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Registered number: 00872520










WADDINGTON CUSTOT GALLERIES LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
COMPANY INFORMATION


Directors
Jacob Twyford 
Nizar Kanji 
Victor Custot (appointed 28 August 2024)




Company secretary
Nizar Kanji



Registered number
00872520



Registered office
11 Cork Street

London

W1S 3LT




Independent auditors
Greenback Alan LLP
Chartered Accountants

89 Spa Road

London

SE16 3SG





 
WADDINGTON CUSTOT GALLERIES LIMITED
 

CONTENTS



Page
Strategic Report
 
1
Directors' Report
 
2 - 3
Independent Auditors' Report
 
4 - 7
Statement of Comprehensive Income
 
8
Statement of Financial Position
 
9
Statement of Changes in Equity
 
10
Statement of Cash Flows
 
11
Analysis of Net Debt
 
12
Notes to the Financial Statements
 
13 - 28


 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors, in preparing this strategic report, have complied with s414C of the Companies Act 2006.

Fair review of the business
 
Waddington Custot Galleries Limited ('the company') continues its activities as art dealers.
The company continued to perform well with turnover in 2023 of £18.4m (2022: £18.8m) and profit before tax of  £1.1m (2022: £3.5m).
 

Key performance indicators
 
The company's directors continue to monitor closely the key performance indicators, whilst acknowledging that many other factors significantly affect the performance and strategic decisions made by the board.

Principal risks and uncertainties
 
2024 started with better than expected results given the ongoing slowdown in the art market globally. Second quarter results were more reflective of the general situation and the board anticipates a continuation of the current conditions at least in the short term. 
Despite the difficult trading environment, there are significant opportunities for the company in the second half of 2024 with a strong exhibition program and an expectation that the market globally should begin to recover as interest rates lower and the current cycle of political uncertainty caused by elections around the world is settled. 
Art fairs remain an important but difficult market for the company with falling returns and rising costs, but we remain committed to the key fairs and confident that we can still achieve a reasonable return from these opportunities with good cost management and focus. In the short term profitability is likely to sufffer a bit, but the marketing opportunities outway the risks.
Overall, the board is taking a moderate, cautious approach with a concentration on cashflow and expenditure and protecting margins. Profits are expected to be slightly lower than in previous years but the board is confident that this is a short term effect and not a threat.


This report was approved by the board on and signed on its behalf.




Jacob Twyford
Director

Date: 16 September 2024

Page 1

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The profit for the year, after taxation, amounted to £769,000 (2022 - £2,787 thousand).

There was a tax charge of £319,000 (2022: charge of £691,000). The directors do not recommend a final dividend (2021: £nil).

Directors

The directors who served during the year were:

Jacob Twyford 
Nizar Kanji 

Future developments

The future developments have been discussed in the Strategic Report on Page 1.

Post balance sheet events

The directors have declared that there have been no material post balance sheet events that would require disclosure or adjustment to these financial statements.

Page 2

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Cash flow risk

The Company’s activities expose it to financial risks of changes in foreign currency exchange rates, but by holding accounts in all the currencies dealt in, the exposure is hedged to a large extent.  There is also sufficient cash at bank to manage any short term debts.

Credit risk

The credit risk is low with no bad debts, due to the majority of clients not receiving their art until full settlement has been received.

Going concern

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in preparing the annual financial statements.  Further details regarding the adoption of the going concern basis can be found in the statement of accounting policies in the financial statements.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditorsGreenback Alan LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





Jacob Twyford
Director

Date: 16 September 2024

Page 3

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WADDINGTON CUSTOT GALLERIES LIMITED
 

Opinion


We have audited the financial statements of Waddington Custot Galleries Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 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 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 Auditors' 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


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


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 4

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WADDINGTON CUSTOT GALLERIES LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


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:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 2, 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.


