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Registered number: 12098668










COLNAGHI HOLDING LTD










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
COLNAGHI HOLDING LTD
 
 
COMPANY INFORMATION


Directors
J Coll Canellas 
G Richardson 
C Corvi 




Registered number
12098668



Registered office
26 Bury Street

London

SW1Y 6AL




Independent auditors
Sumer Auditco Limited
Chartered Accountants & Statutory Auditors

14th Floor

33 Cavendish Square

London

W1G 0PW





 
COLNAGHI HOLDING LTD
 

CONTENTS



Page
Group Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 9
Consolidated Statement of Comprehensive Income
10
Consolidated Balance Sheet
11 - 12
Company Balance Sheet
13
Consolidated Statement of Changes in Equity
14
Company Statement of Changes in Equity
15
Consolidated Statement of Cash Flows
16 - 17
Consolidated Analysis of Net Debt
18
Notes to the Financial Statements
19 - 44


 
COLNAGHI HOLDING LTD
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present the strategic report for the group together with the audited financial statements for the year ended 31 December 2023.

Business review
 
In 2023 the Group had a turnover of £ 27.5 million (2022: £25.9 million) with a gross profit of £4.8 million (2022: £3.2 million) and a net loss of £0.9 million (2022: net loss of £3.3 million). The Group incorporated Colnaghi Insurance Brokers France, a 100% owned subsidiary undertaking registered in France.
Regarding its core activity as art dealer, there was a significant growth compared to 2022 in both turnover, and profit margin. Operating expenses decreased mostly due to the absence of the non-recurring administrative expenses which affected 2022 and the business went back to a positive EBITDA.
Both the partnership with Factum (art digitalisation) and the insurance broker business arrived to breakeven in their first full year, with the latter receiving FCA qualification. 
All these elements led to a much lower loss compared to 2022. We would expect in next year the Group to start generating profits again, as we have already secured some good income prospects for the following years.

Principal risks and uncertainties
 
Revenue streams are diversified across multiple currencies, exposing the Company to fluctuations in exchange rates. Recognising the significance of the exposure, the Company took proactive measures in 2023 by restructuring liabilities to mitigate the FX risk.
Future developments
After some difficult years, 2023 was a first step in the right direction and 2024 outlook will see the Group's return to profitability.
In the last part of 2023, the Group has also completed its transformation, completing its commercial team hires, which is expected to bring its first results in 2024.

Financial key performance indicators
 
2023
2022
Variance
%
Turnover


£27,523,565

£25,919,609
 
+6.2%
 
Gross profit


£4,831,553

£3,232,797
 
+49.5%
 
Gross profit margin


17.6%

12.5%
 
+5.1%
 

Page 1

 
COLNAGHI HOLDING LTD
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


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





J Coll Canellas
Director

Date: 30 September 2024

Page 2

 
COLNAGHI HOLDING LTD
 
 
 
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 Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.

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


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

make judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Principal activity

The principal activity of the Company in the period under review was that of a management and holding company. The Group's principal activity in the same period was that of the sale of artwork and the ownership of the Colnaghi art library and archive. 
A subsidiary undertaking of the group became FCA registered in September 2023. It acts as an insurance broker and also as an introducer for insurance brokers.

Results and dividends

The loss for the year, after taxation and minority interests, amounted to £911,603 (2022 - loss £3,404,839).

No dividend was paid by the Group during the year and in the prior year.

Directors

The Directors who served during the year were:

J Coll Canellas 
K Whitley (resigned 4 May 2023)
E Luerti (resigned 21 June 2024)
G Richardson (appointed 14 February 2023)

C Corvi was appointed as a director on 21 June 2024.

Page 3

 
COLNAGHI HOLDING LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Matters covered in the Group Strategic Report

Management's review of developments and future prospects and principal risks and uncertainties are included in the Strategic Report.

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 and the Group'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 and the Group's auditors are aware of that information.

Auditors

The auditorsSumer Auditco Limitedwill 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.
 






J Coll Canellas
Director

Date: 30 September 2024

Page 4

 
COLNAGHI HOLDING LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF COLNAGHI HOLDING LTD
 

Opinion


We have audited the financial statements of Colnaghi Holding Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company 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 Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's loss 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 Group 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 Group's or the 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.


Page 5

 
COLNAGHI HOLDING LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF COLNAGHI HOLDING LTD (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 Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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.


