Company registration number 01852837 (England and Wales)
CONNAUGHT BROWN PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
CONNAUGHT BROWN PLC
COMPANY INFORMATION
Directors
Mr A Brown
Mr B Newmark
Mr E Lawson
Secretary
Mr A Brown
Company number
01852837
Registered office
2 Albemarle Street
London
W1S 4HD
Auditor
Blinkhorns
27 Mortimer Street
London
W1T 3BL
CONNAUGHT BROWN PLC
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Income statement
8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
CONNAUGHT BROWN PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The Directors are pleased to present the accounts for the year ending 31 March 2024.

Strategic Management

Connaught Brown is one of London’s leading fine art galleries. The gallery specialises in paintings and drawings by the French Impressionists, Post-Impressionists and Modern Masters. It also represents the work of a number of leading Contemporary artists.

Led by Anthony Brown, the gallery is highly respected for its knowledge of and specialisation in these fields. For more than 37 years, it has organised exciting exhibitions, many of which have been seminal in their re-evaluation of the art historical importance of certain artists and movements. Since the gallery is constantly buying and selling it has a large and continuously changing collection of art works available for sale.

Business Environment

Although this has been a very successful year for the gallery the profits are less than last year’s. The Board recognise last year’s results were exceptional and are pleased this year’s strong profits and turnover reflect the continuing success and development of the company. It is in the nature of the art market that a few deals substantially changes the profitability of the company.

This year’s results can be attributed to the gallery’s work with one or two highly active clients and our strong relationship with a core group of dealers in the same field.

The TEFAF art fair this year was not as strong as last year but we continue to benefit from clients recognising the strength of our brand which makes them comfortable to purchase from us in that environment. There is an unpredictable nature to art fairs, we sold a painting this year that we had had as one of our important works last year. The client had wanted to buy it then but had seen something else first and could not afford to buy both and was delighted to have the opportunity to buy it this year.

There has been a slowdown in a number of areas of the art market and particularly in expensive works that are not of outstanding quality. Quite what the mood will be in the coming year is not certain but there appears to be a continuing appetite for good work. Political and economic upheaval is bound to affect the market.

We held a major exhibitions last year, Renoir and Pissarro I Different Views. This was probably the most important impressionist exhibition held by a commercial gallery for many years. Had it been held in a museum it would have attracted large crowds. As it was the exhibition was well received and those that saw it were amazed at the quality but it did not attract the queues it should have done and was only fairly successful financially although it has definitely raised our profile in the art world.

The burden of paperwork and weight of taxes continues to multiply. The Revenue seem to be obsessed with money laundering in small companies. The import and export paperwork is cumbersome and expensive which is driving up transport costs. It is, as I mentioned last year, obvious to us all that the market is slowly moving away from London which is a concern in the long-term.

The company is exposed to a number of risks and uncertainties, particularly in relation to foreign exchange and world events. Also, as you can read above, the company’s profitability rests on a few successful deals. Our balance sheet remains strong but we are reliant upon a healthy world economy and exhibitions and art fairs taking place. We believe that continuing to keep a high level of liquidity is prudent and allows us to take advantage of opportunities that do and will appear.

Provenance, condition and authenticity are always issues in our market.

The directors understand the importance of these risks and work to address them through looking for new outlets for sales, keeping updated on trade developments, regular reviews and constantly improving the way in which works are researched.

CONNAUGHT BROWN PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

Business Performance and Position

Shareholders will see from page 8 of the accounts that the turnover has remained much the same from £11.8 million to £11.7 million and profits before tax have fallen to £912,395 (2023: £1,335,318).

 

Other Key Performance indicators:

 

The Board has determined in view of the continuing strong results but to stay prudent, to raise the dividend to 8p per share and to pay a special additional dividend of 4p.

They have also, subject to shareholder approval, resolved to repurchase up to 60,000 shares this financial year at £2.50 per share.

On behalf of the board

Mr A Brown
Chairman
19 September 2024
CONNAUGHT BROWN PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities
The principal activity of the company continued to be that of art dealers.
Directors

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

Mr A Brown
Mr B Newmark
Mr E Lawson
Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £170,367. The directors do not recommend payment of a final dividend.

