The directors present the strategic report for the year ended 31 October 2023.
The group continued to trade strongly in revenue streams during 2023. The performance of the group was strong, with turnover increasing significantly by 15% to £63,790,053 (2022: £55,490,315).
The group has felt the impact of global inflation pressures in its distribution and shipping expenses for the year, which has in turn reduced the group 's profit margins. Despite this, the directors were satisfied with the financial performance of the group.
The directors continue to explore opportunities to grow the company organically and by targeting new and developing markets. The future continues to look encouraging with interest in the gallery and its represented artists strengthening both domestically and internationally.
The directors consider the main threats to the successful implementation of the ongoing business plan to be increasing competition from within the gallery sector. The group has worked hard to minimize the potential threat from a possible slow down in certain geographical art markets and fluctuating currency exchange rates.
The trading results for the year ended 31 October 2023 and the group's financial position at the end of the year are shown in the attached financial statements. The profit and loss account for the year shows a pre-tax profit of £7,734,933 (2022 - £8,375,181) and EBITDA of £6,810,579 (2022 - £8,439,751). Current gross profit margin is 22% (2022 - 35%) of turnover.
Administrative expenses excluding depreciation, currency gains/losses, and directors remuneration have decreased by 0.4% to £11,559,246 (2022 - £11,606,438).
The Statement of Financial Position as at 31 October 2023 shows a increase in the group's investment in stock during the year by 23% to £20,029,783 (2022 - £16,333,450).
The group's key financial and other performance indicators during the year were as follows:
| Unit | 2023 | 2022 |
Turnover | £ | 63,790,053 | 55,490,315 |
Profit before taxation | £ | 7,734,933 | 8,375,181 |
Increase/(decrease) in profit before taxation | % | (8) | 12 |
Gross Profit Margin | % | 22 | 35 |
Operating Margin | % | 11 | 15 |
Given the straightforward and individual nature of the business, the directors are of the opinion that additional KPI and non-KPI analysis is not required to achieve an understanding of the development, performance and position of the business. Rather, the directors and management consider turnover, gross profit, operating profit and cash flow as being sufficient indicators as to the true underlying performance and asset position of the group.
The Board is focused on the long term success of the group and makes decisions to deliver long-term security and commercial performance. The Board considers and balances the needs of its employees, customers and other business contacts. All key decisions are scrutinised by the Board and assessed on the balance of risk, reward and overall strategy in line with the code of corporate governance.
We recognize the importance of the employees providing the service to our customers and are engaged and invested in their continual health and well-being. The group values diversity and opportunity for our employees and aims to provide a platform for them to flourish within the group.
The group's policy is to consult and discuss with employees, through staff meetings, matters likely to affect employees' interests. Within the individual companies, there are regular briefing sessions with employees and also information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Business relationships
The Group has been built on solid relationships with its customers and professional advisers. Our customers are at the heart of everything we do. We use email and social platforms to update them about new offers and services and regularly review and feedback we receive to understand how we can improve their experience. The group provides a fair service with no hidden costs or restrictive terms for customers.
We are reliant on external suppliers for a number of key specialist services such as legal, public relations and advisory. The group believes in fair treatment of suppliers who are all paid within standard terms.
Community and environment
The Group seeks to be as efficient and environmentally friendly as it can be, with regular reviews of how this can be improved.
The Group contributes to charities and other worthy bodies who provide support in the local community. Separately, members of the Board dedicate their time and resources to good causes and employees are encouraged and supported to do the same.
Business conduct
The Group has been built on its impeccable conduct and high business standards. The Board recognise the value in maintaining these vales and the reputation which has been built on them. All employees and Board members are expected to adhere to these standards which are regularly communicated throughout the group.
Communication, monitoring and review are key to the group maintaining the high ethical standards and conduct expected. Risks to the business are continually monitored and communicated within the group to promote high business standards.
Interaction between members
The Board acts in the best interests of all of its members, ensuring a consistent and impartial approach is taken, aiming for a fair outcome for all. The Board is committed to clear and frequent communications with its members.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 October 2023.
