ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
Registered number:
Charity number: 1048581
(A Company Limited by Guarantee)
For the year ended
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Contents
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Reference and Administrative Details of the Charity, its Trustees and Advisers
For the year ended 31 March 2020
Trustees
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Trustees' Report
For the year ended 31 March 2020
The Trustees present their Annual Report together with the Consolidated Financial Statements of the Group and the Trust for the year ended 31 March 2020.
The Annual Report serves the purposes of both a Trustees' report and a Directors' report under company law. The Trustees confirm that the Annual Report and Consolidated Financial Statements of the charitable company comply with the current statutory requirements, the Companies Act 2006, the Charities Act 2011, the requirements of the charitable company's governing document and the provisions of the Statement of Recommended Practice (SORP) "Accounting and Reporting by Charities" effective 1 January 2015.
Since the group and the Charity qualify as small under section 383 of the Companies Act 2006, the group strategic report required of medium and large companies under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 has been omitted.
Objectives and activities
a. Achievements and performance
Manchester City Galleries Trust is an independent Trust raising money to support the projects and programmes of Manchester City Art Gallery.
The Trustees measure the success of the Trust by the number of visitors to the gallery, popularity of exhibitions and financial performance. Positive performance in turn provides additional resources for the Trust to further its objectives. During the year, the Trust had two trading subsidiaries, Manchester Art Gallery Trading Company Limited (company number 04465391) and Manchester Art Gallery Development Company Limited (company number 11901089). Manchester Art Gallery Trading Company Limited This company operates the Manchester Art Gallery Café and venue hire gifting profits, when available, annually to the Trust. The directors of this company are: Amanda Wallace Robert Moss Thom Hetherington Timothy Entwistle Paul Hindle (appointed 19 February 2020) Rachel Rosewell (resigned 19 February 2020)
Manchester Art Gallery Development Company Limited
This company operates the corporate membership scheme on behalf of the Art Gallery. Profits are gifted annually to the Trust. The directors of this company are: John Williams Timothy Entwistle The Trust raises funds to help Manchester Art Gallery: • Deliver capital projects; • Mount displays and exhibitions; • Preserve and conserve works from the collections of Manchester Art Gallery; • Acquire works for its collections; and • Deliver an education, outreach and public programme of events and activities.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Objectives and activities (continued)
In 2019/20, payments were made from the Trust to support the gallery’s programme as follows: • £147,799 fundraising contribution to the core exhibitions and learning programme, paid up as agreed to Manchester City Council at the end of the year; • £37,901 from the National Lottery Heritage Fund Collecting Cultures grant held in restricted funds by the Trust for the acquisition of couture fashion for the collection. In the past year, as the gallery’s new vision and mission has become embedded and programming has shifted to deliver it, the focus of fundraising has changed significantly. The programme, and the appointment of a new Development Manager with a background in educational and health charity fundraising has meant that funding applications have focused on learning and engagement. In the light of the COVID-19 pandemic, the lockdown which closed the gallery in the period between March and August and again in November 2020, and the likely slow recovery, this shift in fundraising is even more relevant and better aligned with funder guidelines. As such, we have continued to see some success, even during gallery closure. Major projects supported by the Trust in 2019/20 included: Halima Cassell (February 2019 - January 2020). This exhibition showcased one of the UK’s most distinctive and dynamic sculptors and ceramicists. Cassell was born in Kashmir, grew up in the North West of England and her sculpture reflects her dual international and local heritage. This was her largest show to date. Get Together and Get Things Done (May - September 2019). This exhibition was part of a city-wide programme in 2019 to commemorate the bicentenary of the Peterloo Massacre and explored the wider theme of the crowd through international historic and contemporary art and group activity. Louise Giovanelli (June 2019 - April 2020). Contemporary painter Louise Giovanelli investigated the languages and histories of painting. For this exhibition she focused on the Medieval to the Renaissance period, exploring how the development of new techniques and styles influenced the course of European painting. The gallery acquired a new work for the collection from the exhibition thanks to a donation from a Patron. School of Integration (July – September 2019). A new commission with leading Cuban artist and activist Tania Bruguera for Manchester International Festival 2019. Within the current national context of polarisation, it reimagined the gallery as a place for integration of all people and acknowledged the city’s cosmopolitanism as one of its greatest strengths. We worked with 104 immigrants originally from 53 countries who have made Manchester their home to provide lessons in a wide-range of subjects including languages, culture, politics, history and food. Out of the Crate (November 2019 - 2021). Investigating the Sculpture Collection - This long term exhibition looks behind the scenes of the sculpture collection. Part exhibition, part research space, it delves into the un-tapped history of the collection and is an opportunity to investigate sculpture through access to stored collections