ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
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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 2022
Trustees
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Trustees' Report
For the Year Ended 31 March 2022
The Trustees present their annual report together with the audited financial statements of the Charity and Group for 1 April 2021 to 31 March 2022.
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 financial statements of the charitable company comply with the current statutory requirements, the requirements of the charitable company's governing document and the provisions of the Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2019). Since the Trust and the Group qualify as small under section 383 of the Companies Act 2006, the strategic report required of medium and large companies under The Companies Act 2006 (Strategic Report and Director's Report) Regulations 2013 is not required. The Trustees who served during the year were: John Williams (Chair) Timothy Entwistle (resigned 5 November 2021) Thom Hetherington James Mycock Richard Pulford (appointed 7 May 2021) Julian Sandbach Petra Van Den Houten Helen Taylor-O'Brien (resigned 18 June 2020)
Objectives and activities
a. Policies and objectives
Manchester City Galleries Trust is an independent Trust raising money to support the projects and programmes of Manchester Art Gallery.
The Trustees measure the success of the Trust by its financial performance, along with the Gallery’s civic impact. The latter is reported to Manchester City Council Galleries Committee annually and this report, and feedback from the Committee, is shared with Trustees. Positive performance in turn provides additional resources for the Trust to further its objectives. During the year the Trust had one trading subsidiary: Manchester Art Gallery Trading Company Limited (company number 04465391). Manchester Art Gallery Trading Company Limited This company operates the Manchester Art Gallery Café and venue hire business. Profits, when available, are gifted to the Trust. The directors of this company are: Amanda Wallace Robert Moss Thom Hetherington Timothy Entwistle (resigned 5 November 2021) Charles McKenzie (resigned 13 August 2021) Paul Hindle Andrew Palmer (appointed 14 December 2021) Stuart Wood (appointed 14 December 2021)
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Objectives and activities (continued)
b. Activities and achievements
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.
In 2021/22, payments were made from the Trust to support the gallery’s programme as follows: • £130,917 fundraising contribution to the core programme, paid up as agreed to MCC at the end of the year; The year ended 31 March 2022 was still impacted by the Covid-19 pandemic and by its financial implications. The gallery reopened to the public on 19 May 2021 following national lockdown. Initially the gallery opened on reduced hours (Wed-Sun), reopening on Tuesdays at the beginning of the 2022/23 financial year. Monday closure continues and will do so for the foreseeable future. During the pandemic, a significant amount of activity continued either behind the scenes or online. No Development staff were furloughed due to being Manchester City Council employees, meaning that fundraising continued throughout. Fundraising focused on increasing online donations and preparations for increased on-site giving on re-opening, retaining Patrons and Friends, and making applications to the Culture Recovery Fund (DCMS) and other emergency funds. These activities were still prominent at the beginning of 2021/22. The Trustees continued to meet remotely, and then in person from July 2021. Major projects supported by the Trust in 2021/22 included: Grayson Perry’s Art Club. Originally scheduled to open in Autumn 2020, following the success of Channel 4’s Grayson Perry’s Art Club, the exhibition finally opened following lockdown in May 2021. The Trust secured sponsorship from Swan Films and Channel 4 and brought together a group of exhibition donors, supported by Trustee Thom Hetherington. Trading Stations: How Hot Drinks Shape Our Lives. An exhibition drawing on the gallery’s design / decorative arts collection that explores the sometimes troubling history of tea, coffee and hot chocolate. The exhibition included a tea house event space and a substantial programme of community events. Out Of The Crate. A continuation of the sculpture exhibition which opened prior to the Covid-19 pandemic, extended due to lockdown. What Is Manchester Art Gallery? A new introductory gallery that explores the gallery’s history and collections. Climate Justice. A collection display, developed and selected by a group of climate activists and artists. This exhibition has been accompanied by a wide ranging programme of events and activities and continues until February 2023. Constellations: Care & Resistance. Also originally scheduled for an earlier opening date, this active research space, which supported artist Jade Montserrat in creating a new work, was part gallery, part studio with the artist's works shown alongside works selected from the gallery collection. The project was co-curated by Curatorial Trainee Nikita Gill. The exhibition will continue to December 2024.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Objectives and activities (continued)
Suzanne Lacy: Uncertain Futures. Throughout lockdowns, the Gallery continued to work with artist Suzanne Lacy on a participatory project that explored the issues faced by older women in relation to work. Installed during lockdown, the exhibition opened in May 2021, and has been refreshed to include new work produced as part of the project, and continues until December 2024.
