2021-03-31-accounts

THE NGT FOUNDATION

ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Registered company number: 03444689 Registered charity number: 1064635

THE NGT FOUNDATION

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

CONTENTS

	Pages
Legal and administrative information	1
Trustees' Annual Report	2 - 4
Independent Auditor's Report	5 - 7
Statement of Financial Activities	8
Balance Sheet	9
Statement of cash flows	10
Notes to the financial statements	11 - 17

THE NGT FOUNDATION

Legal and administrative information

The NGT Foundation was incorporated in England and Wales as a company limited by guarantee on 30 September 1997 (company number 03444689). It is registered as a charity with the Charity Commission (number 1064635).

Registered Office: The NGT Foundation Trafalgar Square London WC2N 5DN Trustees: The names of the Trustees who served during and since the year end are given below. David Marks (Chairman) Dr David Landau Nicholas Baring (resigned 13th July 2020) Katrin Henkel Daniel Peltz Catherine Bedford (appointed 13th July 2020) Bankers: Coutts & Co St Martin's Office 440 Strand London WC2R 0QS Auditor: Price Bailey - Statutory Auditor 24 Old Bond Street London W1S 4AP Solicitors: Hamlins LLP Roxburghe House 273-287 Regent Street London W1B 2AD Managing agent: Ashdown Phillips & Partners Ltd Pippingford Manor Nutley East Sussex TN22 3HW

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THE NGT FOUNDATION

Trustees' Annual Report (incorporating the Director's report)

Structure, governance and management

The Trustees submit their Trustees’ Annual Report, which includes the Directors' Report for Companies Act purposes and the audited financial statements of the NGT Foundation for the year ended 31 March 2021. The Trustees’ Annual Report has been prepared in accordance with the provisions applicable to small companies entitled to the small company’s exemption, including the exemption not to include a Strategic Report.

The NGT Foundation ("the Foundation") is a public benefit entity which is governed by a Board of Trustees. Power to appoint new Trustees is exercisable by surviving or continuing Trustees. Trustees are normally appointed for a period of five years with the possibility of reappointment. They are fully briefed on the objectives of the Foundation and their role as Trustees as part of their induction. Further training is available as necessary.

The Board of Trustees consists of a Chairman and four Trustees, chosen for their skills and experience. The Board of Trustees is responsible for providing governance and leadership for the Foundation and for taking all important decisions. Under a service level agreement, administration of the Foundation is undertaken by staff of the National Gallery and by the managing agent. The Foundation does not directly employ any staff.

Related parties

At any point during the year there were two Trustees of the Foundation who were also Trustees of the National Gallery; and there was one Trustees who was also Trustee of the National Gallery Trust, to which a grant was made during the year. Full details of transactions with related parties are given in note 10 to the financial statements.

Risk management

The Trustees have assessed the major risks to which the Foundation is exposed and consider that adequate systems are in place to mitigate exposure to those risks where possible. The Foundation seeks to maintain its property, St Vincent House, so as to enhance its value; and to sustain, and where possible increase, rental income from tenants. A key risk is that market conditions cause the value of the property to decrease or rents to fall, but the Foundation has a planned cycle of maintenance works to maintain the property in optimum condition and mitigate this risk. It also seeks the advice of experienced professionals when negotiating any new leases or lease extensions, to maximise rental values.

Going concern

Having scrutinised forecasts in light of the revised rental settlements reached with tennants and subsequent reduction in income, Trustees are satisfied of the Foundation's ability to meet its obligations as they fall due in the period of twelve months following the date of approval of these financial statements. The financial statements have been prepared on the going concern basis.

Charitable objects for the benefit of the public

The objectives of the Foundation are to support the charitable objects of the National Gallery and to assist the National Gallery in carrying out its charitable objects by such means as shall be thought fit. The Trustees confirm that they have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the Foundation's aims and objectives and in planning future activities.