Page 5

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WADDINGTON CUSTOT GALLERIES LIMITED (CONTINUED)


Auditors' 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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained a general understanding of the company's legal and regulatory framework through enquiry of management concerning: their understanding of relevant laws and regulations; the entity's policies and procedures regarding compliance; and how they identify, evaluate and account for litigation claims. We also drew on our existing understanding of the company's industry and regulation.
We understand that the company complies with the framework through having in place robust procedures and policies and by outsourcing and taking external professional legal, tax and accounting advice on relevant specialist functions and areas including the preparation of financial statements and corporate tax compliance.
In the context of the audit, we considered those laws and regulations: which determine the form and content of the financial statements; those which are central to the company's ability to conduct its business; and where failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the company:
The Companies Act 2006, FRS 102, UK corporate tax laws
The senior statutory auditor led a discussion with all members of the engagement team regarding the susceptibility of the company's financial statements to material misstatement, including how fraud might occur. The areas identified in this discussion were:
 - Manipulation or error of stock existence arising from the omission or inappropriate inclusion of significant                   individual artworks in stock leading to over or understatement of profits and assets; 
 -Manipulation or error in stock valuation arising from obsolescence or market trends leading to overstatement of profits and assets;
 - Manipulation or error in ensuring that the corresponding artwork purchase is recognised in the same year as the artwork sale, leading to overstated profits.
 - Manipulation or error in raising accruals in respect of artwork and other  costs incurred but not invoiced before the balance sheet date that include a significant element of judgement, leading to overstated profits.
The procedures we carried out to gain sufficient appropriate audit evidence in the above areas included:
 - Identifying and assessing the design effectiveness of controls which management has in place to prevent   and detect fraud and error;
 - Understanding the potential for override of these controls on the financial reporting process, and how  those charged with governance address these override potentials;
 - Performing tests of controls and substantive testing on appropriate samples, attending the stock count and investigating any discrepancies identified;
 - The verification of a sample of sales made in the year, ensuring that recognition was in line with the company's accounting policy and the corresponding artwork purchase was recognised in the same year.
 - Documenting the assumptions and judgements made by management in their significant accounting  
Page 6

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WADDINGTON CUSTOT GALLERIES LIMITED (CONTINUED)


estimates and challenging these with management;
 - Identifying and testing journal entries, in particular those around the year-end, and those involving unusual  postings, account combinations or amounts.
Overall, the senior statutory auditor was satisfied that the engagement team collectively had the appropriate competence and capabilities to identify or recognise irregularities. In particular, the senior statutory auditor has a number of years' experience in dealing with similar Art Dealer businesses and preparing accounts under FRS 102.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our 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 Auditors' 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.






Ian Rowe (Senior Statutory Auditor)
  
for and on behalf of
Greenback Alan LLP
 
Chartered Accountants
  
89 Spa Road
London
SE16 3SG


16 September 2024
Page 7

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£000
£000

  

Turnover
  
18,401
18,812

Cost of sales
  
(12,029)
(11,212)

Gross profit
  
6,372
7,600

Distribution costs
  
(4,740)
(3,939)

Administrative expenses
  
(555)
(139)

Operating profit
 5 
1,077
3,522

Interest receivable and similar income
 9 
42
9

Interest payable and similar expenses
 10 
(31)
(53)

Profit before tax
  
1,088
3,478

Tax on profit
 11 
(319)
(691)

Profit for the financial year
  
769
2,787

Other comprehensive income for the year
  

Total comprehensive income for the year
  
769
2,787

The notes on pages 13 to 28 form part of these financial statements.

Page 8

 
WADDINGTON CUSTOT GALLERIES LIMITED
REGISTERED NUMBER: 00872520

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£000
£000

Fixed assets
  

Tangible fixed assets
 12 
20
37

  
20
37

Current assets
  

Stocks
 14 
25,374
25,121

Debtors: amounts falling due within one year
 15 
1,922
1,441

Cash at bank and in hand
 16 
1,503
3,957

  
28,799
30,519

Creditors: amounts falling due within one year
 17 
(3,494)
(6,000)

Net current assets
  
 
 
25,305
 
 
24,519

Total assets less current liabilities
  
25,325
24,556

  

Net assets
  
25,325
24,556


Capital and reserves
  

Called up share capital 
  
252
252

Capital redemption reserve
  
257
257

Profit and loss account
  
24,816
24,047

  
25,325
24,556


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 16 September 2024.




Jacob Twyford
Director

The notes on pages 13 to 28 form part of these financial statements.

