Registered ttumber: 03801729 Ch8rity number: 1078804 The Art Acaden)y (A Company Limlted by Guarantee) Trnstees, Report and Financial Statements For the Year Ended 31 August 2021
The Art Academy {A Company Limited by Guarantee) Contents Page Reference and 4dmiui5trBtiY¢ d¢tsiJs of the chlty. its TnJsTees attdadvisers Tru5tees'report Illdcpclldent auditors, teport ott tbe fijjancial ststements Statetneoi of fiDl41 activiti 8-10 Ba13DCt sheet 12 Ststement ofG¥h flow$ 13 Notes to the fillan¢iaJ stst¢tnents 14-28
The Art Academy (A Company Limited by Guarantee) Reference Ond AdmiDRstrAtlve Details of the Ctsarlty. its Trustees and Advisers For the Year Ended 31 August 2021 Trustees D J Fenttell M R C Gerb"$ KGordon (appoilltsd 8 Decemb¢r 2020) PJ Harris PRKulli¢h J C Littl¢r DJ A WrigtrLt Company rwstered Dumber 03801729 Cbarlty reRL8tered knutDber 1078804 165a BoTOUBh High Street Lonth)n SEI IHR cOmnY $etr¢i4ry S M A Zahedi Key M¥ll4gemeDtPer8onnel Rob Pepper. Thincipal Su¢ Spaull- Diteclor of Programmes Hatiiet Wheeler- Director of Operations Sophie Singh- Ditlor of Developn2eJJts DHTren Ngim. Director of A¢tl¢ Quaiiry. StaLdard8 attd Student Exp¢TiaKe Independent gxditors UHYKeLLP Chartered Accountants Statutory Auditors ROM Square Sittingboume Kettt MEIO 4BJ B¥llkeT5 NalW¢5t Bank Plc 250 Bishopsgate Spiiaifsel(Ls )ndo EC2M 4AA Page I
The Art A¢8detDy (A CompADy Llmlted by Gu&rnntet) Trustees, report For the y¢#r ended 31 August 2021 The TrlJstsespresentthe annual report tog¢th¢rwith the audited finattcial s(aiements of thc Chlty for the year I Septsmber 2020 ro 31 Augllsl 2021. The Atmual Report setves the putPOS¢5 of aTste25, report attd a direclors, rcport uadcr company law. The Ttte ¢onfirtn that the Anllual Report attd fillancia] staiements of th¢ charitable compxlly Comply with thc curr¢nt Statytory Tequirements. Ibe requir¢m¢nts of the charitable companys govu8 document 8tLdth¢ PTOVi$iOllS of the Statsmentof RecomrnerLded PrnGlic¢ ISORP) applitable 10 charities preparing tb¢ir accouDts ill aecoTthce with ikne Financial R¢porfing Standard 3pplicable iu the UKattdR¢public ofIr¢la1 (FRS1021 (effe¢iive l Janu 2019). Sinee the Chlty qualifies as small under section 382 of tbe Companies Act 2006. thc Strategic Retx)rt required of tlledium artd large eompanies under tbe Companies Aci 2006 (Strate¢ R¢port Hnd DirectQf5' Report) Kegulaiions 2013 bas bg¢n ornitt¢d. STRUCTURL COVEIINANCE AND MANAGEMENr Goverllittg do¢um¢nt The Art Academy is r¢gisred ¥ a Chatitable conjpally limited by guaTaDtee 3nd was set up by a Tnjst deed. Th¢ charity'5 ru1¢5 of governaDce are sct out in it5 mernordndum aDd articles of &%sociation. tn the ¢vcnt of th¢ comp2nywlllg up, the liability of i15 tnetllba5 15 littiiied to payiog in £10 cach and this oblig&tiOll CDtitillues 10 hold for ayear following arly r¢5i&L&tion. TheotLly tberS are th¢ trns¢ee5. org4ni8at1o] $tru¢tllre The Art AcaO¢tny is l¢d by RobertPepper&s Prittcip81, and its executivet¢8Tn ttwie up of Sue Spaull. Director ofProgr3nun¢5', Darr¢n Nairn, DiTe¢ior ofAcadcmi¢ Qu81ity, Standard5 a[ Student Experience., Sopbie Siagtl, Diwtorof DEveloprnent & HaJtiet Illkeeler, Dir¢Gtor of Operations. They are support¢dby a llRDagellKlll team ofRebecca Kujjzi, Academic Course MatW¥ Zuzaua Knigbiova. Public Progratnrne Mauager. Shirlcy Wang, Fin8D¢e Controller {ceaSedeTrloyM#rtt at the A¢adcmy in May20221., JAtne5 Ktughi. Facilities Mamager aJ)d Emma Collills, Matkelillg & ComsJJuttications Mallag¢r. LizAdekunle jou]ed The Art A¢adcmy IJJ January 2022 N5 Directorof Operations Imthmity coverl. Lucy Grey jOSllEd &8 Fittan<e Director in March 2022 Method5 of ppoititJwllt or elettlox of Trustees Tns are advised Df their duties as well as the history dpresent Sittion of the ¢haTitybefore they join thc bo4rd. Po]irles and prntedwtj adopted for the ADdllctloD and trjithg of tru8t¢es Trainittg and i]Jduction ss fornew butwill depelld i)tt their existing experience. Wh¢r¢ ¢s5ry illduction will ptovilktraitsing on charity legal 8nd financial Thattcr5. All rtew knjstees 11] be gven a tour of the Acttdemy attd the chanc¢to rn¢ Staff and soldents. AII rrnsiees ar¢ provided wrth Copies of policie4 pmcedutts, minutes, a¢¢ouDts, budgets? plalls and oth¢r documents that ¢h¢y will lleed 10 uodertake their role as tN5te¢5. As Ghanges to the board of knjstees are Infreq1 indu¢tiontettd8 to be done infonllally and IS tailored specifically 10 tbe ittdivxdual. pollcy for key man¥gewtryt IitrsohiDel Are]nUOn committ¢c wth Th¢mkrs of theboard of trustees has now be¢n Set up will txheet to set the paypoliey for key p¢rsoDnel. Relted pArty rel•tioD5hip8 Ai ea¢lL knjslecsmeeting day lat¢d pty th[tUlOtt is disclosed. Page 2
The Art Academy (A Comp2ny Limited by Guarnntee) Thistse5' report For the year ended 31 August 2021 Risk m4NAgement Th¢ trnsttts have a duty to idetLtify aDd TCVi¢W the risks to which the clwity i5 ¢xpos¢d and to eDSure appropriate¢oJJtroJs AT£ in ple to provide reasoJ)abJe as$urw¢ awnst fraud and error. Ma[LaMe[tI wnduct an ajjllual risk 0$5¢55DWJt and TrgoI1Y(OMMUtiiC1t¢ ¢b¢irfjoditLgs to trustees Inmeetll8. The safety of the studellts is r¢vi¢wed re8u]atly by the A£aderny's Facilities. Health & Safety Cenlltiittee, its DirectorofOperatioD5. Fa¢iliti¢s Managcr. Te¢[l¢lls. 2lld Tutor5. Jndividual student tAiDillg in the use ofhazardou5 mat¢rials and ina¢hiti¢ry is iecord¢d by the Twhnicians. OWKCTIVVS APID ACTJwfIES . PoIities and tsbjedivey The putpoge ofThe Art ACadY is to iJJspite alld uplift society through art and art Catio0. alld topmide acee8$ to art ¢xperietsce for ill tb¢ conujwnity. The ]Jxotto of Th¢ Art Academy is freat¢- hlastcr- tnspird. Ai To contTibute to the creation of great works of art, byprowding the highest st8rtd8rd of education to sthdcnts wishingto becotn profc$5iona] artists. by giving creative opportwjities to the wider community alld byellCOUTagiDg debate arouDd the praciite and principles of HigherEduLtion in Fin¢ ArL The strategies etnployed by the Academy to hleve its alS itLdude.' CollstatLIIy 5trivillg lo improve all its coutses. iti particularthe