ACCOUNTS - Final Accounts

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

BEN BROWN FINE ART LIMITED - Company Information

Caseware UK (AP4) 2020.0.247 2020.0.247 2020-12-312020-12-31false102020-01-01falseFine art dealers11false 04983119 2020-01-01 2020-12-31 04983119 2019-01-01 2019-12-31 04983119 2020-12-31 04983119 2019-12-31 04983119 2019-01-01 04983119 3 2020-01-01 2020-12-31 04983119 3 2019-01-01 2019-12-31 04983119 5 2020-01-01 2020-12-31 04983119 5 2019-01-01 2019-12-31 04983119 d:CompanySecretary1 2020-01-01 2020-12-31 04983119 d:Director1 2020-01-01 2020-12-31 04983119 d:Director2 2020-01-01 2020-12-31 04983119 d:RegisteredOffice 2020-01-01 2020-12-31 04983119 e:Buildings e:ShortLeaseholdAssets 2020-01-01 2020-12-31 04983119 e:Buildings e:ShortLeaseholdAssets 2020-12-31 04983119 e:Buildings e:ShortLeaseholdAssets 2019-12-31 04983119 e:LandBuildings 2020-12-31 04983119 e:LandBuildings 2019-12-31 04983119 e:FurnitureFittings 2020-01-01 2020-12-31 04983119 e:FurnitureFittings 2020-12-31 04983119 e:FurnitureFittings 2019-12-31 04983119 e:FurnitureFittings e:OwnedOrFreeholdAssets 2020-01-01 2020-12-31 04983119 e:OfficeEquipment 2020-01-01 2020-12-31 04983119 e:OfficeEquipment 2020-12-31 04983119 e:OfficeEquipment 2019-12-31 04983119 e:OfficeEquipment e:OwnedOrFreeholdAssets 2020-01-01 2020-12-31 04983119 e:OwnedOrFreeholdAssets 2020-01-01 2020-12-31 04983119 e:CurrentFinancialInstruments 2020-12-31 04983119 e:CurrentFinancialInstruments 2019-12-31 04983119 e:CurrentFinancialInstruments e:WithinOneYear 2020-12-31 04983119 e:CurrentFinancialInstruments e:WithinOneYear 2019-12-31 04983119 e:ReportableOperatingSegment1 2020-01-01 2020-12-31 04983119 e:ReportableOperatingSegment1 2019-01-01 2019-12-31 04983119 f:UnitedKingdom 2020-01-01 2020-12-31 04983119 f:UnitedKingdom 2019-01-01 2019-12-31 04983119 f:RestEuropeOutsideUK 2020-01-01 2020-12-31 04983119 f:RestEuropeOutsideUK 2019-01-01 2019-12-31 04983119 f:RestWorldOutsideUK 2020-01-01 2020-12-31 04983119 f:RestWorldOutsideUK 2019-01-01 2019-12-31 04983119 e:UKTax 2020-01-01 2020-12-31 04983119 e:UKTax 2019-01-01 2019-12-31 04983119 e:ShareCapital 2020-01-01 2020-12-31 04983119 e:ShareCapital 2020-12-31 04983119 e:ShareCapital 2019-01-01 2019-12-31 04983119 e:ShareCapital 2019-12-31 04983119 e:ShareCapital 2019-01-01 04983119 e:RetainedEarningsAccumulatedLosses 2020-01-01 2020-12-31 04983119 e:RetainedEarningsAccumulatedLosses 2020-12-31 04983119 e:RetainedEarningsAccumulatedLosses 2019-01-01 2019-12-31 04983119 e:RetainedEarningsAccumulatedLosses 2019-12-31 04983119 e:RetainedEarningsAccumulatedLosses 2019-01-01 04983119 e:AcceleratedTaxDepreciationDeferredTax 2020-12-31 04983119 e:AcceleratedTaxDepreciationDeferredTax 2019-12-31 04983119 d:OrdinaryShareClass1 2020-01-01 2020-12-31 04983119 d:OrdinaryShareClass1 2020-12-31 04983119 d:OrdinaryShareClass1 2019-12-31 04983119 d:FRS102 2020-01-01 2020-12-31 04983119 d:Audited 2020-01-01 2020-12-31 04983119 d:FullAccounts 2020-01-01 2020-12-31 04983119 d:PrivateLimitedCompanyLtd 2020-01-01 2020-12-31 04983119 e:WithinOneYear 2020-12-31 04983119 e:WithinOneYear 2019-12-31 04983119 e:BetweenOneFiveYears 2020-12-31 04983119 e:BetweenOneFiveYears 2019-12-31 04983119 e:MoreThanFiveYears 2020-12-31 04983119 e:MoreThanFiveYears 2019-12-31 04983119 2 2020-01-01 2020-12-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 04983119