Page 6

 
COLNAGHI HOLDING LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF COLNAGHI HOLDING LTD (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
COLNAGHI HOLDING LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF COLNAGHI HOLDING LTD (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 Group 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:

In order to identify and assess the risks of material misstatements, including fraud and non-compliance with laws and regulations that could be expected to have a material impact on the financial statements, we have considered:
•        the results of our enquiries of management and those charged with governance of their assessment of the
         risks of fraud and irregularities;
•        the nature of the Group, including its management structure and control systems (including the 
         opportunity for management to override such controls);
•        management’s incentives and opportunities for fraudulent manipulation of the financial statements
         including the Group’s remuneration and bonus policies and performance targets; and
•        the industry and environment in which it operates.
We also considered UK tax and pension legislation and laws and regulations relating to employment and the preparation and presentation of the financial statements such as the Companies Act 2006.
Based on this understanding we identified the following matters as being of significance to the entity:
•        laws and regulations considered to have a direct effect on the financial statements including UK financial
         reporting standards, Company Law, tax and pension legislation, distributable profits legislation, and
         Financial Conduct Authority ("FCA") rules;
•        the timing of the recognition of commercial income;
•        management bias in selecting accounting policies and determining estimates;
•        recoverability of debtors; and
•        the requirement to impair its stocks and the amount of any such impairment.
We communicated the outcomes of these discussions and enquiries, as well as consideration as to where and how fraud may occur in the entity, to all engagement team members.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised:
•       enquiries of management and those charged with governance as to whether the entity complies with such
         laws and regulations;
•       enquiries with the same concerning any actual or potential litigation or claims;
•       discussion with the same regarding any known or suspected instances of non-compliance with laws and
        regulation and fraud;
•       assessment of matters reported to management and the result of the subsequent investigation;
•       obtaining an understanding of the relevant controls during the year;
•       obtaining an understanding of the policies and controls over the recognition of income and testing their
        implementation during the year;
•       review documentation relating to compliance with the regulations relating to health and safety including
 
Page 8

 
COLNAGHI HOLDING LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF COLNAGHI HOLDING LTD (CONTINUED)


        health and safety certificates; and fire assessment reports;  and the correspondence with the Financial
        Conduct Authority ("FCA");
•       challenging assumptions made by management in their specific accounting policies and estimates, in
        particular the valuation of intangible assets and heritage assets; and the carrying value of stock;
•       identifying and testing journal entries, in particular any journal entries posted with unusual account
        combinations or crediting revenue;
•       assessing the recovery of debtors in the year since the balance sheet date and challenging assumptions
        made by management regarding the recovery of balances which remain outstanding;
•       reviewing the financial statements for compliance with the relevant disclosure requirements;
•       performing analytical procedures to identify any unusual or unexpected relationships or unexpected
        movements in account balances which may be indicative of fraud;
•       reviewing the correspondence with HMRC; and
•       evaluating the underlying business reasons for any unusual transactions.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).


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.





Shilen Manek ACA FCCA (Senior Statutory Auditor)
  
for and on behalf of
Sumer Auditco Limited
 
Chartered Accountants
Statutory Auditors
  
14th Floor
33 Cavendish Square
London
W1G 0PW

30 September 2024
Page 9

 
COLNAGHI HOLDING LTD
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
27,523,565
25,919,609

Cost of sales
  
(22,692,012)
(22,686,812)

Gross profit
  
4,831,553
3,232,797

Administrative expenses
  
(4,485,167)
(5,824,160)

Operating profit/(loss)
 5 
346,386
(2,591,363)

Interest receivable and similar income
 9 
8,126
8,091

Interest payable and similar expenses
 10 
(1,242,134)
(762,077)

Loss before taxation
  
(887,622)
(3,345,349)

Tax on loss
 11 
(15,392)
(2,595)

Loss for the financial year
  
(903,014)
(3,347,944)

  

Foreign exchange differences
  
21,897
(2,429)

Other comprehensive income for the year
  
21,897
(2,429)

Total comprehensive income for the year
  
(881,117)
(3,350,373)

(Loss) for the year attributable to:
  

Non-controlling interests
  
8,589
56,895

Owners of the parent Company
  
(911,603)
(3,404,839)

  
(903,014)
(3,347,944)

Total comprehensive income for the year attributable to:
  

Non-controlling interest
  
8,589
56,895

Owners of the parent Company
  
(889,706)
(3,407,268)

  
(881,117)
(3,350,373)

The notes on pages 19 to 44 form part of these financial statements.