Supplier payment policy

It is the company's policy to fix terms of payment with their suppliers when agreeing the terms of each business transaction, to ensure the supplier is aware of those terms and to abide by the agreed terms of payment.

 

The company had 10.1 days (2023 : 30.5 days) trade purchases outstanding at 31 March 2024.

Auditor

The auditor, Blinkhorns, 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.

On behalf of the board
Mr A Brown
Director
19 September 2024
CONNAUGHT BROWN PLC
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 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.

CONNAUGHT BROWN PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CONNAUGHT BROWN PLC
- 5 -
Opinion

We have audited the financial statements of Connaught Brown Plc (the 'company') for the year ended 31 March 2024 which comprise the income statement, the statement of comprehensive income, the statement of financial position, 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 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 the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent 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.

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.

 

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:

CONNAUGHT BROWN PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CONNAUGHT BROWN PLC
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or 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:

 

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.

 

We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.  The key laws and regulations we have considered in this context included the Companies Act 2006, pensions and tax legislation. In addition, we have considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

 

 

 

 

CONNAUGHT BROWN PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CONNAUGHT BROWN PLC
- 7 -

 

 

 

 

Based on the results of our risk assessment we designed our audit procedures to identify and to address material misstatements in relation to fraud, including:

 

 

- The possibility of fraudulent or corrupt payments made through third parties.

- The risk of bribery and corruption.

- The opportunity to segregate duties within the entity.

 

 

We considered the extent to which the audit was considered capable of detecting irregularities.

 

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentation, or through collusion.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, 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 members 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 members as a body, for our audit work, for this report, or for the opinions we have formed.

David Cramer FCA (Senior Statutory Auditor)
For and on behalf of Blinkhorns
19 September 2024
27 Mortimer Street
London
W1T 3BL
CONNAUGHT BROWN PLC
INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
11,697,978
11,800,814
Cost of sales
(9,567,558)
(8,821,120)
Gross profit
2,130,420
2,979,694
Administrative expenses
(1,259,566)
(1,650,534)
Operating profit
4
870,854
1,329,160
Interest receivable and similar income
7
41,541
6,158
Profit before taxation
912,395
1,335,318
Taxation
8
(228,098)
(254,244)
Profit for the financial year
684,297
1,081,074
Total comprehensive income for the year
684,297
1,081,074
Earnings per share
21
60.1p
94.4p

The income statement has been prepared on the basis that all operations are continuing operations.