and archival material. Trading Station: How hot drinks shape our lives (December 2019 - 2021). This long term exhibition traces the history of how hot drinks arrived in the UK, revealing their global histories, connections to slavery and colonisation and contemporary ethical issues. Spanning four centuries and ranging from silver, porcelain, glass, fashion, lighting, prints and painting, this showcase of exquisite and utilitarian objects asks probing questions and uncovers hidden histories. At its heart is a gathering space for visitors and groups to use to encourage new conversations and action on how better to live together today. Fashion Gallery. Development of a new dedicated space to display changing exhibitions from our costume collection. This modest capital project has attracted funding from The Clothworkers’ Foundation and an individual donor. Due to COVID-19 and subsequent gallery closure, opening is delayed until November 2021.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Objectives and activities (continued)
Early Years programme. Through redevelopment of the Clore Art Studio we are creating a unique immersive experience for families. Working closely with Manchester Health Visitors Team, staff from Sure Start and the company Tiddlywinks, we are testing new types of activities for babies, toddlers, children and parents/carers that focuses on health outcomes. Baby Stay and Play is a weekly art/health-check session for new parents and their infants and for the Manchester Health Visiting team to carry out baby health checks. Both health visitors and parents say they find the art gallery to be an effective and welcoming environment. This year, Baby Stay and Play attracted nearly 900 new parents and babies to the gallery, and we have also delivered these sessions at Clayton Sure Start Centre and Olivia House, a charity for very young mothers. Families. We are working with Wilbraham Primary School to improve the quality and appeal of gallery activities for a more diverse range of families. The gallery continues to run its monthly Open Doors programme for autistic children and their families and the family holiday programme has grown with stronger links to partnerships and national initiatives (eg. World Book day). As a result, we now have the highest level of engagement with Manchester families, peaking at over 50,000 this year and becoming the fastest growing part of the gallery’s programme. Social and creative opportunities for the city’s young people. The gallery’s Creative Consultants initiative attracts young people outside formal education, providing art sessions and projects for young people as they begin to exercise their own choices and decisions. Communities. We have extended partnerships with community organisations and embedded adult access with the gallery’s Making Conversations sessions (for vulnerable adults) and British Sign Language and Audio described tours. We continue to develop our work offering art-based English for Speakers of Other Languages learning. Volunteering programmes, focused on improving well-being and mental health remain popular with more demand than can be accommodated. Age Friendly. The gallery is working with the artist Suzanne Lacy on a participatory project that will involve BAME women reaching retirement age, exploring the situation of marginalised women before they become entitled to a state pension. The gallery’s Age Friendly Collective continues to programme events and activities at the gallery. Addressing Homelessness. The gallery has developed a longstanding relationship with Streetwise Opera and With One Voice. Streetwise Opera held weekly performances in the gallery during this period and has delivered four public events, showcasing the talents of homeless people. In addition to this, we worked with the Museum of the Homelessness to deliver the pop-up exhibition/performance, Objectified. This interpreted the lives of homeless people through their objects and stories. Health and Well Being. Alongside the regular Take Notice and Mindful Marks sessions, the gallery established a mindful exhibition, And Breathe…. where art was selected by Charlestown Primary School (Cheetham) and an adult mental health charity, and is enhanced by comfortable chairs and sofas, and a mindful app that can be downloaded for free to guide the listener through relaxation techniques. Dwell-time in this space has increased and visitor feedback is very positive. This work is currently proving popular with funders and has become a priority area for fundraising. Drawing across the Curriculum. As part of its much broader engagement with primary and secondary schools, the Gallery partnered with training providers, One Education and partner schools to explore how Leonardo da Vinci’s drawings could be used to support skills development with lower Key Stage 2 pupils. A learning resource ‘Observing the Body’ was co-developed and is published on the Manchester Art Gallery website for schools to download for free. Web and digital. Major improvements to the Gallery’s web-site digital presence have been undertaken in this period. This proved particularly essential towards the end of the year as the country went into lockdown. Given that this is likely to be an area of growth, it has become a fundraising priority to raise funds to improve hardware and software and for additional support in this area. Acquisitions. The Trust contributed to fundraising for acquisitions of artworks for the collection, including a work by Louise Giovanelli and Couture fashion for the costume collection.
Objectives and activities (continued)
In setting objectives and planning for activities, the Trustees have given due consideration to general guidance published by the Charity Commission relating to public benefit, including the guidance 'Public benefit: running a charity (PB2)'.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Fundraising
a. Overview
Although Quarter four began positively from a fundraising perspective, COVID-19 and the subsequent closure of the gallery for over four months meant that the year ended in very challenging circumstances.