Page 10

 
COLNAGHI HOLDING LTD
REGISTERED NUMBER: 12098668

CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
3,422,466
4,000,436

Tangible assets
 13 
2,147,034
2,228,899

Investments
 14 
1
426

  
5,569,501
6,229,761

Current assets
  

Stocks
 15 
10,202,656
10,134,884

Debtors: amounts falling due within one year
 16 
1,267,853
3,656,305

Cash at bank and in hand
 17 
2,045,536
2,152,541

  
13,516,045
15,943,730

Creditors: amounts falling due within one year
 18 
(2,756,358)
(17,448,373)

Net current assets/(liabilities)
  
 
 
10,759,687
 
 
(1,504,643)

Total assets less current liabilities
  
16,329,188
4,725,118

Creditors: amounts falling due after more than one year
 19 
(15,780,402)
(3,264,722)

Provisions for liabilities
  

Deferred taxation
 21 
(27,237)
(17,730)

  
 
 
(27,237)
 
 
(17,730)

Net assets
  
521,549
1,442,666


Capital and reserves
  

Called up share capital 
 22 
7,000,000
7,000,000

Foreign exchange reserve
 23 
56,332
34,435

Profit and loss account
 23 
(6,546,347)
(5,634,744)

Equity attributable to owners of the parent Company
  
509,985
1,399,691

Non-controlling interests
  
11,564
42,975

  
521,549
1,442,666


Page 11

 
COLNAGHI HOLDING LTD
REGISTERED NUMBER: 12098668
    
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 September 2024.


J Coll Canellas
Director

The notes on pages 19 to 44 form part of these financial statements.

Page 12

 
COLNAGHI HOLDING LTD
REGISTERED NUMBER: 12098668

COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
3,127,260
3,655,336

Tangible assets
 13 
965
1,516

Investments
 14 
4,529,803
4,530,228

  
7,658,028
8,187,080

Current assets
  

Debtors: amounts falling due within one year
 16 
9,547,833
4,804,899

Cash at bank and in hand
 17 
288
7,156

  
9,548,121
4,812,055

Creditors: amounts falling due within one year
 18 
(302,983)
(7,433,830)

Net current assets/(liabilities)
  
 
 
9,245,138
 
 
(2,621,775)

Total assets less current liabilities
  
16,903,166
5,565,305

  

Creditors: amounts falling due after more than one year
  
(15,780,402)
(3,264,722)

  

Net assets
  
1,122,764
2,300,583


Capital and reserves
  

Called up share capital 
 22 
7,000,000
7,000,000

Profit and loss account
 23 
(5,877,236)
(4,699,417)

  
1,122,764
2,300,583


The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own profit and loss account in these financial statements. The loss after tax of the parent company for the period was £1,177,819 (2022: £2,507,179).
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 September 2024.



J Coll Canellas
Director

The notes on pages 19 to 44 form part of these financial statements.

Page 13

 

 
COLNAGHI HOLDING LTD


 

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



Called up share capital
Foreign exchange reserve
Profit and loss account
Equity attributable to owners of parent Company
Non-controlling interests
Total equity


£
£
£
£
£
£



At 1 January 2022
7,000,000
36,864
(2,229,905)
4,806,959
-
4,806,959



Comprehensive loss for the year


Loss for the year
-
-
(3,404,839)
(3,404,839)
56,895
(3,347,944)


Movement on foreign exchange differences for the year
-
(2,429)
-
(2,429)
-
(2,429)


Acquisition of investments
-
-
-
-
80
80



Contributions by and distributions to owners


Dividends paid
-
-
-
-
(14,000)
(14,000)





At 1 January 2023
7,000,000
34,435
(5,634,744)
1,399,691
42,975
1,442,666



Comprehensive loss for the year


Loss for the year
-
-
(911,603)
(911,603)
8,589
(903,014)


Movement on foreign exchange differences for the year
-
21,897
-
21,897
-
21,897



Contributions by and distributions to owners


Dividends paid
-
-
-
-
(40,000)
(40,000)



At 31 December 2023
7,000,000
56,332
(6,546,347)
509,985
11,564
521,549



The notes on pages 19 to 44 form part of these financial statements.

Page 14

 
COLNAGHI HOLDING LTD
 

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


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
7,000,000
(2,192,238)
4,807,762


Comprehensive loss for the year

Loss for the year
-
(2,507,179)
(2,507,179)



At 1 January 2023
7,000,000
(4,699,417)
2,300,583


Comprehensive loss for the year

Loss for the year
-
(1,177,819)
(1,177,819)


At 31 December 2023
7,000,000
(5,877,236)
1,122,764


The notes on pages 19 to 44 form part of these financial statements.