The Foundation was established with the support of a grant for the purpose of acquiring a property (St Vincent House), for the long-term benefit of the National Gallery. The net rental income from the property, after making adequate provision for property refurbishment and maintenance costs, is used to further the objectives of the charity.

The Foundation seeks to support the gallery yearly to the sum of £2m, from the surpluses generated from the investment property.

Current year activities

The Foundation's main aim at present is to keep up over time the level of support it is able to give to the National Gallery by means of grants to the National Gallery Trust. To that end the Foundation seeks to maintain its property, St Vincent House, so as to enhance its value; and to sustain, and where possible increase, rental income from tenants.

The primary challenge faced by the Foundation during 20-21 has been responding to the Covid-19 pandemic to ensure it is able to still provide the desired level of support to the National Gallery Trust. Tenants have faced understandable difficulties as a result of the pandemic and where required, the Foundation has successfully worked with them to agree temporary arrangements to both ease the finacial burden and also protect the Foundation's income streams. New protocols for accessing the building were put in place to ensure it remained safe for those working on site.

Outside of the pandemic, a number of lease events have been addressed during the year including renewing the tenancy on the second floor. We are yet to fill the Upper Ground Floor East vacancy and with the first floor also due to become vacant during 21-22, the Foundation redoubling efforts to secure new tenants.

2

THE NGT FOUNDATION

Trustees' Annual Report (continued)

Achievements and performance

Rental income for the year was at £3.0 million (2020: £3.3 million). This was offset by a loss on the valuation of the investment property of £8.1m (2020: £2.1m).

The freehold interest in St Vincent House as at 31 March 2021 was estimated to be of the value of £42.2 million (2020: £50.2 million). A market valuation was performed by Montagu Evans LLP as at 31 March 2021.

The Foundation agreed a grant from general funds of £2 million (2020: £2.5 million) to the National Gallery Trust.

The Foundation employs no staff and uses agents to manage its investment properties.

Plans for future periods

Future activities will be guided by the ongoing Covid-19 pandemic, including ensuring that the building is a safe and secure working environment, and also working in partnership with tenants to negotiate rents and recover payments where relevant.

With two expected vacancies this year (the National Gallery Company and the National Gallery), NGTF will also focus on securing replacement tenants. They are also pursuing design options to significanatly improve the approach to the ground floor entance, the main reception area and the upper ground floor waiting areas, to replace the current decor with a more modern concept.

Policies

Grant-making policy

Grants are made only with the agreement of the Board of Trustees. Grants are made to the National Gallery Trust to the extent that resources allow, to be used by the Trust for the benefit of the National Gallery, in accordance with the charity's objectives.

Fixed asset investments

The movement in fixed asset investments during the year is set out in note 5 to the financial statements.

Investment policy

The Trustees have considered the most appropriate policy for investing funds and decided that placing funds in a short-term money market deposit meets their requirement to generate income without compromising liquidity.

The investment property is largely represented by expendable endowment and valuation reserves. The Trustees review the open market value of the property annually, revalue the property to fair value and approve refurbishment works to enhance its value.

Reserves policy

The reserves policy is to ensure that the level of general reserves is adequate to meet the needs of the Foundation. The Trustees have reviewed the reserves of the Foundation. This review encompassed the nature of income and expenditure streams, the current market for rental property and the likelihood of future capital works being required. The review concluded that the current level of general reserves would be adequate to meet the needs of the Foundation, together with the £500,000 designated in previous years for property maintenance. There is no formal target set for the level of general reserves to be maintained outside this designation, but in recent years they have been maintained at around £3 million. Further information on reserves can be found in notes 8 and 9.

Fundraising policy

The Foundation understands its duty to protect the public, including vulnerable people, from unreasonably intrusive or persistent fundraising approaches, and undue pressure to donate but does not currently fundraise from the public or use any internal fundraisers or external fundraising agencies for either telephone or face to face campaigns and received no fundraising complaints during the year.