Early Years programme. The new ground-floor Clore Art Studio (The Lion’s Den) opened in May 2021, offering priority activities for families with babies born during lockdown and Afghan refugee families housed in the city’s hotels. Children and Young People. Wellbeing work developed during lockdown and in response to the Black Lives Matter movement continued, offering sessions for priority schools. This included schools’ sessions focused on 19th Century African American abolitionist, Sarah Parker Remond and her campaigning in Manchester which has become a core session offered to Manchester schools. Communities. Extensive work continued at Platt Hall as part of Platt Hall In-Between. Demand has begun to outstrip capacity and this work and it remains a fundraising priority. The Derek Jarman Pocket Park was created as an engagement project and legacy of the Derek Jarman: Protest! Exhibition (2 December 2021 - 10 April 2022). Designed with a group of older LGBT+ volunteers in partnership with the LGBT+ Foundation, the garden takes inspiration from Jarman’s garden in Dungeness and is a permanent installation at the front of the gallery. This project attracted a significant number of charitable grants and donations. Health & Wellbeing / Social Prescribing. Manchester Art Gallery continues to work with the Robert Darbishire Practice to develop and deliver a programme of socially prescribed activity that takes place at Platt Hall. During 2021/22 this has focused on pre-diabetes support. Room To Breathe opened on 2 April 2022 and is an experimental space that uses two artworks from the collection to promote slow, mindful viewing. It is providing a site for research with Goldsmiths on how art can impact well-being. This project will continue until 2025. Work with schools and young people that addresses the impact of childhood trauma has become a core area of activity for the Learning Team and this work has been developed and delivered across the year. Health & Wellbeing work is a priority for future fundraising. Web and digital. A new website was developed during the period, while the increased social media activity developed during lockdown has continued.
Fundraising
a. Overview
2021/22 has been a period of recovery for the gallery following the impact of lockdowns, financial loss and implementation of emergency measures across the business.
Final Spend of Emergency Funds Emergency grants, most notably the Department for Digital, Culture, Media and Sport/Arts Council England Culture Recovery Fund, secured in 2020/21 were fully spent during 2021/22. The grants secured the financial viability of Manchester Art Gallery Trading Company Limited which was able to remain viable and which saw immediate recovery in income following re-opening. This would not have been possible without the emergency investment.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Fundraising (continued)
Onsite Donations
In preparation for re-opening we installed new cash donation boxes and two contactless donation points. On-site donations proved particularly healthy in the initial opening period and have remained high. Online Donations Online donations, which saw a significant increase in the previous year during closure and during the run of Grayson’s Art Club (prompted by a donation ask as part of the ticketing process) decreased following the closure of the exhibition and a return to un-ticketed entry. The development of the new website has prioritised fundraising and prompts online giving. Friends and Patrons Friends memberships increased significantly on re-opening, prompted by the opportunity for Friends to pre-book tickets for Grayson’s Art Club. Many of these memberships, however, were one year payments rather than direct debits, and a large number were non-local people, unlikely to become long-term members. We plan to launch a membership campaign in 2022/23. Patron membership has remained constant during the year. Friends and Patrons enjoyed a programme of online talks replacing gallery events during lockdowns which have proved popular enough to continue alongside in-person events. The online events are being managed and delivered by a group of volunteers. Gifts from Individuals The Manchester Contemporary Art Fund are a group of individuals who donate annually for the Gallery to acquire works for the collection from the Manchester Contemporary Art Fair. The scheme was set up and is managed by Trustee and Director Thom Hetherington. In the absence of a 2020 Art Fair, the group contributed to fund the Grayson’s Art Club exhibition in 2021/22 and returned to raise funds for three acquisitions from the 2021 Manchester Contemporary. Legacies Promotion of legacies was not prioritised during the year. One small legacy was received. Business Partners All existing Business Partners returned in 2021/22. A full re-assessment of the scheme is still required if membership is to grow, although with the current financial uncertainly amongst businesses, this is currently not a priority. Trusts and Foundations The number of submissions to Trusts and Foundations remained high during 2021/22, primarily due to having a strong Development Manager in post, whose time was focused almost entirely on grant-writing to fund planned activity. This remains the most lucrative area for fundraising and will continue to take priority over other forms of fundraising. Staff The team still has low capacity given the size of the organisation and annual budgets. In order to address limited capacity, the Head of Development and Development Manager continue to have support from members of the Learning and Engagement and Curatorial teams in making additional grant applications. The Development Manager (full time), Friends Coordinator (full time) and Head of Development (part time) are employed by Manchester City Council. In addition, a freelance accountant works for the Trust on flexible hours.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Fundraising (continued)
b. Priorities for fundraising 2022/23
Given the cost of living crisis and likely financial situation we face in 2022/23, the focus will continue to be on stabilisation of existing priority activities, budget-relieving and unrestricted income. In addition to securing public funding and making Trust and Foundation applications, we will focus on philanthropy, building on the commitment we have seen from our Friends and Patrons schemes and developing our relationships with individual donors.
Priority will be given to securing funding to support:
∙Capital fundraising to support a major programme of rationalisation and repairs to the three buildings (Manchester Art Gallery, Platt Hall, Queen’s Park) with a focus on improving collection storage. This will ensure that we address long-term neglect of the building fabric and that we have the resources needed to keep our assets safe and in good repair.
∙Core costs and delivery of mission and vision. Continuing 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. Revenue fundraising to support the hyper-local engagement that has proved so popular through Platt Hall In-Between and meet the high demand for activity.
∙A development of the work to re-think and re-display our collection, informed by the capital work and addressing current social and political issues.
∙Ongoing programme of exhibitions in the new Fashion Gallery (opening October 2022), a dedicated space for changing exhibitions from the gallery’s important costume collection.