Page 15

 
COLNAGHI HOLDING LTD
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

As restated
2023
2022
£
£

Cash flows from operating activities

Loss for the financial year
(903,014)
(3,347,944)

Adjustments for:

Amortisation of intangible assets
577,970
577,775

Depreciation of tangible assets
111,834
105,226

Loss on disposal of tangible assets
825
-

Share based payment
778
-

Interest paid
1,242,134
762,077

Interest received
(8,126)
(8,091)

Taxation charge
15,392
2,595

(Increase) in stocks
(67,772)
(4,969,553)

Decrease in debtors
2,376,323
1,468,687

(Decrease) in creditors
(2,437,949)
(1,606,696)

Corporation tax (paid)
(27,553)
(5,782)

Foreign exchange
95,143
(26,335)

Net cash generated from operating activities

975,985
(7,048,041)


Cash flows from investing activities

Purchase of intangible fixed assets
-
(2,808)

Purchase of tangible fixed assets
(32,701)
(34,367)

Sale of tangible fixed assets
705
-

Purchase of unlisted and other investments
-
(425)

Interest received
8,126
8,091

Net cash from investing activities

(23,870)
(29,509)

Cash flows from financing activities

New secured loans
6,800,000
983,414

Repayment of loans
(6,954,960)
-

Other new loans
-
7,962,909

Repayment of other loans
(461,037)
-

Interest paid
(344,965)
(180,716)

Dividends paid to non-controlling interests
(40,000)
(14,000)

Net cash used in financing activities
(1,000,962)
8,751,607

Net (decrease)/increase in cash and cash equivalents
(48,847)
1,674,057

Cash and cash equivalents at beginning of year
2,152,530
454,207
Page 16

 
COLNAGHI HOLDING LTD
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

As restated

2023
2022

£
£


Foreign exchange gains and losses
(60,245)
24,266

Cash and cash equivalents at the end of year
2,043,438
2,152,530


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,045,536
2,152,541

Bank overdrafts
(2,098)
(11)

2,043,438
2,152,530


The notes on pages 19 to 44 form part of these financial statements.

Page 17

 
COLNAGHI HOLDING LTD
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023





At 1 January 2023
Cash flows
Other non-cash changes
At 31 December 2023
£

£

£

£

Cash at bank and in hand

2,152,541

(46,760)

(60,245)

2,045,536

Bank overdrafts

(11)

(2,087)

-

(2,098)

Debt due after 1 year

(3,264,722)

(7,236,132)

(5,279,548)

(15,780,402)

Debt due within 1 year

(12,234,508)

6,954,960

5,279,548

-


(13,346,700)
(330,019)
(60,245)
(13,736,964)

The notes on pages 19 to 44 form part of these financial statements.

Page 18

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Colnaghi Holding Ltd is a private company limited by shares, and is incorporated in England and Wales. The address of its registered office is 26 Bury Street, London, England, SW1Y 6AL.

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 Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In preparing the separate financial statements of the parent company, advantage has been taken of the disclosure exemptions available in FRS 102 whereby no Statement of Cash Flows has been presented for the parent company.

Page 19

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Foreign currency translation

The Group's presentational currency is GBP. The functional currency of group undertakings in the United Kingdom is GBP while the functional currencies of group companies in the USA and Spain are USD and Euro respectively.
The parent company's presentational currency and functional currency are GBP.
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.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated 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'.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue 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.
Sale of artwork on a consignment basis
The Group acts as a principal over the sale of artwork on a consignment basis. Sale on such basis is recognised when a final agreement has been made between both the Group and the buyer of the item. The sale agreement or invoice date would be the recognition point of sales.
Sale of artwork as inventory
Revenue generated from the sale of artwork from the inventory owned by the Group is recognised when the significant risks and rewards of ownership have been transferred to the customer. This is normally the sale agreement date.
Sale of artwork as an intermediary
The Group recognises a commission income on the sale of artwork as an intermediary upon a sale agreement has been made between both the seller and the buyer of the item.
 
Page 20

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.4
Revenue (continued)

Insurance brokerage and introduction commission
Brokerage commission is recognised as revenue on the effective commencement or renewal dates of the related policies.
Introducer commission and other income is recognised to the extent that the company has obtained the right to consideration through its performance, this is typically when new business has placed or renewals have been negotiated.

 
2.5

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.6

Interest income

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

 
2.7

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.

 
2.8

Borrowing costs

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

 
2.9

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.