BA in Fitle Ar¢ in orderto train students to becornc professiollHJ artists ¢apable ofpmducing excellent work. Offetitl8 a proatle of Iwning with uniqu¢ attributes. combiDinB iDtensive Skills ti2inill8Mth creativ¢ aDdprofes5ional developmEnt. Seeking out and enga8 th¢ b¢st P05sibl¢ lutor4 resident arEiSts, tttd staffto 8UPPQrt th¢ stUdts in th¢1¢1]18. striv to its progrnmmes at all leveL8 aete8sible to th¢ wid¢5t possible audience bykeepillgaDy inCr¢tA fees to regsonable level attd offerinB flexible pa)rynerLt ternJ5 and attetldaace patterns to att0ttsTtdat¢ those on low illcotlles or students whose ctrcutik%t8ll#$ ¢hang¢ 8fter enrolm¢nL Off¢ring 5tudeDts, whell possible, burs2TieS to aid in financingthcircovrse& Operatin8 a broad op¢n admissionspolicyto ettcoutagB diversity in our 5tud¢nt Erfjdy. Creating the best learning opwriunitiC5, through apTOWUllC desiwl with the help of pmfe5sionaJ zrti8ts attd LDStibJtions aDd one thRt goedbY the higbest academi¢ stattdthrds. Broad¢nillg the outre8ch workwithiti Southwarkbyprovidingcxpert ArtAcademy bAitiO0 to101 artp5 8t1 ThrouKh the work of the litsearch. SdtR[ShIp atsd Ethics Co)itte¢ TheArt Academy will add to thediscour5¢ artyjttd the principlcs of finc art pftcticc and its relationship to higbcreduIIo PrfDeIple5 Creating euvirot¢u1 wtrLere oursDJdettts tall expe[itittt, re5eaTch, and1¢4rn from the besi academiq artiytic and philosophical practitiorters so we Gall develop visionary 3rti5ts who will bc the creative thitikers of the futtLTe. DevelopiDg creative skills. both traditional artd ¢otttemporary, to SUPPOrt a stud¢nt's fr¢edom of exptession. Pa8B 3
Th¢ Art Ataderny (A CompaDy Limited by Gll8raDttt) Trustees, report For the year ended 31 August 2021 Encouraging sNdenfS to wider5wd ad ¢on5id¢r 4u8lly th¢ wtL¢¢ption 5kilJs that have gone into (he creation of all artworks ill ally both traditional and contemporary. TrainiJJ8 every sttthnt to d¢loP a uiti¢aJ and ¥oD¢aneous creativc pmcess which allows thernto be true to their creative Vi8toL. Helping students to understand th¢ art nwket andth¢ workl ofth¢ profr4iollo1 arti#to etttble th¢m to ttteke itiformed Choices withiti their creative practice. Providing a supp)rtiv4 vibraot and ¢ck¢li¢ afti4ti¢ comrnwiity where creativity call be nurh)r. Attivitits The Art Arwl¢rnyprovid¢5 & wide-ratyging progranJtt]e of art edue8tion rooted in the vision and experience of its founding Prin¢91. con)bining Ihe Vtu¢S of a 5kiljs-bed apprenticeship with the breadth and illtellxl1 stimulation prowdcd by a London college. The $tyle of educatiott on offer requires mor¢ collwJirm¢D¢ from its tutor5 is widely available. In Seing Libje¢iiv¢s and pla[irl for gctivi114 the T[teel httve given due ¢otssideraiioL to general guidance pubIJ"shed by the Chlty CottniS510 relating public bcn¢fii including the gllid2nce ?ubJic bBnefit.' Tunllu]g a thfyrity (PB21'. Stritegles for A¢hlevlng obJerdv¢s ThB ArtA¢ademy is passionaic about chan)pioning art for all. W¢bdi¢v¢ wtyyonc Should h&ve acc to higEluality art education, with Do