The results for the year are set out on page 10.
Ordinary interim dividends were paid amounting to £400,000. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Standard form contracts are provided for commercial use and to assist the commercial function to negotiate within approved parameters.
The group is funded through its intercompany balances. Regular cash flow forecasts are performed for the group in order to ensure sufficient cash is available from trading to cover future expenses and capital expenditures.
The directors actively consider other sources of funding to ensure that the group has sufficient funds available for its operations.
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
A number of the entities included in these consolidated financial statements use a functional currency that is different from the presentational currency of the group, which exposes group to fluctuations in foreign exchange rates. To mitigate this risk, the group aims to minimise transactions and holdings of non-functional currencies at companies around the group, unless there are specific reasons.
Investments of cash surpluses and borrowings instruments are made through banks which must fulfil credit rating criteria approved by the Board. All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Refer to note 27.
The directors continue to explore opportunities to grow the group organically and by targeting new and developing markets. The future continues to look encouraging with interest in the gallery and its represented artists strengthening both domestically and internationally.
There was a change in auditor during the period with Gravita Audit II Limited being appointed as auditor following the resignation of Gravita Audit Limited on 11 February 2025. In accordance with section 485 of the Companies Act 2006, a resolution proposing that Gravita Audit II Limited be re-appointed will be put at a General Meeting.
In the year we took the following energy efficiency actions:
| 2023 | 2022 (Revised) |
UK energy use (1) kWh | 159,559 | 182,382 |
Associated Greenhouse gas emission (2) Tonnes C02 equivalent | 31,323 | 34,133 |
Intensity ratio Emission per employee | 540 | 599 |
UK energy use covers gas purchased and electricity across VMG and GVM offices/sites.
Total kilowatt hours used from gas and electricity bills x Emission Factor used to calculate the Associated Greenhouse gas emission (2) Tonnes C02 equivalent.
Associated Greenhouse gases have been calculated using the Greenhouse gas conversion file provided on the GOV.UK website.
The conversion rate used is for UK electricity - Total kg CO2e per unit - 0.207074, Natural gas kWh (Gross CV) - 0.18256.
The intensity ratio is based on 58 employees working at VMG (source - Bamboo HR People files).
The figures for 2022 have been revised due to an error in the conversion process, where units were inadvertently converted to kilowatt-hours (kWh) twice. This year, we have conducted a thorough review of our calculations and identified these discrepancies. Moving forward, we have utilized the kWh values directly from the bills, eliminating any conversion issues that contributed to the previous inaccuracies.
Energy efficiency action taken in 2023 includes turning lights off when gallery is closed, using eco friendly appliances and setting the heating on a timer basis.
Workings | 2023 | 2022 (Revised) |
Gas | 70,060 | 104,754 |
Electric | 89,498 | 77,628 |
Total | 159,559 | 182,382 |
We have audited the financial statements of Victoria Miro Gallery Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2023 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
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.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with
governance of the entity and management.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including
fraud and non-compliance with laws and regulations, was as follows:
the senior statutory auditor ensured the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the creative industry.
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental, health and safety legislation and anti-money laundering regulations.
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
we assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 2 of the financial statements were indicative of potential bias;
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures
which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims;
reviewing correspondence with the company’s legal advisor.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of noncompliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £382,704 (2022 - £1,750,279 profit).
Victoria Miro Gallery Group Limited is a private company limited by shares domiciled and incorporated in England and Wales. The registered office changes during the year from 5-7 Cranwood Street, London, EC1V 9EE to 2 Leman Street, London, United Kingdom, E1W 9US on 4 April 2024.
The principal activity of the company continued to be that of a holding company with the principal activity of the group being that of the operation of galleries.
The group consists of Victoria Miro Gallery Group Limited and its subsidiaries Victoria Miro Gallery Limited, Galleria Victoria Miro SRL and Victoria Miro New York LLC (together know as "the group"). The financial statements of the group may be obtained from Victoria Miro Gallery Group Limited's registered office at 2 Leman Street, London, United Kingdom, E1W 9US.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 except for disclosure of turnover analysed by geographical market as required by Companies Act 2006 under SI 2008/410,1Sch 68 (1-5) unless this is seriously prejudicial to the interests of the group.