Page 21

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

 
2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. 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 balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 22

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.12

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.13

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.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Leasehold improvements
-
Over the term of the lease
Fixtures and fittings
-
25% reducing balance and 20% straight-line
Office equipment
-
20% straight-line
Computer equipment
-
33% straight-line

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 value and are recognised in profit or loss.
Heritage assets
Art library and archives are considered Heritage assets by management as such by virtue of their principal purpose of the contribution of art knowledge and culture to the public. These assets 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.
All heritage assets were acquired by a group company for a consideration. The assets are kept at
Page 23

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.13
Tangible fixed assets (continued)

premises owned by its fellow group company and another owned by the National Trust with an adequate insurance policy in place to protect against damages to the assets. The archives are currently made available to the general public for their viewing. Management maintains a record of the library and archive items showing their descriptions and the periods they cover. 
On the basis of the above, management have adopted a prudent approach to the measurement of the assets' valuation, and consider an estimated useful life of 50 years is appropriate and they have estimated the depreciation charge on this basis.
At each reporting date management assesses whether there is any indication of impairment. Such assessment is based on the asset's ability to add value to the selling process of artwork items by the group companies.  If such indication exists, the carrying value 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 value exceeds its recoverable value.

 
2.14

Valuation of investments

Investments in subsidiaries and other investments are measured at cost less accumulated impairment.

 
2.15

Stocks

Artwork inventory is stated at the lower of cost and net realisable value, being the estimated selling price less purchase costs and selling costs. Cost is based on the cost of purchase on an individual item basis.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less selling costs. The impairment loss is recognised immediately in profit or loss.

 
2.16

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.

Page 24

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.17

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.
In the Consolidated 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 Group's cash management.
A group subsidiary holds monies on behalf of clients and insurance underwriters in client monies bank accounts. The monies held in these bank accounts and the balances due to clients and underwriters are netted off and excluded from these financial statements. The total amounts of monies held in these accounts by the subsidiary as at 31 December 2023 was £Nil (2022: £Nil). The subsidiary also nets off and excludes from these financial statements amounts due from customers which are directly due to underwriters at the balance sheet date.

 
2.18

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.

 
2.19

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

 
2.20

Financial instruments

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

Financial instruments are recognised in the Group's Balance Sheet when the Group becomes party to the contractual provisions of the instrument.

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 Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

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 Group after the deduction of all its liabilities.
Page 25

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.20
Financial instruments (continued)


Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies 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 payments 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.

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 Group 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 Group 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 Group's contractual obligations expire or are discharged or cancelled.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The key estimates and assumptions that have a significant risk of causing material adjustments to the carrying value of assets and liabilities are goodwill and trademark, which has been assessed as per the note 2.12 above and the directors are of the opinion that the carrying value is recoverable.
The impairment of assets including stocks in the financial statements requires Management's estimation and judgements. The assessment process of stock valuation is described in the Stocks accounting policy in note 2.15.
The Group holds title to a short-term leasehold property, and also heritage assets being a library and archive of the history of artwork, the useful lives of which are a key estimate and assumption determined by management. Management's assessment of the carrying value of heritage assets is described in note 2.13 above. 

Page 26

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Inventory
7,512,139
6,315,978

Consigned inventory
15,077,891
18,383,889

Art sales commission
4,367,812
1,067,548

Insurance introduction and brokerage commission
263,130
78,330

Other
302,593
73,864

27,523,565
25,919,609



Analysis of turnover by country of destination:

2023
2022
        £
        £

USA

8,060,738

5,967,466

Europe

16,809,034

11,512,887

United Kingdom

2,649,049

5,934,798

Other

4,744

2,504,458


27,523,565

25,919,609



5.


Operating profit/(loss)

The operating profit is stated after charging:

2023
2022
£
£

Exchange differences
(588,072)
658,682

Operating lease rentals
250,000
249,991

Tangible fixed assets - depreciation
51,989
45,619

Leasehold property - depreciation
59,845
59,607

Intangible fixed assets - amortisation and impairment
577,970
577,775

Page 27

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Auditors' remuneration

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


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
18,250
15,100

Fees payable to the Company's auditors in respect of:

The auditing of accounts of subsidiaries of the Company
24,150
17,150

Taxation compliance services
6,250
5,150

All non-audit services not included above
10,300
13,200


7.


Employees

Staff costs, including Directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
1,361,626
1,266,038
433,457
235,789

Social security costs
166,048
146,432
57,643
28,943

Cost of defined contribution scheme
46,700
36,615
27,500
13,750

1,574,374
1,449,085
518,600
278,482


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



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Directors
3
2
3
2



Administrative and support
8
10
-
-



Sales
5
4
-
-

16
16
3
2

Page 28

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
433,457
323,789

Group contributions to defined contribution pension schemes
27,500
13,750

460,957
337,539


During the year retirement benefits were accruing to 1 Director (2022 - 2) in respect of defined contribution pension schemes.