fintill, physical orpx8Cti¢al barriers. IEd byan execuiive that have many y¢ars of ¢xp¢rienc¢ of both prdctici]J8 art, leachillg art a[ n]Dnillg busillesses thelr knowledge filte[5 dowtt to a dynamic tnanagemeDf team and junior team and a tutor body of ov¢r 100 prncticing artists. Led byPrincip&l Rob P¢pp¢r, Th¢ Art Athrny i$ ill¢re4singJy talting a leAdexship role th clwttpioning the irnportaoce of arts education artd supponillg arts educators Dationally. t. A¢tlvltEe5 UDdert¥ken t• Achleve objectivey We offer art ¢ourse5 for ev¢ry age, leve15 of Skill and Deed- from a BA and Fourtdation Degree to evening. weekend and short courses io nuÉnerous disciplitles such as paintingj printing¥ rnetalwork& sculptute. TheTe is also awide rltig outreachpro8ratntt that brings art thlucatioL tothose that otherwisc not be able to ¢njoyth¢ b¢nefits. Socla] Investrnent pollcles Ov¢r the tsst 15 yeaTS thcre ha5 been a decline itt thettumberof Children taking arts subjeit aredu¢lion LD tuching hours. atld fewerarts tucbers employed ID schools. Beyond school, info[ll1 Proe& foryouog people bave suffered due kn cuts in bcaj tuthoriry fijnds attd services.. and in reccot ye8T8 the wid¢ rapging itnpacts of the pandemic knvebeett profoulld. Art Acadcllw London b¢liev¢s that in th¢ iJKthere is B J2pidJy iDcrt8siThg tteed forquajityarts educ101). There is Dow a large body of evidence r¢wdiD8 th¢ beocfit% of art in rcirnBwniD8 ¢ducation for the 21st Ccntury so that we caD ail build a betteT WOTId. It is thL5 cvid¢D¢e that drives us. We exist to ernpower visioTraTies in the atts to develop their own crtative practiccs and to bccome active members of their community. W¢ trach ¥rt in & way that eJDpower individua15 frotll all walks of life, at every age, sthge attd l¢vel. Wc have scets fitst-battd the effect our arts ethication can bave On? EndividuaJ'5 cre4livity, Xlf-¢5t¢ aDd vi5ioTh of 5¢1£ We have provett the success of our Otrprolln¢5 and now istb¢ titnc to reach tyre pefjple. Pa8e 4
The Art Academy (A CompaDy LIDted by Guarantee) Trllstees. report For the year ended 31 August 2021 Our 5tlldents are diverse and uttitsd by a shored etl¥)s that an art5 education is essetttial ro buildittg a better W. We take pride in having ¢du¢ated over30,000 students ov¢rthc past 20 ycars. In th¢1&8t yeat alone. during the pandetnic we tavght 3,000 51udcnts. O outreach progratZLTlle5 help Jnak¢ art education ac¢e55ible to the wider¢ottllnunity with over400 public cours¢s a year. . activilie5 undertaken to furtber the Charlty's purposes forthe pllbllc belletst The Art Academy otEers somethittgdistinrt Bnd increAsingJy rar¢'. the best of a tsaditiotta] atelier conjbined with the vibftttcy and diversity of a cotttempotary art school. Thi5 foundirlg principle still diffeTetttiates today. All ¢)ur tylors ¢ pr8ctistngartists and spe¢ialisLS itl their fields. We off¢r tuitiorL in core artistic skil]s. whi]st cbaileo8itiB Sdellts develop their0) practice itifotd byGonmporNryproces5es and theory. Wepreserve skills. whilst beJiBVillB that•rtn¢T staDds On our