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THE NGT FOUNDATION

Trustees' Annual Report (continued)

Trustees' responsibility statement

The Trustees (who are also directors of NGT Foundation 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 charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company 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 in the Charities SORP;

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

• state whether applicable UK Accounting Standards 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 charitable company will continue in business.

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions and disclose with reasonable accuracy at any time the financial position of the charitable company 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 charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

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 company'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 information needed by the charitable company's auditors in connection with preparing their report and to establish that the charitable company's auditors are aware of that information.

This report was approved by the Trustees on 22 October 2021

and signed on its behalf by

Trustee

David Marks

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THE NGT FOUNDATION

Independent Auditor’s Report to the Members of The NGT Foundation

Opinion

We have audited the financial statements of The NGT Foundation (the 'charitable company') for the year ended 31 March 2021 which comprise of the Statement of Financial Activities, the Charitable Company Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

 give a true and fair view of the state of the charitable company’s affairs as at 31 March 2021, and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;

 have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 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.

Other information

The other information comprises the information included in the trustees' annual report, other than the financial statements and our auditor's 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.

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.

Opinions on other matters prescribed by the Companies Act 2006

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

 the information given in the Trustees’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

 the Trustees’ Report has been prepared in accordance with applicable legal requirements.

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THE NGT FOUNDATION

Independent Auditor’s Report to the Members of The NGT Foundation (continued)

Matters on which we are required to report by exception

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 the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate and proper accounting records have not been kept by the charitable company,

• or returns adequate for our audit have not been received from branches not visited by us; or

• the charitable company's financial statements are not in agreement with the accounting

• records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit; 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 directors’ report and from the requirement to prepare a strategic report.

Responsibilities of trustees

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.

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

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under the Companies Act 2006 and report in accordance with regulations made under those Acts.

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 auditor's 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 auditor's report.

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THE NGT FOUNDATION

Independent Auditor’s Report to the Members of The NGT Foundation (continued)

Extent to which the audit was considered capable of detecting irregularities, including fraud

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

We gained an understanding of the legal and regulatory framework applicable to the Charitable Company and the sector in which it operates and considered the risk of the Charitable Company not complying with the applicable laws and regulations including fraud in particular those that could have a material impact on the financial statements. This included those regulations directly related to the financial statements, including financial reporting, and tax legislation. In relation to the operations of the Charitable Company this included compliance with the Charities Act 2011 and SORP 2019.

The risks were discussed with the audit team and we remained alert to any indications of noncompliance throughout the audit. We carried out specific procedures to address the risks identified. These included the following:

Reviewing minutes of Board meetings, reviewing any correspondence with the Charity Commission, agreeing the financial statement disclosures to underlying supporting documentation, and made enquiries of management and officers of the Charitable Company. We have also reviewed the procedures in place for the reporting of any incidents to the Board of Trustees including serious incident reporting of these matters as necessary with the Charity Commission.

Management override: To address the risk of management override of controls, we carried out testing of journal entries and other adjustments for appropriateness. We reviewed systems and procedures to identify potential areas of management override risk and evaluated the business rationale of significant transactions to identify large or unusual transactions. We reviewed key authorisation procedures and decision making processes for any unusual or oneoff transactions.

We also assessed management bias in relation to the accounting policies adopted and in determining significant accounting estimates.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

Use of our 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 and its trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body and the charitable company's trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Helena Wilkinson FCA DChA (Senior Statutory Auditor)

For and on behalf of Price Bailey LLP Chartered Accountants and Statutory Auditors 3rd Floor 24 Old Bond Street, Mayfair, London WS1 4AP

Date:

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THE NGT FOUNDATION

Statement of Financial Activities (incorporating the income and expenditure account) For the year ended 31 March 2021