Onsite Donations Onsite donations is an area where we were already looking to increase income, with a commitment to purchase a new cash donation box and contactless donation stations. Due to delays in production, the cash box arrived in time to be installed as the gallery re-opened post the COVID-19 closure. Delays in the supply chain mean that we are yet to install the contactless points. It is likely, based on the experience of similar organisations in the city and across the UK, that contactless will increase on-site donations significantly. With COVID-19 having reduced people’s use of cash, it is likely that the majority of on-site donations going forward will be made by contactless. Online Donations In line with most similar organisations, online donations are relatively low, and almost never unsolicited. We are looking at how we can encourage online giving, making a more overt ask in all communications. Friends and Patrons Although Friends membership is not increasing considerably, retention has been good, and unexpectedly so during gallery closure, given the event-driven motivation for many members. During the year the relatively new Friends Coordinator has made significant improvements to systems and continues to streamline the scheme. We have cancelled our Blackbaud contract for Raisers Edge (CRM) as the system was out of date, difficult to use and Manchester City Council had major concerns over its levels of security. Business Partners The new Business Partners scheme, launched in 2017/18 had already failed to increase the number of members, although existing members were mostly retained. Feedback had already suggested that this is due to the financial climate in businesses rather than the offer. In the light of COVID-19, the financial fallout, and the fact that one of the main benefits of the scheme is corporate events and group activities, we are likely to lose members over the next financial year and it will need to be fully re-assessed. Trusts and Foundations Due to the recruitment of a new full-time Development Manager, the number of bid submissions to Trusts and Foundations in the year has risen significantly, with a good return. This remains the most lucrative area for fundraising and the gallery has focused on making applications that have a direct impact on budgeted costs rather than for new projects. The professional experience of the new member of staff in education and health charities has led to a broader range of submissions to charities that the gallery has not applied to before. Emergency funds At the end of the year, with the onset of COVID-19, there were immediate and significant changes to the funding landscape. Whereas some Trusts and Foundations closed to applications during the pandemic (with likely re-opening in Autumn 2020), others launched quick-turnaround emergency funding to directly address the situation. Although a significant amount of these funds has been directed to performing arts organisations, responding to the likely longer term impact on them, a number of funders have recognised the crisis museums and galleries face and have made funds available. All possible funds have been applied for, including the major Department for Digital, Culture, Media and Sport Cultural Recovery Fund.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Fundraising (continued)
Impact of COVID-19 Whilst the initial impact of COVID-19 has been immediately felt by the gallery, in particular due to the losses made in the Trading Company, the full financial impact will not be felt until late 2020/21 and beyond due to the likely slow return to normal visitor numbers and events. In addition, Manchester City Council is facing a deficit in the region of £60m so the gallery will be expected to make significant savings, including a highly likely restructure. Staff A new Development Manager was recruited in this period which has had a direct impact on grant income. The Development Team still has low capacity given the size of the organisation and annual budgets, but some welcome stability in the team after much disruption should have a positive impact going forward. In order to address limited capacity, the Head of Development and Development Manager continue to have the support of members of the Learning & Engagement and Curatorial teams in making additional grant applications. The Development Manager (FT), Friends Coordinator (FT) and Head of Development (PT) are employed by Manchester City Council. In addition, a freelance Accountant works for the Trust on flexible hours.
b. Priorities for Fundraising 2020/21
Given the likely financial situation we face in 2020/21, the focus will be on stabilisation of existing priority activities, budget-relieving and unrestricted income. We will focus on philanthropy, building on our Friends and Patrons schemes, and developing our relationships with individual donors. Priority will be given to securing funding to support: • Core costs and delivery of mission and vision. A campaign to make our charitable and educational activity more visible, promoting civic philanthropy and the need for committed Patrons and unrestricted gifts. • The ongoing development of a new community museum at Platt Hall through capital and revenue fundraising. Building on the significant investment by Manchester City Council, the Esmee Fairbairn Collections Fund (EFCF) and the Paul Hamlyn Foundation (PHF), we will focus learning and engagement work on the hall and the needs of its local communities. During 2020/21,we will develop a longer-term strategy for the site which will lever further funding to support the ultimate aim of re-opening fully as a sustainable and embedded local service • A major re-display of the collection which will offer new interpretations of historic, modern and contemporary works in galleries that have remained virtually unchanged for almost 20 years. Thematic displays will explore Climate Emergency, Work and Migration. A new Fashion Gallery will become a dedicated space for changing exhibitions from the gallery’s important costume collection following the closure of the Gallery of Costume. • Ongoing good housekeeping for our buildings and collection. We will ensure that the gallery’s conservation and technical teams have the resources they need to keep our asset safe and in good repair. This includes minor capital works, storage improvements and conservation work and refurbishment of storage facilities at Manchester Art Gallery and Queen’s Park. • We will continue to secure funding, where possible, for exhibitions including Bellotto (March 2021), Derek Jarman; Protest! (May 2021), Dandy Style (November 2021) and British Art Show 9 (early 2022). • We will continue to secure funding for the gallery’s Learning and Engagement programme. In particular the ongoing development of the Clore Early Years space, wellbeing programmes, work with older people and increased online provision.