The highest paid Director received remuneration of £433,457 (2022 - £235,789).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £27,500 (2022 - £13,750).

The Group and the Company have no key management personnel other than the directors.


9.


Interest receivable

2023
2022
£
£


Other interest receivable
8,126
8,091

8,126
8,091


10.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
344,923
180,717

Other loan interest payable
897,169
581,360

Other interest payable
42
-

1,242,134
762,077

Page 29

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the period
3,829
27,553


3,829
27,553

Foreign tax


Foreign tax on income for the period
2,056
-

2,056
-

Total current tax
5,885
27,553

Deferred tax


Origination and reversal of timing differences
9,507
(24,958)

Total deferred tax
9,507
(24,958)


Taxation on profit on ordinary activities
15,392
2,595
Page 30

 
COLNAGHI HOLDING LTD
 
 
 
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 applicable rate of corporation tax in the UK of 23.5% (2022 - 19%). On 1 April 2023, the main rate of corporation tax increased from 19% to 25%, a combination of the two rates over the period is 23.5%. The differences are explained below:

2023
2022
£
£


Loss on ordinary activities before tax
(887,622)
(3,345,349)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
(208,591)
(635,616)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
11,725
9,480

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
13,131
76,801

Capital allowances for year in excess of depreciation
45,545
(25,423)

Utilisation of tax losses
(10,849)
(11,235)

Difference on foreign tax rates
(72,081)
34,170

Unrelieved tax losses carried forward
237,418
554,418

Other differences leading to an increase (decrease) in the tax charge
(906)
-

Total tax charge for the year
15,392
2,595


Factors that may affect future tax charges

The Group has an estimated tax losses of £6,554,421 (2022: £5,438,894) to carry forward against future taxable profits. 

Page 31

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Intangible assets

Group





Trademarks
Goodwill
Total

£
£
£



Cost


At 1 January 2023
5,280,755
498,940
5,779,695



At 31 December 2023

5,280,755
498,940
5,779,695



Amortisation


At 1 January 2023
1,625,419
153,840
1,779,259


Charge for the year on owned assets
528,076
49,894
577,970



At 31 December 2023

2,153,495
203,734
2,357,229



Net book value



At 31 December 2023
3,127,260
295,206
3,422,466



At 31 December 2022
3,655,336
345,100
4,000,436


Trademarks and goodwill are amortised over a useful life of 10 years respectively.


Page 32

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
           12.Intangible assets (continued)

Company




Trademarks

£



Cost


At 1 January 2023
5,280,755



At 31 December 2023

5,280,755



Amortisation


At 1 January 2023
1,625,419


Charge for the year
528,076



At 31 December 2023

2,153,495



Net book value



At 31 December 2023
3,127,260



At 31 December 2022
3,655,336


13.


Tangible fixed assets

Group






Leasehold improvements
Fixtures and fittings
Office & computer equipment
Heritage assets

£
£
£
£



Cost or valuation


At 1 January 2023
696,473
52,723
14,084
1,800,000


Additions
-
26,590
6,111
-


Disposals
-
-
(2,420)
-


Exchange adjustments
(86)
(1,060)
(56)
-



At 31 December 2023

696,387
78,253
17,719
1,800,000



Depreciation


At 1 January 2023
191,271
17,140
5,970
120,000
Page 33

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

           13.Tangible fixed assets (continued)



Charge for the year on owned assets
59,845
11,869
4,120
36,000


Disposals
-
-
(890)
-



At 31 December 2023

251,116
29,009
9,200
156,000



Net book value



At 31 December 2023
445,271
49,244
8,519
1,644,000



At 31 December 2022
505,202
35,583
8,114
1,680,000

Total

£



Cost or valuation


At 1 January 2023
2,563,280


Additions
32,701


Disposals
(2,420)


Exchange adjustments
(1,202)



At 31 December 2023

2,592,359



Depreciation


At 1 January 2023
334,381


Charge for the year on owned assets
111,834


Disposals
(890)



At 31 December 2023

445,325



Net book value



At 31 December 2023
2,147,034



At 31 December 2022
2,228,899

Page 34

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

           13.Tangible fixed assets (continued)


Company






Computer equipment

£

Cost or valuation


At 1 January 2023
1,654



At 31 December 2023

1,654



Depreciation


At 1 January 2023
138


Charge for the year on owned assets
551



At 31 December 2023

689



Net book value



At 31 December 2023
965



At 31 December 2022
1,516






Page 35

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Fixed asset investments

Group





Other fixed asset investment

£



Cost or valuation


At 1 January 2023
377,425


Disposals
(425)



At 31 December 2023

377,000



Impairment


At 1 January 2023
376,999



At 31 December 2023

376,999



Net book value



At 31 December 2023
1



At 31 December 2022
426

Other fixed asset investment is represented by the Group's holding of the full interest in Colnaghi Foundation, a charity registered in England and Wales. The Group has no influence on the management of the Charity.
The historic impairment charge of £376,999 represents an impairment of the investment in the Charity at the balance sheet date as management does not expect the Charity to provide any economic benefits to the Group.  