Note Income Investment income 2 Total income Expenditure on Costs of raising funds Investment property management costs 3 Charitable activities 3 Total expenditure Loss on investment asset 8 Net (expenditure) Net movement in funds Total funds at 1 April Total funds at 31 March 8,9	Unrestricted Expendable Total Total Funds Endowment Funds Funds 2021 2021 2021 2020 £ £ £ £ 3,013,380 - 3,013,380 3,252,716
	3,013,380 - 3,013,380 3,252,716
	(643,705) - (643,705) (632,655) (2,028,569) - (2,028,569) (2,533,717)
	(2,672,274) - (2,672,274) (3,166,372)
	(985,088) (7,090,155) (8,075,243) (2,050,000)
	(643,982) (7,090,155) (7,734,137) (1,963,656)
	(643,982) (7,090,155) (7,734,137) (1,963,656)
	6,675,660 44,708,280 51,383,940 53,347,592
	6,031,678 37,618,125 43,649,803 51,383,936
	-

All of the above results are derived from continuing activities.

The company has no recognised gains or losses other than those stated above. For full details of the prior year comparatives please see note 12.

The notes on pages 10 to 16 form part of these financial statements.

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THE NGT FOUNDATION

Registered company number: 03444689

Balance Sheet As at 31 March 2021

Note Fixed assets Investments 5 Current assets Debtors due within one year 6 Debtors due after one year 6 Investments 5 Cash at bank and in hand Creditors Amounts falling due within one year 7 Net current assets Net assets Represented by: Unrestricted funds: Designated funds 8 General funds 8 Revaluation reserve 8 Expendable endowment: Expendable endowment 8 Revaluation reserve 8 Total funds	£ £ 42,200,000 740,291 291,690 30,026 2,953,394 4,015,401 (2,565,594) 1,449,807 43,649,807 500,000 3,659,084 1,872,594 6,031,678 19,500,000 18,118,125 37,618,125 43,649,803 2021	£ £ 42,200,000 740,291 291,690 30,026 2,953,394 4,015,401 (2,565,594) 1,449,807 43,649,807 500,000 3,659,084 1,872,594 6,031,678 19,500,000 18,118,125 37,618,125 43,649,803 2021	£ £ 50,200,000 1,001,248 255,945 29,984 3,358,588 4,645,765 (3,461,825) 1,183,940 51,383,940 500,000 3,317,978 2,857,682 6,675,660 19,500,000 25,208,280 44,708,280 51,383,940 2020	£ £ 50,200,000 1,001,248 255,945 29,984 3,358,588 4,645,765 (3,461,825) 1,183,940 51,383,940 500,000 3,317,978 2,857,682 6,675,660 19,500,000 25,208,280 44,708,280 51,383,940 2020
	500,000 3,659,084 1,872,594 19,500,000 18,118,125		500,000 3,317,978 2,857,682 19,500,000 25,208,280
		43,649,807		51,383,940
		6,031,678 37,618,125		6,675,660 44,708,280
		43,649,803		51,383,940

The notes on pages 10 to 16 form part of these financial statements.

The financial statements are prepared in accordance with the special provisions relating to small companies within part 15 of the Companies Act 2006.

Approved and authorised for issue by the Board of Trustees on 22 October 2021

and signed on its behalf by:

Trustee

David Marks

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THE NGT FOUNDATION

Statement of cash flows

For the year ended 31 March 2021

		2021		2020
	Note	£		£
Cash flows from operating activities
Net cash (used by)/provided by operating activities	(i)	(331,479)		(641,392)
Cash flows from investing activities
Interest received		1,566		8,450
Net cash provided by investing activities		1,566		8,450
Change in cash and cash equivalents in the reporting period		(405,151)		(632,938)
Cash and cash equivalents at the beginning of the reporting period		3,388,572		4,021,510
Cash and cash equivalents at the end of the reporting period	(ii)	2,983,421		3,388,572
Notes to the Statement of cash flows
(i) Reconciliation of net income to net cash flow
from operating activities		2021		2020
		£		£
Net (expenditure) for the reporting period
(as per SoFA)		(7,734,137)		(1,963,656)
Loss on investment		8,075,243		2,050,000
Interest income		(1,566)		(8,450)
(Increase)/decrease in debtors		225,212		(678,607)
Increase in creditors and provisions		(896,231)		(40,679)
Net cash (used by) provided by operating activities		(331,479)		(641,392)
				-
(ii) Analysis of cash and cash equivalents		2021		2020
		£		£
				-
Cash held with commercial banks		2,953,394		3,358,588
Deposit accounts (90 days notice)		30,026		29,984
Cash held with commercial banks		2,983,421		3,388,572
(iii) Net debt reconciliation
		As at 1 April		As at March
		2020	Cash Flows	2021
Cash and Cash Equivalents		£	£	£
Cash		3,388,572	(405,151)	2,983,421

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THE NGT FOUNDATION

Notes to the Financial Statements for the year ended 31 March 2021

1. Accounting Policies

a) Accounting convention

The financial statements are prepared under the historic cost convention as modified by the valuation of certain investments and in accordance with the recommendations set out in the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities' published in 2019, the Financial Reporting Standard 102, other applicable accounting standards and the Charities Act 2011. The NGT Foundation is a public benefit entity. The Company's functional and presentational currency is Pounds Sterling.

b) Going concern

Trustees have carefully evaluated finacial forecasts in light of potentially reduced income for the year ahead caused by the Covid 19 pandemic impacting on tenants' ability to pay rent. Based on negotiations with tenants, expected costs, and the existing levels of reserves, Trustees are satisfied with the Foundation's ability to meet its obligations as they fall due in the period of twelve months following the date of approval of these financial statements. The financial statements have therefore been prepared on the going concern basis.

c) Company status

The Foundation is a company limited by guarantee. The guarantors are the Trustees named on page 1. The liability in respect of the guarantee, as set out in the memorandum, is limited to an amount not exceeding £1 per member of the company. The Foundation has availed itself of Paragraph 3 (3) Schedule 4 of the Companies Act and adapted the Companies Act formats to reflect the special nature of the company's activities.

The registered office of the Foundation is: National Gallery, Trafalgar Square, London WC2N 5DN.

d) Rental income

Future minimum lease payments receivable under non-cancellable operating leases are disclosed in note 11.

Where income is received in advance, and the NGT Foundation does not have entitlement to these resources until the services have been provided, the income is deferred in the accounts.

e) Service charge income and related property costs

Service charge income from tenants to reimburse the Foundation for property costs and the expenditure to which it relates are recognised in full in the Statement of Financial Activities.

f) Donations

Cash donations, gifts and legacies are included in full in the Statement of Financial Activities when the NGT Foundation is legally entitled to the income, when receipt is probable and when the amount can be quantified with reasonable accuracy.

g) Expenditure

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Governance costs are allocated based on the direct expenditure of the activity. These costs include the costs of statutory audit, costs associated with constitutional and statutory requirements, and reimbursed Trustee expenses. Grants payable are recognised when the grant is approved by the board of Trustees and communicated to the recipient.

No support costs are allocated to the endowment.

h) Investments

Investments comprise a freehold investment property and short-term deposits. In accordance with FRS 102 Section 16, investment properties are measured at fair value at each reporting period and all changes in fair value of the investment property are included in net income.

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THE NGT FOUNDATION

Notes to the Financial Statements for the year ended 31 March 2021 (continued)

1. Accounting Policies (continued)

Investments (continued)

This year a market valuation was performed as at 31 March 2021 by Montagu Evans LLP, Chartered Surveyors. Any surplus or deficit is included in net income/expenditure. The unrealised gains or losses are apportioned between unrestricted funds and the expendable endowment, in line with how the original cost of the property was funded.

i) Current Asset Investments

Current asset investments comprise deposits held for investment purposes with a notice period of thirty days or more.