Financial review
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Financial review (continued)
a. Review of the year
During the year ended 31 March 2020, the Group’s income amounted to £1,248,034 (2019: £1,103,582). The Group's expenditure for the year ended 31 March 2020 amounted to £1,169,056 (2019: £1,063,257). The net surplus for the year amounted to £78,978 (2019: surplus of £40,325).
As at 31 March 2020, the Group had total funds of £291,262 (2019: £212,284), of which £138,636 (2019: £55,949) were restricted funds. At the year end, the Group held £645,807 (2019: £549,815) in liquid assets. As at 31 March 2020, the Trust had total funds of £293,800 (2019: £212,283), and £456,182 (2019: £320,557) in liquid assets. The Trust’s subsidiary, Manchester Art Gallery Trading Company Limited, achieved turnover of £942,301 for the year ended 31 March 2020 (2019: £930,650) and reported a loss of £2,539 (2019: profit of £73,906) before making a donation to the Trust of £nil (2019: £24,528). As at 31 March 2020, Manchester Art Gallery Trading Company Limited had net liabilities of £2,538 (2019: net assets of £1). The Trust’s second subsidiary, Manchester Art Gallery Development Company Limited, recorded a profit of £23,338 for the year ended 31 March 2020 which was donated to the Trust. As at 31 March 2020, Manchester Art Gallery Development Company Limited had net assets of £1. Comparative information is not available as the company only became active on 1 April 2019.
b. Reserves policy
The Trustees regularly review the level of the Trust’s reserves to ensure that they are sufficient to meet foreseeable charitable expenditure, fixed costs and working capital requirements. A risk assessment is undertaken using the risk identification approach to determine anticipated:
• Charitable expenditure • Fixed costs • Unrestricted income • Restricted income • Working capital requirement The Trustees aim to maintain a sufficient level of reserves to ensure continuing operations for the foreseeable future and that the Trust is able to meet its statutory and legal obligations. Including restricted reserves, the Trustees have concluded that reserves of £300,000 should be maintained. Reserves held by the Trust as of 31 March 2020 total £293,800 (2019: £212,283). Accordingly, the Trustees intend to increase reserves in the year to 31 March 2021 by approximately £7,000.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Financial review (continued)
c. Going concern
With the national lockdown on 23 March 2020 the Manchester Art Gallery and onsite Café closed.
The activities of the gallery have been substantially reduced and, as a result, expenditure has been contained. The gallery re-opened on 20 August 2020 on a limited basis and with appropriate measures in place to ensure social distancing is maintained. With the advent of the second lockdown the gallery re-closed on 5 November 2020. Plans are in place to re-open when local or national lockdown restrictions are lifted. When the Café closed on 23 March 2020, all staff were furloughed on 80% pay. Of the 31 staff in place at the end of July 2020, eight have subsequently taken voluntary redundancy, 16 have moved onto casual contracts and seven have accepted a reduction in their hours (typically a reduction of around 50%). The directors have therefore substantially reduced the group’s costs to a level where the group can continue in existence for at least 12 months following the signing of the accounts. In addition, Manchester City Council has confirmed that an amount of £102,343 due from the group to Manchester City Council will not be called for repayment for at least 12 months. The Café has remained closed since 23 March 2020. Preparations are underway to enable the Café to re-open when local or national lockdown restrictions are lifted. Since the year end, Manchester Art Gallery has been awarded a grant of £780,022 from the Culture Recovery Fund, a significant proportion of which will be paid to Manchester Art Gallery Trading Company Limited (which operates the Manchester Art Gallery Café). This will enable this company to continue as a going concern and to make certain physical changes to the layout and infrastructure of the Café and to retain certain key employees. The Manchester City Galleries Development Company Limited generates corporate membership income with only very limited expenditure. Whilst it is expected that membership income will fall in the year to 31 March 2021, the directors are confident that this company can continue in existence for the foreseeable future. Accordingly, as a result of the actions that have been taken, and after making appropriate enquiries, the Trustees have a reasonable expectation that the Trust and the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the Accounting Policies.
d. Investments policy
As at 31 March 2019 the Trust was owed £63,703 by Manchester Art Gallery Trading Company Limited in respect of a loan and outstanding donations from 2017 and 2019. During the year repayments totalling £60,253 were made and interest of £878 was charged on the loan element of the balance. At 31 March 2020 the balance outstanding was £4,328 in aggregate.