Page 36

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Company





Investments in subsidiary companies
Other fixed asset investments
Total

£
£
£



Cost or valuation


At 1 January 2023
4,529,802
377,425
4,907,227


Disposals
-
(425)
(425)



At 31 December 2023

4,529,802
377,000
4,906,802



Impairment


At 1 January 2023
-
376,999
376,999



At 31 December 2023

-
376,999
376,999



Net book value



At 31 December 2023
4,529,802
1
4,529,803



At 31 December 2022
4,529,802
426
4,530,228

Page 37

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

Colnaghi UK Ltd
England & Wales
Sale of art work
Ordinary
100%
Colnaghi Library And Archives Ltd
England & Wales
Holding of art library and archives
Ordinary
100%
PND London Ltd
England & Wales
Holding of leased property
Ordinary
100%
Colnaghi Spain Fine Art SL
Spain
Sale of art work
No specific class
100%
Aquila Fine Art Ltd
England & Wales
Sale of art work
Ordinary
70%
Colnaghi Insurance Brokers Ltd (formerly Colnaghi IServices Limited)
England & Wales
Insurance business introducer and broker
Ordinary
100%
Colnaghi Elliott Master Drawings Limited *
England & Wales
Sale of art work
Ordinary
50%
Colnaghi Insurance Brokers France
France
Insurance business introducer and broker
Ordinary
100%

Page 38

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Subsidiary undertakings (continued)

* Colnaghi Elliott Master Drawings Limited is a group subsidiary by virtue of the Group has significant influence over the entity's management. 
On 24 May 2023, the Group incorporated Colnaghi Insurance Brokers France, a company registererd in France and is an indirect subsidiary 100% owned by Colnaghi Insurance Brokers Ltd.
All of the above subsidiaries' results are included in the these consolidated financial statements.


15.


Stocks

Group
Group
2023
2022
£
£

Artwork inventory
10,202,656
10,134,884

10,202,656
10,134,884



16.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
460,688
1,626,701
-
-

Amounts owed by group undertakings
-
-
9,543,175
4,784,784

Other debtors
382,800
733,767
1,048
10,790

Prepayments and accrued income
424,365
1,295,837
3,610
9,325

1,267,853
3,656,305
9,547,833
4,804,899



17.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Cash at bank and in hand
2,045,536
2,152,541
288
7,156

Less: bank overdrafts
(2,098)
(11)
(2,098)
-

2,043,438
2,152,530
(1,810)
7,156


The total amount of client monies held in the bank accounts by a group subsidiary as at 31 December 2023 was £Nil (2022: £Nil).

Page 39

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank overdrafts
2,098
11
2,098
-

Bank loans
-
6,954,960
-
6,954,960

Other loans
-
5,279,548
-
-

Trade creditors
770,454
577,298
-
18,637

Corporation tax
5,897
27,553
-
-

Other taxation and social security
146,424
126,180
97,075
11,845

Other creditors
63,347
200,888
-
-

Accruals and deferred income
1,768,138
4,281,935
203,810
448,388

2,756,358
17,448,373
302,983
7,433,830


Bank loans of £Nil (2022: £6,954,960) are secured on the Company's assets and its intermediated and certificated securities with their attached future rights. The loans carry an interest charge at a rate between 2.5% and 5% per annum and was fully repaid during the year.
Included in Other loans in the prior year was a loan of £5,279,548 which carried an interest charge at a rate of 13.5% per annum. The loan was repayable by 30 June 2023 and unsecured. However, the loan was repaid by a novation to a new loan as shown in note 19. 


19.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Other loans
15,780,402
3,264,722
15,780,402
3,264,722

15,780,402
3,264,722
15,780,402
3,264,722


Included in Other loans is a loan of £Nil (2022: £3,264,722) which carries an interest charge at a rate between 5% + LIBOR and 13.5% per annum. The loan was fully repaid in the year.
Included in Other loans is a loan of £9,865,576 (2022: £Nil) which is secured on the Company's assets and carries an interest charge at a rate of 9% per annum. The loan is repayable by 31 August 2026. 
Also included in Other loans is a loan novated on 23 November 2023 as disclosed in note 18 with a balance of £5,914,826 at the year end date. The loan is secured on the Company's assets and carries an interest charge at a rate of 9% per annum. The loan is repayable by 31 August 2026. 