j) Unrestricted Funds

The funds include income arising from the NGT Foundation's investments where no restriction exists as to the use of the funds. Income is recognised as it arises and is allocated as explained in the Statement of Financial Activities. Designated funds are amounts set aside out of unrestricted funds by the Trustees for specific purposes.

k) Expendable endowment

The expendable endowment fund represents a capital grant to the charity, given to enable the charity to purchase an investment property. The investment property provides the charity with an income stream for its charitable purposes. The Trustees are able to convert capital to income.

l) Taxation

The NGT Foundation is a registered charity and is therefore potentially exempt from taxation of its income and gains to the extent that they fall within Chapter 3 of Part 11 to the Corporation Tax Act 2010, Part 10 of the Income Tax Act 2007 and section 256 of the Taxation of Chargeable Gains Act 1992. No direct tax charge has arisen this year. Other taxes detailed in note 7 relate to a VAT liability.

m) Financial instruments

The Foundation's financial instruments, as defined in FRS 102 section 11, consist of investments, cash, debtors and creditors. Investments are discussed in note 1(h). The measurement of debtors is based on the anticipated recoverable value of cash or services owed to the Foundation at the end of the year. Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due. Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

Information on the NGT Foundation's overall approach to financial risk management may be found in the investments, reserves and risk sections of the Annual Report.

n) Critical accounting judgements and key sources of estimation uncertainty

In the application of the charities accounting policies, which are described above, the Trustees are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The Trustees do not consider there to be any sources of estimation uncertainty requiring disclosure beyond the accounting policies listed above. The Trustees consider the valuation of the investment property to be a critical judgement further details of the valuation are given in note 5.

2. Investment income

Investment income
Rental income Service charge income Other costs recharged to tenants (insurance and electricity) Interest on UK cash deposits and overdue rent	2021 2020 £ £ 2,586,269 2,747,361 377,931 447,363 47,615 49,542 1,566 8,450
	3,013,380 3,252,716

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THE NGT FOUNDATION

Notes to the Financial Statements for the year ended 31 March 2021 (continued)

Investment income (continued) Interest on UK cash deposits and overdue rent Interest on 90-day notice account Interest on special reserve account Interest on overdue rent 3. Expenditure Direct Support Costs Costs £ £ Investment management activities 634,639 9,065 Charitable activities 2,000,000 28,569 2,634,639 37,634 Investment management activities Service charge expenditure Other costs recharged to tenants (insurance, electricity and other costs) Property management costs Administrative costs Charitable activities Grants to the National Gallery Trust	Direct Support Costs Costs £ £ 634,639 9,065 2,000,000 28,569	2021 2020 £ £ 43 180 1,221 7,590 303 520
		1,567 8,290
		Total Total 2021 2020 £ £ 643,705 632,655 2,028,569 2,533,717
	2,634,639 37,634	2,672,273 3,166,372
		2021 2020 £ £ 412,075 494,343 48,911 67,070 109,267 58,857 64,386 3,966
		634,639 624,236
		2021 2020 £ £ 2,000,000 2,500,000

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THE NGT FOUNDATION

Notes to the Financial Statements for the year ended 31 March 2021 (continued)

Expenditure (continued)

Support costs and Governance Auditor's remuneration Fees payable to the charitable company's auditor for the audit of the annual Financial Statements Cost of professional valuation of investment property National Gallery accounting and administration fee	2021 2020 £ £ 6,434 6,636 2,500 2,500 28,700 33,000
	37,634 42,136

Support costs are allocated in proportion to the direct costs in each area.

4. Staff costs and Trustees' remuneration

NGT Foundation does not employ staff directly. During the year ended 31 March 2021 services were provided by the National Gallery at a charge of £28,700 (2020: £33,000).

The Trustees neither received nor waived any remuneration for their services during the year (2020: £nil). No Trustee travel expenses were reimbursed during the year (2020: £nil).