The preparation of financial statements in compliance with FRS 102 requires the Group management to exercise judgement in applying the Group's accounting policies (see note 2).
The parent 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 individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position are presented in Sterling (£). Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Victoria Miro Gallery Group Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 October 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods and full receipt of payments from customers), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research and development expenditure are written off against profits in the year in which it is incurred.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group and company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the group and company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions and balances
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Gains and losses arising on translation are included in the income statement for the period.
However, in the consolidated financial statements exchange differences arising on monetary items that form part of the net investment in a foreign operation are recognised in other comprehensive income and are not reclassified to profit or loss.
Translation of group companies
On consolidation, the results of overseas operations are translated into pounds 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.
In the application of the group’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 preparing overall financial statements, the directors have made the following judgements and estimates:
Determining whether there are indicators of impairment of the group's fixed asset investments and tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
In determining whether there are indicators of impairment in the amounts owed by other debtors to the company, factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
Determining whether leases entered into by the group either as a lessor or a lessee are operating lease or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
Determining the valuation of stock as in the artwork industry, interest on an artist or artwork can change overnight, therefore creation of a provision for an artwork may not simply be determined based on the movement of the artwork. Although in the interest of prudence, the movement of stock is still considered in creating provisions, the perceived popularity of an artist and demand of their artwork also forms a significant basis of in determining this.
Determining when revenue is recognised involves management's estimation of the point in time at which the risks and rewards of the artwork is completely transferred to the customer.
The total turnover of the group for the year has been derived from the subsidiaries principal activity which is from the sales of artworks.
The directors are of the opinion that the disclosure of the geographical turnover of the group would be seriously prejudicial to the group's interest. Such disclosure has therefore been omitted.
This amount relates to the gain on the sale of the Vortic online platform asset to Vortic Limited which was included in the sale of Vortic VR Limited, the group's subsidiary, to Vortic Limited. This transaction is considered an exceptional item as it falls outside the group's normal course of business.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
In January 2023, the group incorporated a subsidiary called Vortic VR Limited. On 21 February 2023, the group sold its intellectual property in an e-platform asset to Vortic VR Limited for £5.7m worth of equity shares in Vortic VR Limited. Also On 21 February 2023, the group also purchased 877 shares in Vortic Limited for a consideration of £7,132,193 consisting which was settled via a debt for equity swap with Vortic Limited for a loan totaling £1.4m as well as the sale of the group's entire shareholding in Vortic VR Limited to Vortic Limited.
Details of the group's subsidiaries at 31 October 2023 are as follows:
Registered office addresses:
Stock is stated net of provisions of £4,032,945 (2022 - £4,088,904).
Amounts owed by group undertakings are unsecured, interest free, and receivable on demand.
Other debtors falling due within one year is stated net of an allowance of £344,185 (2022 - £344,185) The allowance includes provisions against related party loans as described in note 26.
The balance in other debtors receivable falling due after more than one year include the outstanding balance of £271,075 (2022 - £1,957) which represents the present principal sum of £750,000 (2022 - £254,810) less a provision of £478,925 (2022 - £252,853) loaned to Alexandra Miro Limited, a company controlled by a family member of the director of the company. The terms of the contractual loan is interest free and unsecured. As at the year end, this loan was repayable over 10 equal instalments ending in October 2032.
The directors consider that the carrying amount of trade creditors approximates to their fair value.
In respect of the company balances, amounts owed to group undertakings are unsecured, interest free, and repayable on demand.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Ordinary A shares rank pari passu to Ordinary B shares. Both shares have attached to them full voting, dividend and capital distribution rights.
During FY2023, His Majesty's Revenue & Customs (HMRC) raised an enquiry regarding the R&D claim made by the group for the financial year ending 31 October 2021 thereby creating a contingent liability for the group at the reporting date to reimburse a portion or the entirety of the balance received.