BEN BROWN FINE ART LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

BEN BROWN FINE ART LIMITED

COMPANY INFORMATION

Directors	B Brown
	C Baer


Company secretary	L Guinness


Registered number	04983119


Registered office	89 Spa Road
	London
	SE16 3SG


Independent auditors	Greenback Alan LLP
	Chartered Accountants
	89 Spa Road
	London
	SE16 3SG

BEN BROWN FINE ART LIMITED

CONTENTS

	Page
Strategic report	1
Directors' report	2 - 3
Independent auditors' report	4 - 7
Statement of comprehensive income	8
Statement of financial position	9
Statement of changes in equity	10 - 11
Statement of cash flows	12
Analysis of net debt	13
Notes to the financial statements	14 - 28

BEN BROWN FINE ART LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

Introduction

The directors present their strategic report on the Company for the year ended 31 December 2020. The strategic report is consistent with the size and nature of the business and is written in the context of the risks and uncertainties the Company faces.

Business review

The principal activity of the company is that of art dealers.
The results for the year are disclosed in the Statement of Comprehensive Income on page 8. Despite the difficulties associated with the Covid pandemic, the company preformed well with turnover increasing 3.7% to £12,944,457 (2019: £12,478,917).
Art fairs worldwide were cancelled due to Covid from March 2020. The gallery has resumed attending art fairs in 2021 and we expect operations to return to normal in 2022.
The gallery's main focus during the Covid pandemic was of course the health of the staff. Therefore the gallery was closed immediately after the recommendation of the Government. With the possibility to work from home we managed to get the gallery team safely through this crisis.
We remained in contact with our artists and customers during the Covid pandemic.

Principal risks and uncertainties

The company is exposed to movement in foreign exchange rates as a result of transcations with both customers and suppliers. The company manages these risks by maintaining foreign currency bank accounts.
The company is also exposed to fluctuations in the value of art it holds as stock.

Financial key performance indicators

The directors consider the key performance indicators of the company to be turnover, gross profit, profit for the year and net assets. These are disclosed within the financial statements.

Other key performance indicators

Other indicators include the number of active customers and retention of key staff.

This report was approved by the board on 29 October 2021 and signed on its behalf.

B Brown

Director

Page 1

BEN BROWN FINE ART LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

The directors present their report and the financial statements for the year ended 31 December 2020.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

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

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

∙make judgments and accounting estimates that are reasonable and prudent;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation, amounted to £61,169 (2019 - profit £33,864).

The directors do not recommend the payment od a dividend for the year.

Directors

The directors who served during the year were:

B Brown

C Baer

Future developments

The future developments have been covered in the Startegic Report.

Page 2

BEN BROWN FINE ART LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

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

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditors, Greenback Alan LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 29 October 2021 and signed on its behalf.

B Brown

Director

Page 3

BEN BROWN FINE ART LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEN BROWN FINE ART LIMITED

Opinion

We have audited the financial statements of Ben Brown Fine Art Limited (the 'Company') for the year ended 31 December 2020, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

∙give a true and fair view of the state of the Company's affairs as at 31 December 2020 and of its 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 Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Page 4

BEN BROWN FINE ART LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEN BROWN FINE ART LIMITED (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

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

∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

∙the financial statements are not in agreement with the accounting records and returns; or

∙certain disclosures of directors' remuneration specified by law are not made; or

∙we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement set out on page 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Page 5

BEN BROWN FINE ART LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEN BROWN FINE ART LIMITED (CONTINUED)

Auditors' responsibilities for the audit of the financial statements

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

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

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

Page 6

BEN BROWN FINE ART LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEN BROWN FINE ART LIMITED (CONTINUED)