5. Investments

Fixed Assets

UK investment property	Cost At valuation At valuation 2021 2021 2020 £ £ £ 22,209,282 42,200,000 50,200,000

A desktop market valuation of the investment property was undertaken by Montagu Evans LLP, Chartered Surveyors, as at 31 March 2021 which shows the overall value decreased by £8m from the prior year (2020: £2.05m decrease).

This fall in value is in part due to a reduction in income resulting from tenant vacancies, and the associated vacancy costs related to that space prior to reletting. Furthermore, the expected rental value on the vacant office space has been reduced in line with current Market Rents and the interest received to date in the marketing of the space.

In addition, there are a number of leases with relatively short unexpired terms, with the uncertainty associated with upcoming lease expiries and break options factored into the valuation with a slight outward shift in the capitalisation rates adopted on the future income to reflect the uncertainty on the future income associated with that accommodation.

Current Assets

urrent Assets
	2021	2020
	£	£
UK current asset investments	30,026	29,984

Current asset investments comprise deposits held for investment purposes with a notice period of thirty days or more.

6. Debtors Trade debtors Prepayments and accrued income Prepayments and accrued income Amounts falling due within one year Amounts falling due in more than one year	2021 2020 £ £ 900,492 987,513 131,489 269,679
	1,031,981 1,257,192
	2021 2020 £ £ 740,291 1,001,248 291,690 255,945
	1,031,981 1,257,193

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THE NGT FOUNDATION

Notes to the Financial Statements for the year ended 31 March 2021 (continued)

7. Creditors

Amounts falling due within one year: Other creditors Accruals and deferred income Other taxes	2021 2020 £ £ 2,058,120 2,549,417 496,848 782,761 10,626 129,647
	2,565,594 3,461,825

Other creditors includes an amount of £2m (2020: £2.5m), being the grant payable to the National Gallery Trust. There are no creditor balances that are due in more than one year; all balances are payable within one year.

The movement on the deferred income balance in the year was as follows: As at 1 April Amounts released from previous years Income deferred in the current year As at 31 March	2021 2020 678,205 713,056 (678,205) (34,851) 372,774 -
	372,774 678,205

Deferred income relates to rental and service charge income that is invoiced to tenants quarterly, in advance. The income relating to the first quarter of the next financial year, which is billed in March, therefore needs to be deferred, so that it is recorded in the financial period to which the rent and service charges relate.

8. Funds

Unrestricted funds: Designated funds - property maintenance reserve General funds Revaluation reserve Total unrestricted funds Expendable endowment: Expendable endowment - general Expendable endowment - revaluation reserve Total expendable endowment Total funds	Balance at 1 April 2020 Income Expenditure Loss on revaluation of investment property Transfers between reserves Balance at 31 March 2021 £ £ £ £ £ £ 500,000 - - - - 500,000 3,317,978 3,013,380 (2,672,274) - - 3,659,084 2,857,682 - - (985,088) - 1,872,594
	6,675,660 3,013,380 (2,672,274) (985,088) - 6,031,678 19,500,000 - - - - 19,500,000 - - 25,208,280 - - (7,090,155) - 18,118,125
	44,708,280 - - (7,090,155) - 37,618,125
	51,383,940 3,013,380 (2,672,274) (8,075,243) - 43,649,803

The expendable endowment fund represents a capital grant to the NGT Foundation which enabled it to purchase Saint Vincent House and the gain attributed upon revaluation.

