently we are 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 the provisions available for small entities, in the circumstances set out in note 20 to the financial statements, 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.

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.

UNIT LONDON LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNIT LONDON LTD
- 6 -

Other information

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.

 

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the stock quantities of £1,913,061 held at 31 December 2022. We have concluded that where the other information refers to the inventory balances or related balances such as cost of sales, it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effect of the matter described in the basis for qualified opinion sections of our report, in our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In respect solely of the limitation on our work relating to stock, described below:

 

Except for the matter described in the basis for qualified opinion section of our report, 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 in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

UNIT LONDON LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNIT LONDON LTD
- 7 -
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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

UNIT LONDON LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNIT LONDON LTD
- 8 -

Our approach was as follows:

 

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

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. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.

 

UNIT LONDON LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNIT LONDON LTD
- 9 -
Philip Clark FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
5 April 2024
Office: London
UNIT LONDON LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
2022
2021
Notes
£
£
Turnover
3
15,958,384
13,476,370
Cost of sales
(11,976,706)
(9,939,326)
Gross profit
3,981,678
3,537,044
Administrative expenses
(3,074,263)
(2,278,178)
Other operating income
-
0
15,000
Operating profit
4
907,415
1,273,866
Interest payable and similar expenses
7
(62)
(409)
Profit before taxation
907,353
1,273,457
Tax on profit
8
(191,737)
(249,580)
Profit for the financial year
715,616
1,023,877

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 14 to 25 form part of these financial statements
UNIT LONDON LTD
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
625,170
625,421
Current assets
Stocks
11
1,913,061
1,149,438
Debtors
12
2,692,880
3,764,291
Cash at bank and in hand
1,726,150
3,073,623
6,332,091
7,987,352
Creditors: amounts falling due within one year
13
(3,343,289)
(5,592,222)
Net current assets
2,988,802
2,395,130
Total assets less current liabilities
3,613,972
3,020,551
Capital and reserves
Called up share capital
15
100
100
Profit and loss reserves
3,613,872
3,020,451
Total equity
3,613,972
3,020,551
The financial statements were approved by the board of directors and authorised for issue on 5 April 2024 and are signed on its behalf by:
Mr J J E Kennedy
Director
Company Registration No. 09235339
The notes on pages 14 to 25 form part of these financial statements
UNIT LONDON LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2021
100
1,996,574
1,996,674
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
1,023,877
1,023,877
Balance at 31 December 2021
100
3,020,451
3,020,551
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
715,616
715,616
Dividends
9
-
(122,195)
(122,195)
Balance at 31 December 2022
100
3,613,872
3,613,972
The notes on pages 14 to 25 form part of these financial statements
UNIT LONDON LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
18
(1,124,891)
1,263,796
Interest paid
(62)
(409)
Net cash (outflow)/inflow from operating activities
(1,124,953)
1,263,387
Investing activities
Purchase of tangible fixed assets
(115,845)
13,467
Receipts arising from loans made
15,520
(15,520)
Net cash used in investing activities
(100,325)
(2,053)
Financing activities
Dividends paid
(122,195)
-
0
Net cash used in financing activities
(122,195)
-
0
Net (decrease)/increase in cash and cash equivalents
(1,347,473)
1,261,334
Cash and cash equivalents at beginning of year
3,073,623
1,812,289
Cash and cash equivalents at end of year
1,726,150
3,073,623
The notes on pages 14 to 25 form part of these financial statements
UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
1
Accounting policies
Company information

Unit London Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 3 Hanover Square, London, W1S 1HD.

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, 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.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

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.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of artworks 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.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
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.

UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -

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
10% Straight line methord
Fixtures and fittings
33% Straight line methord
Computers
33% Straight line methord

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 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). 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
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.

UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.7
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.

1.8
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.

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.

UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
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.

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.

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 subsequently 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 through 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.

1.9
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.

UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -
1.10
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 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.

1.11
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
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.

UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
1.14
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.

 

In the opinion of the directors there are no significant judgements or areas of estimation uncertainty.