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

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

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Ian Clive Rowe (Senior statutory auditor)

for and on behalf of

Greenback Alan LLP

Chartered Accountants

89 Spa Road

London

SE16 3SG

29 October 2021

Page 7

BEN BROWN FINE ART LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2020

	2020	2019
Note	£	£


Turnover	4	12,944,457	12,478,917
Cost of sales		(11,685,393)	(10,066,987)
Gross profit		1,259,064	2,411,930
Distribution costs		(202,819)	(750,155)
Administrative expenses		(1,173,916)	(1,648,266)
Other operating income		94,441	-
Operating (loss)/profit	6	(23,230)	13,509
Interest receivable and similar income	10	453,690	225,412
Interest payable and similar expenses	11	(502,763)	(219,934)
(Loss)/profit before tax		(72,303)	18,987
Tax on (loss)/profit	12	11,134	14,877
(Loss)/profit for the financial year		(61,169)	33,864

Other comprehensive income for the year

Total comprehensive income for the year	(61,169)	33,864

The notes on pages 14 to 28 form part of these financial statements.

Page 8

BEN BROWN FINE ART LIMITED

REGISTERED NUMBER: 04983119

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2020

		2020		2019
Note		£		£

Fixed assets
Tangible assets	13		70,033		124,040
			70,033		124,040
Current assets
Stocks	14	5,056,708		6,722,305
Debtors: amounts falling due within one year	15	9,117,881		7,151,918
Cash at bank and in hand	16	126,019		395,814
		14,300,608		14,270,037
Creditors: amounts falling due within one year	17	(13,139,047)		(13,090,180)
Net current assets			1,161,561		1,179,857
Total assets less current liabilities			1,231,594		1,303,897
Provisions for liabilities
Deferred tax	18	(8,634)		(19,768)
			(8,634)		(19,768)
Net assets			1,222,960		1,284,129

Capital and reserves
Called up share capital	19	10,000	10,000
Profit and loss account	20	1,212,960	1,274,129
		1,222,960	1,284,129

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 October 2021.

B Brown

Director

The notes on pages 14 to 28 form part of these financial statements.

Page 9

BEN BROWN FINE ART LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2020

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 January 2020	10,000	1,274,129	1,284,129
Comprehensive income for the year
Loss for the year	-	(61,169)	(61,169)
Other comprehensive income for the year	-	-	-
Total comprehensive income for the year	-	(61,169)	(61,169)
Total transactions with owners	-	-	-
At 31 December 2020	10,000	1,212,960	1,222,960

The notes on pages 14 to 28 form part of these financial statements.

Page 10

BEN BROWN FINE ART LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2019

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 January 2019	10,000	1,240,265	1,250,265
Comprehensive income for the year
Profit for the year	-	33,864	33,864
Other comprehensive income for the year	-	-	-
Total comprehensive income for the year	-	33,864	33,864
Total transactions with owners	-	-	-
At 31 December 2019	10,000	1,274,129	1,284,129

The notes on pages 14 to 28 form part of these financial statements.

Page 11

BEN BROWN FINE ART LIMITED

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

			2020	2019
			£	£

Cash flows from operating activities
(Loss)/profit for the financial year	(61,169)	33,864
Adjustments for:
Depreciation of tangible assets	54,862	39,458
Government grants	(94,441)	-
Interest paid	502,763	219,934
Interest received	(453,690)	(225,412)
Taxation charge	(11,134)	(14,877)
Decrease/(increase) in stocks	1,665,598	(259,856)
(Increase) in debtors	(1,987,361)	(4,032,287)
(Decrease) in creditors	(677,167)	(3,044,564)
Corporation tax received	33,225	-
Net cash generated from operating activities	(1,028,514)	(7,283,740)

Cash flows from investing activities
Purchase of tangible fixed assets	(857)	(96,248)
Government grants received	94,441	-
Interest received	453,690	225,412
Net cash from investing activities	547,274	129,164
Cash flows from financing activities
Other new loans	714,202	6,200,000
Interest paid	(502,763)	(219,934)
Net cash used in financing activities	211,439	5,980,066
Net (decrease) in cash and cash equivalents	(269,801)	(1,174,510)
Cash and cash equivalents at beginning of year	395,611	1,570,121
Cash and cash equivalents at the end of year	125,810	395,611