The loan element of the balance is governed by a formal loan agreement and carries interest at 5% per annum. The balance of the Trust's funds are held in interest and non interest bearing bank accounts.
Structure, governance and management
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Structure, governance and management (continued)
a. Constitution
Manchester City Galleries Trust is registered as a charitable company limited by guarantee and was established and is governed under a Memorandum and Articles of Association.
The Trust is a registered charity, charity number 1048581, with a registered office of Manchester Art Gallery, Mosley Street, Manchester, M2 3JL. The Trust is established for the advancement of the education of the citizens and other residents of the City of Manchester in particular and of other citizens and residents of the United Kingdom in general, in British and foreign history of the Arts, and for the benefits of scholars in the Universities and local, national and foreign researchers in history of the Arts.
b. Methods of appointment or election of Trustees
The management of the Trust is the responsibility of the Trustees who are elected and co opted under the terms of the Articles of Association.
The directors/trustees who served during the year are listed on page 1 of the annual report. The directors/trustees are elected annually by members in a general meeting. There has been one new appointment during this period (Pieternella Van Den Houten) and one Trustee resigned (Robert Moss). Prior to the signing of these accounts, a further Trustee (Helen Taylor-O'Brien) has resigned.
c. Policies adopted for the induction and training of Trustees
New Trustees are introduced to the Group, usually by existing Trustees and Manchester City Galleries staff, and are given a full background to the Group’s history and current activities to ensure they have a good knowledge of the Group and the activities of Manchester City Galleries. A role description is issued to all new Trustees so that they are fully aware of their duties and responsibilities.
d. Organisational structure and decision making
The Trust is managed by the trustees / directors and by employees of Manchester City Council. There are no staff directly employed by the Trust, although staff working in the Manchester Art Gallery Café are employed by Manchester Art Gallery Trading Company Limited and all trading business is recorded through this company.
On 1 April 2019, Manchester Art Gallery Development Company Limited became active and now records the corporate membership and sponsorship income. The Trustees meet quarterly to review the financial position of the Trust and to guide progress against the Trust’s objectives. The Directors of Manchester Art Gallery Trading Company Limited met bi-monthly during the year (or more frequently when necessary) to review the trading results and monitor and determine the company’s future commercial objectives. The operational management of Manchester Art Gallery Trading Company rests with three key managers; the General Manager, the Finance Manager and the Head of Commercial operations. These key managers attended and contributed to the Directors’ meetings. The remuneration of the operational management is set by the Board of the Directors having regard to performance and the market rate for comparable roles.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Structure, governance and management (continued)
e. Related party relationships
The Trust holds the entire issued share capital of Manchester Art Gallery Trading Company Limited (formerly Manchester City Galleries Development Company Limited) and Manchester Art Gallery Development Company Limited and co-operates with Manchester City Council in pursuit of its charitable objectives.
Transactions between the Trust and its subsidiaries are shown in note 26 to the accounts. Trading profits (net of earlier deficits) of the Manchester Art Gallery Trading Company Limited and Manchester Art Gallery Development Company Limited will be gifted annually to the Trust.
f. Risk management
The Trustees have assessed the major risks to which the Trust and the Group are exposed, in particular those related to the operations and finances of the Trust and the Group, and are satisfied that systems and procedures are in place to mitigate the exposure to the major risks.
The principal risks affecting the Trust and the Group are the dependence on fundraising for donations and sponsorship and the popularity of the exhibitions programme which in turn generates donation box income and retail income for the Manchester Art Gallery Café. The Trustees manage these risks for the Trust and the Group by regularly reviewing past financial performance, future financial projections and the exhibitions programme. In undertaking this review, the Trustees are assisted by professional curatorial staff employed by Manchester City Council. The principal risks facing Manchester Art Gallery Trading Company Limited, which operates the Manchester Art Gallery Café are: • Consumer spending. The company’s revenue is dependent on consumer spending which can reduce for a variety of reasons such as uncertainty, the general economic environment, competition and the weather. The company seeks to mitigate this risk by providing exceptional value for money, top quality food and drink and attentive service combined with an excellent location in the heart of Manchester. • Food safety. Maintaining high food hygiene standards are critical to the company’s business. The directors and senior management takes food hygiene very seriously and have implemented best practice operational procedures to ensure this risk is reduced. • Reputational risk. The directors and senior managers are conscious that with the ever increasing use of social media the reputation of the business can easily be damaged. The company seeks to provide a comprehensive customer experience which exceeds expectations. The directors monitor social media and respond where appropriate. Other than continued fiscal pressures and the impact of the ongoing Covid-19 situation, the Trustees are not aware of any other factors that will impact the future performance of the Trust and the Group.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Structure, governance and management (continued)
g. Public benefit
The Trust is established for the advancement of the education of the citizens and other residents of the City of Manchester in particular, and of other citizens and residents of the United Kingdom in general, in British and foreign history of the Arts, and for the benefits of scholars in the Universities and local, national and foreign researchers in history of the Arts.