acad¢mi¢ courses we are proud to offerthe hi8he5t nurnb¢rof conract hours ofany higher educwion artscbool irlthe UtL In sm8]I groups. studettts are guaTaDtsed ll miDimUtn of 15 hours per week in ourBA and Foundation progrw withthe option of more. This mittimum is five tithEs the attnt rcc¢ivcd on a compatablc BA at the UK'S lau]g in5tstulions. This Person approach allows our SbJdeJJts the time to tnHster COT¢ artistic ski118 alld u]Jlock theit creative PDteDtial. We also nuj over400 short COUTses a year frotn young artists through masterclasses. ACHIEVEMENT AND PERFO]IMANCE . Math aeblevemeDts of the Ch#rity Jn 2019 ThE Art Acadellty validlltcd a s¢ri¢s of highcr educauon prOame5 akd these bave beBD 80iug well despite thecball¢Dges or the pandeic. The couTh¢5 ar¢14ading to othernew higkner JU¢tiOn ¢outse8 thtt¢ will be valid&td in 2022 in¢lwJing4 BA in ContUDporary PoLtratre. The Art Academy'8 short cout3e provision is vcry 11 rcgarded. Sitice lkne op¢niDg up i]] summcr2021 The Art AaetDy'5 summ schiK)I h&% scen thehiBhe5t re¢ord¢d Dumbus of sludents suy18 dutillg the ]Douths totalillg 752 stsjdents. Key perfOrlDre Indlc4tors The keyperformance indicators since the p8ndetiJic have beenb&s¢d 4Tound ¢nsuring ix)vncf back in a 5UStaillablc way. Over the uext year. a successfvl rewdlidationof The Art Academyby the OpenUniveJ5ity, jOiLittgthe Office foi StudeDt4 4 ll¢w website 4nd wLurinE a l¢as¢ on a new long tmn home will be key objectives in the llext plSe of The Art A£xdemy. Revlew of tIthe The Art A£ademy h95 twentyyellrs. experi¢ncr t¢king th. We know th¢value of the education we offeT. Overtwo deodes w¢bave with no gov¢rntntnt investtneni and ]imited ffiJttdratsitt& During the pattdemi¢ with the h¢lp of furlougb and supwt fromtbe Culture R¢covery Futtd we llJaLaEed to weather the slorrn and it m¢ans that w¢ll placd to wntinue our ambitiOU5 piaDS for th¢ future. The Academic Courses have seen a marked increase post pBndBmic and llutllbets will continue to rise in 2022. Th¢ Public courses contitiue to be well atteIed wtth the Erowth #TeabEing in they0W ani515 courses. Long t¢rtn build]ngus¢ continues ioE¢ a challenge with the Newittgton Librnry prenjises lthgTeDtsned to Southw8rkCouncil attd sbortterni altenJatsvepreiIiises bBing used at Red Lion Court . FKtOTS relevant to gehieve objectivtS Support for the staff, the cA)rT¢tI inYestsn¢n¢ of fid5 aad suppon from the are all televaLt factors in acbievittBtb¢ obj¢ctives. Pa8c 5
The Art Academy (A Company Limited by Guarant> Tru$tee8' report For th¢ year ended 31 Augusl 2021 FuDdri5iDg ¥divAties g¢n¢rxtiort A new large fjJrtdrai$iJhB ¢ampaiBL will be lavncbcd in thc auttunn of2022. this will b¢us¢d to h¢lp secure ture prerni5 and UJV¢5t in th¢ staff otld fabri¢ of Th¢ Art Academy. FtrÈanclal revlew GoiDg ¢on¢¢rD Aft¢T making appropriate enquirie4 the Tru5tee5 have & onable expectation Ihatthe Charity has adequ•te resources to continue in opetatiollal existence for the foreseeable fvwte. For re850D. they continue to adopt the gollJ8 concern b&siS ill