Page 9

 
WADDINGTON CUSTOT GALLERIES LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£000
£000
£000
£000


At 1 January 2022
252
257
21,260
21,769


Comprehensive income for the year

Profit for the year
-
-
2,787
2,787
Total comprehensive income for the year
-
-
2,787
2,787


Total transactions with owners
-
-
-
-



At 1 January 2023
252
257
24,047
24,556


Comprehensive income for the year

Profit for the year
-
-
769
769
Total comprehensive income for the year
-
-
769
769


Total transactions with owners
-
-
-
-


At 31 December 2023
252
257
24,816
25,325


The notes on pages 13 to 28 form part of these financial statements.

Page 10

 
WADDINGTON CUSTOT GALLERIES LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£000
£000

Cash flows from operating activities

Profit for the financial year
769
2,787

Adjustments for:

Depreciation of tangible assets
18
26

Interest paid
31
53

Interest received
(42)
(9)

Taxation charge
319
691

(Increase) in stocks
(253)
(2,103)

(Increase)/decrease in debtors
(481)
36

(Decrease)/increase in creditors
(1,667)
578

Corporation tax (paid)
(658)
(245)

Net cash generated from operating activities

(1,964)
1,814


Cash flows from investing activities

Purchase of tangible fixed assets
(1)
(21)

Interest received
42
9

Net cash from investing activities

41
(12)

Cash flows from financing activities

Repayment of loans
(500)
(1,000)

Interest paid
(31)
(53)

Net cash used in financing activities
(531)
(1,053)

Net (decrease)/increase in cash and cash equivalents
(2,454)
749

Cash and cash equivalents at beginning of year
3,957
3,208

Cash and cash equivalents at the end of year
1,503
3,957


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,503
3,957

1,503
3,957


Page 11

 
WADDINGTON CUSTOT GALLERIES LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
£000

£000

£000

Cash at bank and in hand

3,957

(2,454)

1,503

Debt due within 1 year

(500)

500

-


3,457
(1,954)
1,503

The notes on pages 13 to 28 form part of these financial statements.

Page 12

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Waddington Custot Galleries Limited is a private company limited by shares incorporated in the United Kingdom and registered in England and Wales under the Companies Act. The registered office is 11 Cork Street, London, W1S 3LT.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

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

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 13

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of turnover can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.5

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.6

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.7

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

  
2.8

Employee benefits

The costs of short-term employee benefits are recognised as a liablity and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets. 
Termination benefits are recognised immediately as an expense when the company is demonstrably commited to terminate the employment of an employee or to provide termination benefits.

 
2.9

Retirement benefits

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Page 14

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.10

Leases

Rentals payable under operating leases, including any lease incentives received, are charged to the profit and loss account 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 lease asset are consumed.

 
2.11

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

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 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 prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Land and building Leasehold
-
Over the term of the leases
Motor vehicles
-
20%
per annum
Computer equipment & furniture
-
20%
per annum

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 15

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in profit or loss for the period.

  
2.14

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 cost, adjusted where applicable for any loss of service potential. 
At each reporting date, an assessment is made for impairment, by a director of the company. 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.

 
2.15

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.17

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.18

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Page 16

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.18
Financial instruments (continued)

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Page 17

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.18
Financial instruments (continued)


Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

  
2.19

Equity instruments

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

Page 18

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies 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 course of preparing the financial statements, no judgements have been made in the process of applying the company's accounting policies, other than those as discussed below that have had a significant effect on the amounts recognised in the financial statements.
Stock is valued at the lower of cost and net realisable value of individual works of art. In determining an estimate of net realisable value, management has made judgements in respect the quality of the works and the current art market using extensive art expertise.


4.


Turnover

2023
2022
£000
£000


Sales of art works
18,401
18,812

18,401
18,812



5.


Operating profit

The operating profit is stated after charging/(crediting):

2023
2022
£000
£000

Exchange differences
213
(195)


6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£000
£000

Fees payable to the Company's auditors for the audit of the Company's financial statements
21
19
Page 19

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees

Staff costs were as follows:


2023
2022
£000
£000

Wages and salaries
870
808

Social security costs
97
99

Cost of defined contribution scheme
62
44

1,029
951


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Sales and administration
14
14


8.


Director's remuneration

2023
2022
£000
£000



Remuneration for qualifying services
240
217

240
217

The highest paid director received remuneration of £211,202 (2022: £191,092).
The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £16,875 (2021: £13,700).
The number of directors with retirement benefits accrued under defined contribution pension scheme is 1 (2022: 1). 
None of the directors received awards under long-term incentive schemes in the current or prior year.