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	126,019	395,814
Bank overdrafts	(209)	(203)
	125,810	395,611

Page 12

BEN BROWN FINE ART LIMITED

ANALYSIS OF NET DEBT

FOR THE YEAR ENDED 31 DECEMBER 2020


At 1 January 2020	Cash flows	At 31 December 2020
£	£	£

Cash at bank and in hand	395,814	(269,795)	126,019
Bank overdrafts	(203)	(6)	(209)
Debt due within 1 year	(9,138,655)	392,794	(8,745,861)
	(8,743,044)	122,993	(8,620,051)

The notes on pages 14 to 28 form part of these financial statements.

Page 13

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

1.	General information

Ben Brown Fine Art Limited is a private company limited by share capital, incorporated in the United Kingdom and registered in England and Wales. The principal activity of the company is that of fine art dealers.

2.Accounting policies

2.1

Basis of preparation of financial statements

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

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

The following principal accounting policies have been applied:

2.2

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

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

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

Page 14

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

∙the Company has transferred the significant risks and rewards of ownership to the buyer;

∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of revenue can be measured reliably;

∙it is probable that the Company will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

2.4

Operating leases: the Company as lessee

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

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

2.5

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.

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.

Page 15

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.9

Pensions

Defined contribution pension plan

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

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

2.10

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 reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of financial position 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 reporting date.

2.11

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.

Page 16

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.11

Tangible fixed assets (continued)

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

Depreciation is provided on the following basis:

Short-term leasehold property	-		Over the term of the lease.
Fixtures and fittings	-	33%
Office equipment	-	33%

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

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

2.12

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

2.13

Debtors

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

2.14

Cash and cash equivalents

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

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

2.15

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.

Page 17

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Statement of financial position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.

2.17

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

Page 18

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements,
estimates and assumptions about the carrying amount of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised where the revision affects only that
period, or in the period of the revision and future periods where the revision affects both current and future
periods.
In the course of preparing the financial statements, no judgements have been made in the process of
applying the company's accounting policies, other than those as discussed below that have had a
significant effect on the amounts recognised in the financial statements.
Stock is valued at the lower of cost and net realisable value of individual works of art. In determining an
estimate of net realisable value, management has made judgements in respect the quality of the works
and the current art market using extensive art expertise.

Class 1	12,944,457	12,478,917
	12,944,457	12,478,917

Analysis of turnover by country of destination:

					2020	2019
					£	£

United Kingdom	901,047	4,582,041
Rest of Europe	4,259,502	630,430
Rest of the world	7,783,908	7,266,446
	12,944,457	12,478,917

Page 19

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

5.	Other operating income
		2020	2019
		£	£

Government grants receivable	94,441	-
	94,441	-

	Exchange differences	(139,259)	(843)
	Other operating lease rentals	222,038	273,750

7.	Auditors' remuneration
		2020	2019
		£	£

Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements

18,000

Fees payable to the Company's auditor and its associates in respect of:
Taxation compliance services	9,755	12,580
Other services relating to taxation	13,400	17,520
All other services	16,525	18,970
	39,680	49,070

Page 20

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

Wages and salaries	507,501	463,819
Social security costs	65,631	47,147
Cost of defined contribution scheme	18,789	16,717
	591,921	527,683

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

	2020	2019
	No.	No.

Administration	11	10

9.	Directors' remuneration
		2020	2019
		£	£

Directors' emoluments	102,711	153,530
	102,711	153,530

10.	Interest receivable
		2020	2019
		£	£

	Other interest receivable	453,690	225,412
		453,690	225,412

Page 21

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

11.	Interest payable and similar expenses
		2020	2019
		£	£

Bank interest payable	-	2
Other loan interest payable	502,763	219,932
	502,763	219,934

Corporation tax
Current tax on profits for the year	-	11,633
Adjustments in respect of previous periods	-	(33,208)
	-	(21,575)

Total current tax	-	(21,575)

Deferred tax
Origination and reversal of timing differences	(11,134)	6,698
Total deferred tax	(11,134)	6,698


	Taxation on loss on ordinary activities	(11,134)	(14,877)