CONNAUGHT BROWN PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
£
£
Profit for the year
684,297
1,081,074
Other comprehensive income
-
-
Total comprehensive income for the year
684,297
1,081,074
CONNAUGHT BROWN PLC
STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2024
31 March 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
35,264
43,486
Investments
13
1,000
1,000
36,264
44,486
Current assets
Stocks
14
2,701,130
3,483,927
Debtors
15
7,502
88,275
Cash at bank and in hand
5,434,803
5,190,131
8,143,435
8,762,333
Creditors: amounts falling due within one year
16
(1,051,568)
(2,171,598)
Net current assets
7,091,867
6,590,735
Total assets less current liabilities
7,128,131
6,635,221
Provisions for liabilities
18
(2,430)
(3,084)
Net assets
7,125,701
6,632,137
Capital and reserves
Called up share capital
20
225,695
228,015
Share premium account
725,090
725,090
Capital redemption reserve
24,220
21,900
Profit and loss reserves
6,150,696
5,657,132
Total equity
7,125,701
6,632,137
Net Assets per Share
21
631.4p
581.7p
The financial statements were approved by the board of directors and authorised for issue on 19 September 2024 and are signed on its behalf by:
Mr A Brown
Chairman
Company Registration No. 01852837
CONNAUGHT BROWN PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 April 2022
230,095
725,090
19,820
4,661,782
5,636,787
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
-
1,081,074
1,081,074
Dividends
9
-
-
-
(85,724)
(85,724)
Redemption of shares
20
-
0
-
0
2,080
-
0
2,080
Reduction of shares
20
(2,080)
-
0
-
-
0
(2,080)
Balance at 31 March 2023
228,015
725,090
21,900
5,657,132
6,632,137
Year ended 31 March 2024:
Profit and total comprehensive income
-
-
-
684,297
684,297
Dividends
9
-
-
-
(170,367)
(170,367)
Redemption of shares
20
-
0
-
0
2,320
-
0
2,320
Reduction of shares
20
(2,320)
-
0
-
-
0
(2,320)
Transfers
-
-
-
(20,365)
(20,365)
Balance at 31 March 2024
225,695
725,090
24,220
6,150,696
7,125,701
CONNAUGHT BROWN PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
673,247
2,705,961
Income taxes paid
(253,335)
(123,964)
Net cash inflow from operating activities
419,912
2,581,997
Investing activities
Purchase of tangible fixed assets
-
0
(5,599)
Interest received
41,541
6,158
Net cash generated from investing activities
41,541
559
Financing activities
Redemption of shares
(20,365)
-
0
Dividends paid
(170,367)
(85,724)
Net cash used in financing activities
(190,732)
(85,724)
Net increase in cash and cash equivalents
270,721
2,496,832
Cash and cash equivalents at beginning of year
5,100,572
2,603,740
Cash and cash equivalents at end of year
5,371,293
5,100,572
Relating to:
Cash at bank and in hand
5,434,803
5,190,131
Bank overdrafts included in creditors payable within one year
17
(63,510)
(89,559)
CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
1
Accounting policies
Company information

Connaught Brown Plc is a public company limited by shares incorporated in England and Wales. The registered office is 2 Albemarle Street, London, W1S 4HD.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The financial statements present information about the company as an individual undertaking and not about its group. The company is exempt under section 405(2) of the Companies Act 2006 from the requirement to prepare consolidated financial statements as the directors consider that Connaught Brown Management Limited is not, in the opinion of the directors, a material subsidiary for the purpose of giving a true and fair view.

1.2
Going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.

1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Sales by the Company of third party stock held on consignment are included in turnover at their gross sales price less VAT, with the proportion due to the consignee being included in the cost of sales.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, 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
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 of assets less their residual values over their useful lives on the following bases:

Land and buildings Short Leasehold
Over the length of the lease
Fixtures, fittings & equipment
10% Straight line
Motor vehicles
Straight Line over 4 years

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.

CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
1.5
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.6
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.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell. Cost comprises direct costs and, where applicable those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Consignment Stock is not included within the Balance Sheet.

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 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.

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.

CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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.

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.

CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the 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.

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.

 

In view of the increasing corporation tax rates, the deferred tax will be affected in the future.

1.12
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. This is a change on transition but is not, in the opinion of the directors, considered to be material.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

Rentals payable under operating leases are charged to the income statement on a straight line basis over the term of the relevant lease.

CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
1.15
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.

 

The company estimates the useful lives of property, plant and equipment based on the period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant assets. In addition, the estimation of the useful lives of property, plant and equipment are based on internal technical evaluation and experience with similar assets.                                             

There were no other critical judgements or sources of estimation uncertainty that the directors have made in the process of applying the accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

3
Turnover

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Sale of works of art
11,697,214
11,799,665
Other income
764
1,149
11,697,978
11,800,814

A geographical analysis of turnover is not provided as the directors consider that disclosure would be prejudicial to the Company's interest.

 

CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(568)
(117)
Depreciation of owned tangible fixed assets
8,222
10,466
Operating lease charges
178,289
140,263
5
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
587,349
876,985
Company pension contributions to defined contribution schemes
42,000
43,863
629,349
920,848

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).

Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
599,280
888,784
Company pension contributions to defined contribution schemes
42,000
43,863
6
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
10,220
9,870
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
41,541
6,158
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
228,752
253,336
CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
8
Taxation
2024
2023
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
(654)
908
Total tax charge
228,098
254,244

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:

2024
2023
£
£
Profit before taxation
912,395
1,335,318
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
228,099
253,710
Tax effect of expenses that are not deductible in determining taxable profit
(1,402)
(546)
Depreciation on assets not qualifying for tax allowances
2,055
1,988
Deferred tax - timing differences
(654)
(908)
Taxation charge for the year
228,098
254,244
9
Dividends
2024
2023
£
£
Interim paid
170,367
85,724
10
Employees

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

2024
2023
Number
Number
Management
3
3
Administration and Research
3
3
6
6
CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
10
Employees
(Continued)
- 20 -

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
694,102
976,218
Social security costs
93,680
133,757
Pension costs
45,203
46,840
832,985
1,156,815
11
Tangible fixed assets
Land and buildings Short Leasehold
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2023 and 31 March 2024
60,564
86,673
56,501
203,738
Depreciation and impairment
At 1 April 2023
60,564
69,011
30,677
160,252
Depreciation charged in the year
-
0
1,766
6,456
8,222
At 31 March 2024
60,564
70,777
37,133
168,474
Carrying amount
At 31 March 2024
-
0
15,896
19,368
35,264
At 31 March 2023
-
0
17,662
25,824
43,486
12
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
13
1,000
1,000
13
Subsidiaries

Details of the company's subsidiaries at 31 March 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Connaught Brown Management Ltd
UK
Ordinary
100.00

The investments in subsidiaries are all stated at cost.

CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
14
Stocks
2024
2023
£
£
Finished goods and goods for resale
2,701,130
3,483,927
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,273
67,993
Other debtors
-
0
16,568
Prepayments and accrued income
3,229
3,714
7,502
88,275
16
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
17
63,510
89,559
Trade creditors
263,689
729,283
Amounts owed to group undertakings
16,908
16,908
Corporation tax
228,757
253,340
Other taxation and social security
66,468
89,315
Other creditors
230,050
403,545
Accruals and deferred income
182,186
589,648
1,051,568
2,171,598
17
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
63,510
89,559
Payable within one year
63,510
89,559

 

 

CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
18
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2024
2023
Balances:
£
£
ACAs
2,430
3,084
2024
Movements in the year:
£
Liability at 1 April 2023
3,084
Credit to profit or loss
(654)
Liability at 31 March 2024
2,430

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period. In view of the increasing corporation tax rates, the deferred tax will be affected in the future.

19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
45,203
46,840

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.

20
Share capital
2024
2023
£
£
Ordinary share capital
Issued and fully paid
1,128,480 (2023: 1,140,080) Ordinary shares of 20p each
225,695
228,015
21
Earnings per share

The earnings per share has been calculated on a profit after taxation of £684,297 (2023: £1,081,074) divided by 1,138,712 (2023: 1,144,805) ordinary shares of 20p each in issue throughout the year (weighted average).

 

Net assets value has been calculated on net assets of £7,125,701 (2023: £6,632,137) divided by 1,128,480 (2023: 1,140,080) ordinary shares of 20p each in issue at the balance sheet date.

CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
22
Operating lease commitments
Lessee

Operating lease payments represent rental payments for their premises.

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:

2024
2023
£
£
Within one year
124,500
124,500
Between two and five years
166,000
290,500
290,500
415,000
23
Directors' transactions

Dividends totalling £40,701 (2023 - £24,294) were paid in the year in respect of shares held by the company's directors.

24
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
684,297
1,081,074
Adjustments for:
Taxation charged
228,098
254,244
Investment income
(41,541)
(6,158)
Depreciation and impairment of tangible fixed assets
8,222
10,466
Movements in working capital:
Decrease in stocks
782,796
95,038
Decrease/(increase) in debtors
80,773
(57,299)
(Decrease)/increase in creditors
(1,069,398)
1,328,596
Cash generated from operations
673,247
2,705,961
25
Analysis of changes in net funds
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
5,190,131
244,672
5,434,803
Bank overdrafts
(89,559)
26,049
(63,510)
5,100,572
270,721
5,371,293
CONNAUGHT BROWN PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
26
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.

 

In common with many other businesses of our size and nature we use our auditor to provide tax advice and to represent us, as necessary, at tax tribunals.

 

 

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