Page 20

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Interest receivable and similar income

2023
2022
£000
£000


Other interest receivable
42
9

42
9


10.


Interest payable and similar expenses

2023
2022
£000
£000


Other loan interest payable
10
40

Other interest payable
21
13

31
53


11.


Taxation


2023
2022
£000
£000

Corporation tax


Current tax on profits for the year
327
686

Adjustments in respect of previous periods
(8)
5


319
691


Total current tax
319
691

Deferred tax

Total deferred tax
-
-


Taxation on profit on ordinary activities
319
691
Page 21

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£000
£000


Profit on ordinary activities before tax
1,088
3,479


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
256
661

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
69
25

Capital allowances for year in excess of depreciation
2
5

Adjustments to tax charge in respect of prior periods
(8)
-

Total tax charge for the year
319
691


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 22

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Tangible fixed assets





Land and buildings leasehold
Motor vehicles
Computer equipment & furniture
Total

£000
£000
£000
£000



Cost or valuation


At 1 January 2023
918
16
1,667
2,601


Additions
-
-
1
1



At 31 December 2023

918
16
1,668
2,602



Depreciation


At 1 January 2023
915
16
1,633
2,564


Charge for the year on owned assets
3
-
15
18



At 31 December 2023

918
16
1,648
2,582



Net book value



At 31 December 2023
-
-
20
20



At 31 December 2022
3
-
34
37

Page 23

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Fixed asset investments





Investments in associates

£000



Cost or valuation


At 1 January 2023
30



At 31 December 2023

30



Impairment


At 1 January 2023
30



At 31 December 2023

30



Net book value



At 31 December 2023
-



At 31 December 2022
-

Page 24

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Stocks

2023
2022
£000
£000

Finished goods and goods for resale
25,374
25,121

25,374
25,121


The carrying value of stocks are stated net of impairment losses totalling £2,038,544 (2022 - £2,332,000). Impairment (credits)/ losses totalling £(293,456) (2022 - £nil) were recognised in the profit and loss account.


15.


Debtors

2023
2022
£000
£000


Trade debtors
1,367
920

Other debtors
136
117

Prepayments and accrued income
419
404

1,922
1,441



16.


Cash and cash equivalents

2023
2022
£000
£000

Cash at bank and in hand
1,503
3,957

1,503
3,957


Page 25

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Creditors: Amounts falling due within one year

2023
2022
£000
£000

Bank loans
-
500

Trade creditors
2,322
3,983

Corporation tax
417
756

Other taxation and social security
95
82

Other creditors
353
392

Accruals and deferred income
307
287

3,494
6,000



18.


Financial instruments

2023
2022
£000
£000

Financial assets


Financial assets measured at fair value through profit or loss
1,503
3,957




19.


Retirement benefit schemes

The Company operates a defined contributions pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Company  in an independently administered fund. The pension cost charge represents contributions payable by the Company  to the fund and amounted to £45,053 (2022 - £43,761) . Contributions totalling £nil (2022 - £nil) were payable to the fund at the balance sheet date.

Page 26

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Share capital and Reserves

2023
2022
£000
£000

Ordinary share capital authorised


595,000 Ordinary shares of £1 each
595
595

595
595

Issued and fully paid


252,000 Ordinary shares of £1 each
252
252

252
252

Capital redemption reserve made up of:


252,000 Ordinary shares of £1 each
252
252

5,000 authorised 6.3% cumulative preference shares of £1 each
5
5

257
257

Authorised


5,000 6.3% cumulative preference shares of £1 each
5
5

5
5


21.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£000
£000


Not later than 1 year
415
450

Later than 1 year and not later than 5 years
1,524
1,662

Later than 5 years
1,835
277

3,774
2,389

The lease for the rental of the premises where the company operates from runs to the end of August 2033 with a break clause after five years. 


22.


Related party transactions

At the year-end, a balance of £3,291 (2022: £3,291) was owed by the company to Stephane Custot who controls the company.

Page 27

 
WADDINGTON CUSTOT GALLERIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

23.


Controlling party

Sole control of the company is held by Stephane Custot.

 
Page 28