∙We will continue to secure funding for the gallery’s Learning and Engagement programme.
Financial review
a. Review of the year
During the year ended 31 March 2022, the Group’s income amounted to £1,394,993 (2021: £1,387,558).
The Group's expenditure for the year ended 31 March 2022 amounted to £958,147 (2021: £628,007). The net surplus for the year amounted to £436,846 (2021: £759,551). As at 31 March 2022, the Group had total funds of £1,487,659 (2021: £1,050,813) of which £511,211 (2021: £639,966) were restricted funds. At the year end the Group held £1,593,675 (2021: £1,014,072) in liquid assets. As at 31 March 2022, the Trust had total funds of £1,298,127 (2021: 793,766) and £1,173,967 (2021: £716,487) in liquid assets. During the year ended 31 March 2022, Manchester Art Gallery Trading Company Limited reported a profit after tax of £361,738 (2021: £151,782) and as at 31 March 2022 the company had net assets of £109,569 (2021: £66,588). Manchester Art Gallery Development Company ceased trading on 31 March 2021 with its activities being transferred to the Trust.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Financial review (continued)
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 £225,000 should be maintained.
c. Going concern
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. Investment policy
The outstanding loan of £14,557 from Manchester City Galleries Trust to the Trading Company was repaid during the year.
The balance of the Trust’s funds are currently held in a non-interest bearing bank account following transfer of funds to a new bank. The Trustees are considering options for a transfer of some funds to a deposit account.
Structure, governance and management
a. Constitution
The 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.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Structure, governance and management (continued)
c. Organisational structure and decision-making policies
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 and some members of the Events Team are employed by Manchester Art Gallery Trading Company Limited and all trading business is recorded through this company.
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 meet monthly 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 Trading Company Accountant and the Head of Commercial. These key managers attend and contribute 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.
d. 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. Regular updates on gallery business are sent to Trustees and opportunities for training are offered. Trustees are expected to take part in gallery activities – attending exhibition previews, all-gallery training etc. and engage in the wider cultural life of the city.
e. Related party relationships
The Trust holds the entire issued share capital of Manchester Art Gallery Trading Company Limited and co operates with Manchester City Council in pursuit of its charitable objectives.
Transactions between the Trust and Trading Company are shown in note 26 to the accounts. Trading profits (when available and net of earlier deficits) of the Manchester Art Gallery Trading Company Limited have been gifted to the Trust.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Structure, governance and management (continued)
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 our exposure to the major risks.
The principal risks affecting the Trust and the Group are the dependence on fundraising (grants, donations, memberships and sponsorship) and the popularity of the 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 potential opportunities that arise from the 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 is critical to the company’s business. The directors and senior management take 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, the Trustees are not aware of any other factors that will impact the future performance of the Trust and the Group.
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, capital projects, 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.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.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
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
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)
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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
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.
In auditing the financial statements, we have concluded that the Trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent charitable 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 Trustees with respect to going concern are described in the relevant sections of this 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)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Trustees 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.
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.
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.
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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)
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:
Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
∙The nature of the industry and sector in which the group operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
∙The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.
∙Supporting documentation relating to the Group's policies and procedures for:
- Identifying, evaluating, and complying with laws and regulations - Detecting and responding to the risks of fraud
∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
∙The legal and regulatory framework in which the Group operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, Charities SORP, Charities Act 2011, Charity Commission, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption.
Audit response to risks identified Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
∙Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
∙Enquiring of management about any actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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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)
We have also considered the risk of fraud through management override of controls by:
∙Testing the appropriateness of journal entries and other adjustments.
∙Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
∙Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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. 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 2022
Page 16
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Registered number: 03053689
Consolidated Balance Sheet
As at 31 March 2022
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 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 2022
The Charity's net movement in funds for the year was £
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 2022
Page 19
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
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 Charity and its subsidiary undertakings. The results of the subsidiaries are consolidated on a line by line basis.
The Charity 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.
In deciding to prepare the financial statements on a going concern basis, the Trustees have considered all available information regarding the future for a period of at least 12 months from the date of approval of these financial statements. The Trustees are satisfied that the going concern basis adopted in the preparation of these financial statements is appropriate and that the Group 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 2022
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.
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 and government 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.
Page 21
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
2.Accounting policies (continued)
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.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
2.Accounting policies (continued)
Investments in subsidiaries are valued at cost less provision for impairment.
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.
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
2.Accounting policies (continued)
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.
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.
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 2022 of £315,948 (2021: £127,868). 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 £122,253 (2021: £97,086).
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
Page 25
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
Page 26
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
Page 27
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
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 2022
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 2022
Page 30
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
Page 31
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
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 2022
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 2022
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 2022
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 2022
Page 36
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
Page 37
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
Page 38
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
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 £7,050 (2021: £6,387). Contributions totalling £1,577 (2021: £949) were payable to the fund at the balance sheet date and are included in creditors.
Page 39
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Manchester City Galleries Trust
(A Company Limited by Guarantee)
Notes to the Financial Statements
For the Year Ended 31 March 2022
The following were subsidiary undertakings of the Charity:
The financial results of the subsidiaries for the year were:
Page 40
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