The Trustees confirm that they have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing the Trust’s aims and objectives and in planning future activities and services. The Trust currently achieves its objectives by raising funds to support the Galleries’ programme of exhibitions and educational activities and to fund acquisition of artworks for the collection. In its support of Manchester City Galleries’ activities, the Trust contributes to the free access of the general public to Manchester Art Gallery regardless of their background. The Trust is of the view that any private benefit gained by the Trustees is incidental.
Funds
The funds held by the Trust are detailed in the notes to the financial statements.
Information on fundraising practices
Section 162a of the Charities Act 2011 requires charities to make a statement regarding fundraising activities. The Trustees confirm that all fundraising is managed internally without the involvement of commission driven external fundraisers or third parties. The routine management of income generation rests with the gallery’s Head of Development.
In general, fundraising activities are directed towards individuals and organisations that are already involved in the work of the gallery or who have expressed an interest in becoming involved.
Statement of Trustees' responsibilities
The Trustees (who are also the directors of the Charity for the purposes of company law) are responsible for preparing the Trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the Trustees to prepare financial statements for each financial year. Under company law the Trustees 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 Group and the Charity and of their incoming resources and application of resources, including their income and expenditure, for that period. In preparing these financial statements, the Trustees are required to:
∙select suitable accounting policies and then apply them consistently;
∙observe the methods and principles of the Charities SORP (FRS 102);
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards (FRS 102) have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and the Charity's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Disclosure of information to auditors
Each of the persons who are Trustees at the time when this Trustees' report is approved has confirmed that:
∙so far as that Trustee is aware, there is no relevant audit information of which the charitable group's auditors are unaware, and
∙that Trustee has taken all the steps that ought to have been taken as a Trustee in order to be aware of any relevant audit information and to establish that the charitable group's auditors are aware of that information.
Auditors
The auditors, Hurst Accountants Limited, have indicated their willingness to continue in office. The designated Trustees will propose a motion reappointing the auditors at a meeting of the Trustees.
Approved by order of the members of the board of Trustees and signed on their behalf by:
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Independent Auditors' Report to the Members of Manchester City Galleries Trust
We have audited the financial statements of Manchester City Galleries Trust (the 'parent charitable company') and its subsidiaries (the 'group') for the year ended
In our opinion the financial statements:
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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the Trustees' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the Trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent charitable company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Independent Auditors' Report to the Members of Manchester City Galleries Trust (continued)
The Trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditors' report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Trustees' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
∙the Trustees' Report has been prepared in accordance with applicable legal requirements.
In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' Report.
We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:
∙the parent charitable company has not kept adequate and sufficient accounting records, or returns adequate for our audit have not been received from branches not visited by us; or
∙the parent charitable company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of Trustees' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit; or
∙the Trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Trustees' Report and from the requirement to prepare a Strategic Report.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Independent Auditors' Report to the Members of Manchester City Galleries Trust (continued)
As explained more fully in the trustees' responsibilities statement, the Trustees (who are also the directors of the charitable company for the purposes of company law) 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 Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
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.
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.
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, and to the charitable company's trustees, as a body, Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charitable 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 charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
Cheshire
SK1 1TD
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Consolidated Statement of financial activities (incorporating income and expenditure account)
For the year ended 31 March 2020
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Registered number: 03053689
Consolidated Balance Sheet
As at 31 March 2020
The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.
The financial statements have been prepared in accordance with the provisions applicable to entities subject to the small companies regime.
The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by:
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Registered number: 03053689
Charity Balance Sheet
As at 31 March 2020
The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by:
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Consolidated Statement of Cash Flows
For the year ended 31 March 2020
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
Manchester City Galleries Trust is a company limited by guarantee, registered number 03053689, incorporated in England. It is also a charity, registered number 1048581. The registered address is Manchester Art Gallery, Mosley Street, Manchester, M2 3JL.
The principal activity of the group is raising money to support the projects and programmes of Manchester City Art Gallery.
2.Accounting policies
The consolidated statement of financial activities (SOFA) and consolidated balance sheet consolidate the financial statements of the Group and all of its subsidiary undertakings ("subsidiaries"). The results of the subsidiaries are consolidated on a line by line basis.