Page 40

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Loans


Analysis of the maturity of loans is given below:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Amounts falling due within one year

Bank loans
-
6,954,960
-
6,954,960

Other loans
-
5,279,548
-
-


-
12,234,508
-
6,954,960


Amounts falling due 2-5 years

Other loans
15,780,402
3,264,722
15,780,402
3,264,722


15,780,402
3,264,722
15,780,402
3,264,722


15,780,402
15,499,230
15,780,402
10,219,682


Page 41

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Deferred taxation


Group



2023


£






At beginning of year
(17,730)


Charged to profit or loss
(9,507)



At end of period
(27,237)

Company


2023






At end of year
-
Group
Group
2023
2022
£
£

Accelerated capital allowances
(69,782)
(17,730)

Tax losses carried forward
42,360
-

Pension creditor
185
-

(27,237)
(17,730)

The Group had tax losses of £6,554,421 (2022: £5,438,894) in the UK carried forward at the balance sheet date. An estimated deferred tax asset of £1,596,245 (2022: £1,359,724) on these losses based on the UK standard tax rate of 25% (2022: 25%) has not been recognised in these financial statements.


22.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



7,000,000 (2022 - 7,000,000) Ordinary shares of £1.00 each
-
7,000,000
7,000,000 (2022 - Nil) A Ordinary shares of £1.00 each
7,000,000
-

7,000,000

7,000,000

Page 42

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.Share capital (continued)

During the year the company redesignated all of its 'Ordinary shares' to 'A Ordinary shares'. The company's Memorandum of Articles Association has also been amended whereby 'B Ordinary shares' were created in the year.
B Ordinary shares have been issued in the post year end period.  



23.


Reserves

Foreign exchange reserve

Represents the effect of changes in exchange rates arising from translating the financial statements of the subsidiary undertakings into the Group's reporting currency.

Profit and loss account

The profit and loss account consists of accumulated profits and losses.


24.


Share-based payments

The company operates an equity-settled share based remuneration EMI scheme in which only eligible employees can participate. The options are vested over a period of between 0 and 4 years with the only vesting condition being that the individual remains an employee of the company over the vesting period. The options have a maximum exercisable term of 10 years from grant date. 
During the year, 777,777 of these share options were granted (2022: £Nil) at an exercise price of £0.001 each. The exercise price at the grant date was close to the fair value of the valuation of the options as at 31 December 2023. 194,445 (2022: £Nil) options were vested during the year. 


25.


Contingent liabilities

The company has issued a guarantee to the following subsidiaries for all of their outstanding liabilities existing at the balance sheet date of 31 December 2023. The guarantee is issued in accordance with the exemption from the requirements of Companies Act 2006 relating to the audit of individual accounts by virtue of S479A of Companies Act 2006.
 - PND London Ltd
 - Aquila Fine Art Ltd
 - Colnaghi Elliott Master Drawings Limited


26.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £46,700 (2022: £36,615).
Contributions totalling £2,695 (2022: £3,575) were payable to the fund at the balance sheet date and are included in creditors.

Page 43

 
COLNAGHI HOLDING LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

27.


Commitments under operating leases

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


Group
Group
2023
2022
£
£

Not later than 1 year
250,000
250,000

Later than 1 year and not later than 5 years
1,000,000
1,000,000

Later than 5 years
609,589
854,167

1,859,589
2,104,167

28.


Related party transactions

The Company has taken advantage of the exemption available in FRS102 not to disclose transactions entered into between two or more members of a group.
During the year, the Group paid consultancy fees of £169,270 (2022: £120,853) to a connected company by virtue of common substantial shareholding. The Group also paid sales commission of £714,018 (2022: £811,873) to these companies.  
At the balance sheet date, the Group was owed £23,074 (2022: £186,419) by a connected company by virtue of common substantial shareholding. 
During the year the Group made sales of £9,432 (2022: £20,358) to a company connected to a group company by virtue of common substantial shareholding. The Group received supplies of services of £40,000 (2022: £3,559) from the connected company. At the balance sheet date, the Group owed £Nil (2022: £173) to the connected company. 
During the year the Group made purchases of £6,716,059 (2022: made sales of £953,359) from a company in which a company director has substantial shareholding. 
During the year the Group made a donation of £87,068 (2022: £319,813) to a charity in which the Group has a 100% interest. 

 
Page 44