Subsequent to the year end, HMRC raised another enquiry regarding the R&D claim made by the group for the financial year ending 31 October 2022 thereby creating a contingent liability for the group to reimburse a portion or the entirety of the balance received as at the date of approval of these financial statements but not at the reporting date.
In response, the group has proactively sought professional advice, filed an appeal for both years, disclaimed the liabilities, and is actively defending against the action. At the date of approval of the financial statements, the case is still with HMRC's Solicitor's Office and Legal Services (SOLS) team for an independent review. The directors of group, following professional advice, have assessed that it is probable that the judgment in the case will be in the group's favour and have therefore not recognised a provision in these accounts in relation to the FY2021 enquiry. The potential undiscounted amount of the further payments that the group could be required to make, if there was an adverse decision, is estimated to be approximately £266,825 for FY2021 and £363,485 for FY2022. Interest continues to accrue daily until a final judgement is reached.
Called-up share capital – represents the nominal value of shares that have been issued.
Profit and loss account – includes all current and prior period retained profits and losses as well as translation differences arising from the translation of financial statements of the Group’s foreign entities into Sterling (£).
There is an outstanding fixed and floating charge created in July 2013 over the assets of the company's subsidiary, Victoria Miro Gallery Limited, in favour of the directors of the company and group.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Except for the matter disclosed in the contingent liability note, the directors have assessed and have concluded that there are no other significant adjusting or non-adjusting events between the 31 October 2023 reporting date and the date of authorisation of these financial statements to disclose.
The remuneration of key management personnel is as follows.
The following amounts were outstanding at the reporting end date:
Directors' loan balances and other transactions are disclosed in note 29.
At the year end, the group was owed £81,231 (2022 - £66,081) by O Miro, a key management personnel of the group.
At the year end, the group was owed £96,688 (2022 - £93,392) by Hydrachem Limited, a company under control by W P Miro.
At the year end, the group was owed £1,287,332 (2022 - £1,029,820) by Hydrachem Group Limited, a company under control by W P Miro.
At the year end, the group had recharges to be invoiced of £41,964 (2022 - £14,324) Hydrachem DST Limited, a company under control by W P Miro.
Throughout the year, an artwork was sold to Deborah Bass, the spouse of Oliver Miro, for £15,000, with the transaction executed at arm's length.
At the year end, the group was owed £750,000 (2022 - £254,810) by Alexandra Miro Limited, a company under control by a family member of the director of the company. The financial statements include a provision of £478,925 (2022 - 252,853) against this balance which was recognised as an expense in the year.
At the year end, the group was owed £203,495 (2022 - £1,184,319) by Vortic Limited, a company under control by a family member of the director of the company. The financial statements include a provision of £124,079 (2022 - £124,079) against this balance was maintained in the year.
During the year, the group acted as an agent of a related party and sold two artworks, earning £39,644 in profits.
The group has taken advantage of the exemption provided by FRS 102 Section 33.1A 'Related Party Disclosures' not to disclose transactions entered into between two or more members of the group, where the subsidiaries the company has transacted with are wholly owned members of the group.
Dividends totalling £400,000 (2022 - £1,766,063) were paid in the year in respect of shares held by only one of the company's directors.
Rent paid during the year includes the sum of £430,000 (2022 - £430,000) paid in respect of the gallery jointly owned by V M Miro and W P Miro.
During the year G S Wright was sold an artwork for £304,932 (2022 - £nil), which was at arm's length price.
There were no directors' loans due to the company and group.
At the year end, the group owed £1.76 (2022 - £1.76) to V M Miro and W P Miro, directors of the group and company.
At the year end, the group owed the amounts as tabulated below to both V M Miro and W P Miro and G S Wright, directors of the company and group.
The interest rate charged to all the directors' loans 2.00% from 1 November 2022 to 5 April 2023 and 2.25% from 6 April 2023 to 31 October 2023. The weighted average rate is for the financial year 2.13%. The balances as of the reporting date were settled within nine months following the year-end of December 31, 2023.