The Group has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of financial activities in these financial statements.
The Charity meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemption available to it in respect of its separate financial statements in relation to presentation of a cash flow statement.
The Charity is a company limited by guarantee. The members of the company are the Trustees names on page 1. The address of its registered office is Manchester Art Gallery, Mosley Street, Manchester, M2 3JL. In the event of the Charity being wound up, the liability in respect of the guarantees is limited to £1 per member of the Charity.
Page 20
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
2.Accounting policies (continued)
The gallery and onsite café closed temporarily on 23 March 2020 in line with government restrictions.
Consequently, the activities of the gallery have been substantially reduced and, as a result, expenditure has been restricted. The gallery re-opened on 20 August 2020 on a limited basis and with appropriate measures in place to ensure social distancing is maintained. With the advent of the second lockdown the gallery re-closed on 5 November 2020. Plans are in place to re-open when local or national lockdown restrictions are lifted. When the café was closed on 23 March 2020, all staff were furloughed on 80% pay. Of the 31 staff in place at the end of July 2020, 8 have subsequently taken voluntary redundancy, 16 have moved onto casual contracts and 7 have accepted a reduction in their hours (typically a reduction of around 50%). The directors have therefore substantially reduced the group’s costs to a level where the group can continue in existence for at least 12 months following the signing of the accounts. In addition, Manchester City Council has confirmed that an amount of £102,343 due from the group to Manchester City Council will not be called for repayment for at least 12 months. The Café has remained closed since 23 March 2020. Preparations are underway to enable the Café to re-open when local or national lockdown restrictions are lifted. Since the year end, Manchester Art Gallery has been awarded a grant of £780,022 from the Culture Recovery Fund, a significant part of which will be paid to Manchester Art Gallery Trading Company Limited (which operates the Manchester Art Gallery Café). This will enable this company to continue as a going concern and to make certain physical changes to the layout and infrastructure of the Café and to retain certain key employees. In deciding to prepare the financial statements on a going concern basis, the trustees have considered all available information about the future for a period of at least 12 months from the date of approval. The information includes financial forecasts which are underpinned by a level of guaranteed funding from the Culture Recovery Fund. Other funding sources are assumed in the forecasts that are not yet guaranteed but the trustees believe that there is a realistic prospect of securing them. Based on these forecasts, the trustees believe that the gallery can continue in operational existence for at least the next 12 months.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
2.Accounting policies (continued)
All income is recognised once the Charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.
The recognition of income from legacies is dependent on establishing entitlement, the probability of receipt and the ability to estimate with sufficient accuracy the amount receivable. Evidence of entitlement to a legacy exists when the Charity has sufficient evidence that a gift has been left to them (through knowledge of the existence of a valid will and the death of the benefactor) and the executor is satisfied that the property in question will not be required to satisfy claims in the estate. Receipt of a legacy must be recognised when it is probable that it will be received and the fair value of the amount receivable, which will generally be the expected cash amount to be distributed to the Charity, can be reliably measured.
On receipt, donated professional services and facilities are recognised on the basis of the value of the gift to the Charity which is the amount it would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.
Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Income tax recoverable in relation to investment income is recognised at the time the investment income is receivable.
Income from grants is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably.
Other income is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service. Revenue from the sale of food and beverages is recognised at the point of sale. Revenue from a contract to provide services is recognised in the period in which the services are provided in.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
2.Accounting policies (continued)
Fundraising costs are those incurred in seeking voluntary contributions and do not include the costs of disseminating information in support of the charitable activities. Governance costs are those incurred in connection with administration of the Charity and compliance with constitutional and statutory requirements.
Costs of generating funds are costs incurred in attracting voluntary income, and those incurred in trading activities that raise funds. The costs of commercial trading includes the cafeteria and its associated support costs.
Charitable activities and Governance costs are costs incurred on the Charity's operations, including support costs and costs relating to the governance of the Charity apportioned to charitable activities.
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Group; this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited.
Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.
Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives.
Depreciation is provided on the following bases:
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 the consolidated statement of financial activities.
Investments in subsidiaries are valued at cost less provision for impairment.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
2.Accounting policies (continued)
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average 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 costs to complete and sell. The impairment loss is recognised immediately in the statement of financial activities.
Liabilities are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.
Liabilities are recognised at the amount that the Group anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.
Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the consolidated statement of financial activities as a finance cost.
The Group only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.
Rentals paid under operating leases are charged to the consolidated statement of financial activities on a straight line basis over the lease term.
The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Group to the fund in respect of the year.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
2.Accounting policies (continued)
General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Group and which have not been designated for other purposes.
Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Group for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.