 

3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Sale from art galleries
15,958,384
13,476,370
2022
2021
£
£
Turnover analysed by geographical market
Asia
6,583,494
8,249,543
Europe
4,068,345
1,971,361
North America
3,072,407
2,754,409
Rest of the world
2,234,138
501,057
15,958,384
13,476,370
UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(216,385)
18,151
Depreciation of owned tangible fixed assets
116,096
116,632
Operating lease charges
324,643
324,429
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2022
2021
Number
Number
23
20

Their aggregate remuneration comprised:

2022
2021
£
£
Wages and salaries
1,439,773
952,014
Social security costs
183,364
131,062
Pension costs
31,495
26,982
1,654,632
1,110,058
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
461,007
311,533
Company pension contributions to defined contribution schemes
13,830
9,346
474,837
320,879
UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
6
Directors' remuneration
(Continued)
- 21 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
245,358
205,035
7
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
62
409
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
191,737
249,580

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:

2022
2021
£
£
Profit before taxation
907,353
1,273,457
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
172,397
241,957
Tax effect of expenses that are not deductible in determining taxable profit
19,340
7,623
Taxation charge for the year
191,737
249,580
9
Dividends
2022
2021
£
£
Interim paid
122,195
-
0
UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
10
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2022
928,178
149,175
14,442
1,091,795
Additions
86,606
18,910
10,329
115,845
At 31 December 2022
1,014,784
168,085
24,771
1,207,640
Depreciation and impairment
At 1 January 2022
325,764
136,846
3,764
466,374
Depreciation charged in the year
97,431
11,288
7,377
116,096
At 31 December 2022
423,195
148,134
11,141
582,470
Carrying amount
At 31 December 2022
591,589
19,951
13,630
625,170
At 31 December 2021
602,414
12,329
10,678
625,421
11
Stocks
2022
2021
£
£
Stocks of artwork
1,913,061
1,149,438
12
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
1,202,991
1,668,219
Amounts owed by group undertakings
-
0
366,821
Other debtors
909,935
229,485
Prepayments and accrued income
579,954
1,499,766
2,692,880
3,764,291
UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
13
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
536,917
1,490,181
Amounts owed to group undertakings
-
0
6,992
Corporation tax
441,317
249,580
Other taxation and social security
83,749
139,123
Other creditors
47,589
31,457
Accruals and deferred income
2,233,717
3,674,889
3,343,289
5,592,222
14
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
31,495
26,982

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.

15
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
100
100
100
100
16
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
16
Related party transactions
(Continued)
- 24 -

Unit X Ltd is related to Unit London by virtue of common directorship and ownership. Unit X repaid Unit London Ltd £921.94 in the period (2021 - £22,593.95). As of the 31st of December 2022, £99,072.83 remained outstanding and is included within other debtors.

 

Unit London Editions is related to Unit London Ltd by virtue of common directorship and ownership. Unit London repaid £6,991.53 and loaned Unit London Editions Ltd £8,,543.94 in the period (2021 - £6,991.53) . As of the 31st of December 2022, £8,543.94 remained outstanding and is included within other debtors.

 

Unit London Digital OÜ is related to Unit London by virtue of common directorship and ownership. Unit London Ltd loaned Unit London Digital OÜ £259,521.55 (2021 - £266,826.27) in the period. As of the 31st of December 2022, £526,347.82 remained outstanding and is included within other debtors.

17
Directors' transactions

During the period the Joseph Kennedy a director of the business repaid £15,520 to Unit London Ltd.

Description
% Rate
Opening balance
Amounts repaid
Closing balance
£
£
£
Mr J J E Kennedy -
-
15,520
(15,520)
-
15,520
(15,520)
-
18
Cash (absorbed by)/generated from operations
2022
2021
£
£
Profit for the year after tax
715,616
1,023,877
Adjustments for:
Taxation charged
191,737
249,580
Finance costs
62
409
Depreciation and impairment of tangible fixed assets
116,096
116,632
Movements in working capital:
Increase in stocks
(763,623)
(1,149,438)
Decrease/(increase) in debtors
1,055,891
(3,748,771)
(Decrease)/increase in creditors
(2,440,670)
5,342,642
Cash (absorbed by)/generated from operations
(1,124,891)
1,834,931
UNIT LONDON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
19
Analysis of changes in net funds
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
3,073,623
(1,347,473)
1,726,150
20
Non-audit services provided by auditor

In common with many businesses of our size and nature we use our auditor to prepare and submit returns to the tax authorities and assist with the preparation of the financial statements.

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