Page 22

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

12.Taxation (continued)

(Loss)/profit on ordinary activities before tax

(72,303)

18,987

(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)	(13,738)	3,608
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	3,262	18,463
Capital allowances for year in excess of depreciation	9,337	(8,261)
Utilisation of tax losses	-	(3,454)
Adjustments to tax charge in respect of prior periods	-	(33,208)
Short term timing difference leading to an increase (decrease) in taxation	(10,308)	6,264
Unrelieved tax losses carried forward	313	-
Other differences leading to an increase (decrease) in the tax charge	-	1,711
Total tax charge for the year	(11,134)	(14,877)

Page 23

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

13.	Tangible fixed assets

	Short-term leasehold property	Fixtures and fittings	Office equipment	Total
	£	£	£	£
Cost or valuation
At 1 January 2020	588,855	36,809	76,106	701,770
Additions	-	-	857	857
At 31 December 2020	588,855	36,809	76,963	702,627
Depreciation
At 1 January 2020	465,558	36,635	75,538	577,731
Charge for the year on owned assets	54,357	88	418	54,863
At 31 December 2020	519,915	36,723	75,956	632,594
Net book value
At 31 December 2020	68,940	86	1,007	70,033
At 31 December 2019	123,297	175	568	124,040

The net book value of land and buildings may be further analysed as follows:
	2020	2019
	£	£

Short leasehold	68,940	123,297
	68,940	123,297

14.	Stocks
		2020	2019
		£	£

Finished goods and goods for resale	5,056,708	6,722,305
	5,056,708	6,722,305

Page 24

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

15.

Debtors

					2020	2019
					£	£


Trade debtors	1,146,157	1,260,936
Other debtors	7,773,169	5,683,805
Prepayments and accrued income	198,555	207,177
	9,117,881	7,151,918

16.	Cash and cash equivalents
		2020	2019
		£	£

Cash at bank and in hand	126,019	395,814
Less: bank overdrafts	(209)	(203)
	125,810	395,611

Page 25

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

17.	Creditors: Amounts falling due within one year
		2020	2019
		£	£

Bank overdrafts	209	203
Other loans	6,914,202	6,200,000
Trade creditors	2,570,929	1,919,259
Corporation tax	11,827	-
Other taxation and social security	74,375	20,464
Other creditors	3,030,427	4,286,120
Accruals and deferred income	537,078	664,134
	13,139,047	13,090,180

The following liabilities were secured:
	2020	2019
	£	£


Other loans	6,914,202	6,200,000
	6,914,202	6,200,000

Details of security provided:

The other loans are secured on art works held by the company and related company, Ben Brown Hong Kong.

18.	Deferred taxation

	2020	2019
	£	£

At beginning of year	(19,768)	(13,070)
Charged to profit or loss	11,134	(6,698)
At end of year	(8,634)	(19,768)

Page 26

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

18.Deferred taxation (continued)

The provision for deferred taxation is made up as follows:
	2020	2019
	£	£

	Accelerated capital allowances	(8,634)	(19,768)
		(8,634)	(19,768)

19.	Share capital
		2020	2019
		£	£

Allotted, called up and fully paid

10,000 (2019 - 10,000) Ordinary shares of £1.00 each	10,000	10,000

20.

Reserves

Profit and loss account

The profit and loss account reserve consists of the cumulative total of all current and prior year period profits and losses.

21.	Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separetely from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £18,789 (2019: £16,717). Contributions totalling £6,641 (2019: £2,292) were payable to the fund at the reporting date.

Not later than 1 year	259,650	182,100
Later than 1 year and not later than 5 years	369,890	236,428
Later than 5 years	470,250	-
	1,099,790	418,528

Page 27

BEN BROWN FINE ART LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

23.	Related party transactions
	Included in creditors is £1,831,659 (2019: £2,315,085) due to director Mr B Brown. Included in debtors is an amount of £6,626,059 (2019: £5,028,016) due from Ben Brown Hong Kong, a company in which Mr B Brown has a material interest. Included in creditors is an amount of £1,223,866 (2019: £246,069) due to Ben Brown Hong Kong.

24.	Controlling party

The controlling party is director Mr B Brown.

Page 28