The Charity is entitled to certain tax exemptions on income and profits from investments, and surpluses on any trading activities carried on in furtherance of the charity's primary objectives, if these profits and surpluses are applied solely for charitable purposes.
Income is stated net of VAT where applicable. Expenditure is stated net of any recoverable VAT. Any irrecoverable VAT is recognised as a cost against the activity for which the expenditure was incurred.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
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.
Critical accounting estimates and assumptions:
The Charity makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Critical areas of judgement:
Accruals and deferred income
Accruals and deferred income are entered in the financial statements based on management expectations, taking into account various factors relevant to each item. The Group recognised accruals and deferred income at 31 March 2020 of £244,056 (2019: £264,164). Depreciation The Group exercises judgement in estimating the useful economic life of plant and machinery, office equipment and computer equipment. The net book value of fixed assets at the year end totalled £27.476 (2019: £30,147). Bad debt provision Provisions are liabilities of uncertain timing or amount and therefore, in making a reliable estimate of the quantum and timing of liabilities, judgement is applied and re-evaluated at each reporting date. The Group recognised a bad debt provision as at 31 March 2020 of £nil (2019: £nil).
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
Page 28
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
Page 29
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
11.Analysis of expenditure by activities (continued)
Support costs have been allocated on an actual basis.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
13.Staff costs (continued)
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
Page 32
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
Page 33
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
Page 34
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
Page 35
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
Statement of funds (continued) Restricted funds are funds that have been provided in support of specific projects. The Trust holds sufficient resources to enable each fund to be applied in accordance with the restriction and can be itemised as follows: Zochonis Trust: charitable donation specifically to support the gallery's work with young people. Nordic Design: specific donation for an acquisition of a work of art. Assheton Bennett:donations to support the further development of the gallery's silver collection. Leonardo Da Vinci education programme: specific donation to support the education programme. Martyn Torevell Louise Gionvelli acquisition: specific donation for an acquisition of a work of art. Paul Mellon - Speech Acts: donations in support of the Speech Acts Exhibition. Manchester Contemporary Acquisition Fund: donation toward the acquisition of artwork for the Manchester Contemporary Collection. Royal Collections Fund:specific donation to support the Leonardo Da Vinci exhibition. Livingstone Trust - Waqas: specific donation for an acquisition of a work of art by Waqas. Heritage Lottery Funding - Collecting Cultures: grant to develop a costume collection. Friends Acquisition Fund: grant for the acquisition of new items for the gallery's collections. Peter Garside Legacy: grant towards activities for families with children with autism. Francis Winham (Making Conversations): grant to support transport and refreshment costs for participants in the Making Conversations engagement programme. Paul Hamlyn Foundation: Explore and Test grant secured to undertake a learning and engagement project focused on Platt Hall, developing activities and models for the hall's re-imagining as a community museum. National Heritage Fund (Trading Stations): specific donation for the Trading Stations "How Hot Drinks Shape Our Lives" - Engagement project. Sylvia Adams (Healthy Baby Stay & Play): grant towards running the Healthy Child Drop-In and Baby Stay & Play events. ECFC Funding for Platt Hall Project: grant from the Esmeé Fairbairn Collections Fund to fund a project using Platt Hall gallery and its collections to test and develop a new sector leading model as the UK's first fully user-generated museum. Martyn Torevell: this donation was held as restricted whilst the donor decided which specific project it was intended for. He later decided that the donation was unconditional and informed the Trust that it could be reclassified to general funds. Costume Society: Elizabeth Hammond grant towards the conservation of a specific item in the Dandy Style exhibition.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
The group operates a defined contribution 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 £9,191 (2019: £7,112). Contributions totalling £1,854 (2019: £nil) were payable to the fund at the balance sheet date and are included in creditors.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the year ended 31 March 2020
Manchester Art Gallery was closed to the public on 23 March 2020 in line with government guidance issued due to the Covid-19 pandemic. On 20 August 2020, it was re-opened with a reduced capacity, opening hours and access to exhibitions. With the advent of the second lockdown the gallery re-closed on 5 November 2020. Plans are in place to re-open when local or national lockdown restrictions are lifted.
The Café has remained closed since 23 March 2020. Preparations are underway to enable the Café to re-open when local or national lockdown restrictions are lifted. Since the year end, Manchester Art Gallery has been awarded a grant of £780,022 from the Culture Recovery Fund, a significant part of which will be paid to Manchester Art Gallery Trading Company Limited (which operates the Manchester Art Gallery Café). This will enable this company to continue as a going concern and to make certain physical changes to the layout and infrastructure of the Café and to retain certain key employees.
The following were subsidiary undertakings of the charity:
The financial results of the subsidiaries for the period were:
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