Prior year Funds note

Unrestricted funds: Designated funds - property maintenance reserve General funds Revaluation reserve Total unrestricted funds Expendable endowment: Expendable endowment - general Expendable endowment - revaluation reserve Total expendable endowment Total funds	Balance at 1 April 2019 Income Expenditure Loss on revaluation of investment property Transfers between reserves Balance at 31 March 2020 £ £ £ £ £ £ 500,000 - - - - 500,000 3,231,630 3,252,716 (3,166,368) - - 3,317,978 3,101,640 - - (243,958) - 2,857,682
	6,833,270 3,252,716 (3,166,368) (243,958) - 6,675,660 19,500,000 - - - - 19,500,000 - - 27,014,322 - - (1,806,042) - 25,208,280
	46,514,322 - - (1,806,042) - 44,708,280
	53,347,592 3,252,716 (3,166,368) (2,050,000) - 51,383,940

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THE NGT FOUNDATION

Notes to the Financial Statements for the year ended 31 March 2021 (continued)

9. Analysis of net assets between funds

Analysis of net assets between funds
Unrestricted funds Expendable endowment Total funds Unrestricted funds Expendable endowment Total funds	Fixed Net current Net current Total assets assets liabilities 2021 £ £ £ £ 4,581,875 4,015,401 (2,565,594) 6,031,682 37,618,125 - - 37,618,125
	42,200,000 4,015,401 (2,565,594) 43,649,807
	Fixed Net current Net current Total assets assets liabilities 2020 £ £ £ £ 5,491,720 4,645,765 (3,461,825) 6,675,660 44,708,280 - - 44,708,280
	50,200,000 4,645,765 (3,461,825) 51,383,940

10. Related party transactions

Details of related party transactions for the year ended 31 March 2021 are shown below. Comparative balances for the prior year are shown in italics against each related party.

Related	Nature of relationship	Nature of relationship	Nature of relationship	Nature of relationship			Year	Value of income in	Value of expenditure	Outstanding	Nature of transactions	Nature of transactions	Nature of transactions	Nature of transactions
Party								year	in year	balances due
										(to)/from at year
										end
								£	£	£
National	The National		Gallery Company Ltd is				2020-21	77,139	-	-	Rent	and	service	charge
Gallery	a wholly owned			subsidiary		of the					paid to the		Foundation by
Company	National	Gallery		Trust,	a	related					the related party.
Ltd	party.
							2019-20	222,634	-	(47,135)
National	At any	one	time	during the year,			2020-21	-	2,000,000	(2,000,000)	Grant	paid	to the	related
Gallery	three	Trustees		of	the	NGT					party.
Trust	Foundation were also Trustees of the
	National	Gallery Trust.
							2019-20	-	2,500,000	(2,500,000)
The	At any one time during the year, two						2020-21	767,599	28,700	(79,691)	Rent	and	service	charge
National	Trustees of		the	NGT	Foundation						paid by the		related	party to
Gallery	served as Trustees of the National										the	Foundation;		annual
	Gallery.										accounting fee and			security
											patrol	charges paid		by the
											Foundation		to the	related
											party.
							2019-20	877,719	33,000	227,993

There were no other related party transactions (2020: Nil).

11. Future lease payments receivable

Future minimum lease payments receivable under non-cancellable operating leases: no later than one year later than one year and not later than five years later than five years Total future minimum lease payments receivable under non-cancellable operating leases	2021 2020 £ £ 1,442,825 2,733,989 6,246,420 5,022,517 3,962,969 8,225,000
	11,652,215 15,981,506

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THE NGT FOUNDATION

Notes to the Financial Statements for the year ended 31 March 2021 (continued)

12. Prior Year Statement of Financial Activities For the year ended 31 March 2020

Income Investment income Total income Expenditure on Costs of generating funds Investment management costs Charitable activities Total expenditure Loss on investment asset Net expenditure for the year Net movement in funds Total funds at 1 April Total funds at 31 March	Unrestricted Expendable Total Funds Endowment Funds 2020 2020 2020 £ £ £ 3,252,716 - 3,252,716
	3,252,716 - 3,252,716
	(632,655) - (632,655) (2,533,717) - (2,533,717)
	(3,166,372) - (3,166,372)
	(243,958) (1,806,042) (2,050,000)
	(157,614) (1,806,042) (1,963,656)
	(157,614) (1,806,042) (1,963,656)
	6,833,270 46,514,322 53,347,592
	6,675,656 44,708,280 51,383,936

17