preparing the fillallcial statements. Furtber detai15 regardillg the adoptsonof tbe goitig cotttern basis can bc found in the accountujg poli¢i¢5. b. Reserve5 po]iey IILe tNSC5 rcvicw th¢ cbarity's reSv¢S p)Iicy PETiodicHJly and at least oll all atujual ba515. The Art Acadny tequires Ftha]Jcial reserves to and advance its auiviiie5 and long ter airn5 and obj¢ctives. Reserves #Terequited to.. Mect operauoDal costs UJ the ¢V¢Dt of 8 sudden dowoturn ill th¢ eeoll(xny resultittK itt i sh8rp fau in fee income. Cumdy apptoxiroaiely £390.000 is ¢8rmaTked for this putP05¢. Potentially carry out capital improvements and expansion of the Academy's freeknold buiidujg. Reduc¢ the cwr¢Dt Mortgage ill the evellt of a Steep rise in illtetesi tstss. Polelltially a¢4uire additienal spacc as and wben this could be financed. ¢ Priti¢ipgl rlsk8 ADd unetrtAIDtle$ Th¢s¢ the most sigllificBnl risks that Jnay adyetsely affeci0urbusitS strategy, fillatscial posi¢ieo and fvftv¢pthrnwic¢. The risk assessment proce55 ¢valuates the probability of the risk eriAliSing and the fanCisI orstr&ley¢ impact of the risk These risk8 which have a higberprobability impo¢t on strategy, reputatior4 operations, ora financial impact greater than £l(X)k are identified as principal d. FiDancil rigk ement objectives *nd polltles The maLtt risks that thc charity is exposed to ar¢ summHri%d b¢low. hdarket risk. the art rnateria15 price inCre and reduce the gr055 Tllatgiii. Interest rate risk- the mortgage interest rdte incre&ses, due to ab&se rnte incre C&5h flow volatility- Gtattts are rejectsd resuitiDg io low SDJdent enrollnent numbers Bad dcbt- Sdlts d¢lay payTJ¢rLts The llwDagcmBnt leanL pmvide5 reglllarrq)DrL% iticludiJJ8 art anrtual bud8e¢ rcforecasl4 casb flow forecasL margin analysis and tcrt tTrgDagem¢nt accounts. Th¢ t¢am fir¢101 Ei4 th recotD]neLdatiotss attd subJJJits proposa]s for a¢iionwtrLich are approved in the TTusi¢es' mcering. Prilltiphl futtdkng Studtnts, tuitioll fees from bo(b the academic attd public £outses ate thc Aeadcmy's principal fvndillg sourc¢. Ther¢ hav¢ b¢¢n additional costs due io vaiidatioo and the establisbryKntof &JvHonordry Advi50ryCollunittee, sel up to help with longer term fiADdtaising strategies
The Art Academy (A CompaDy Limlted by GllaraDtee) Trnstees. report For the yeir ended 31 August 2021 f. Revlew of tht reslllts The tesult for the year a deficit of£19124312020.. deficit of £128,081) followitL8 aDotherdifficult ye2rduB to the wraCt of the covtD.19 paod¢mi¢. Wttilst total incotne of £1.349m is ollly slightly dovm on 202Q (£1.366ml. the trustees arevery Con10$ ill¢QTry¢ l¢v¢15 r¢main Some way sbortof tbE £1.65m I¢1 in 2019. prc-pandunsc. 2021 iticomE ineludes dollatiotLS and grants of £338k12020.. £223k}. and whi]st use of the COronavin Job Ret¢niion Scheme in thB year fell cojnparedto 2020, furth¢r grants of £68k were thankfijlly received to covcr certain staff 818 whilst some etnployees remain¢d on r]oUgh. Th¢ main 1 rtreived in the yearwas £245k from the Artg Council Ertglartd ill respect of their Culture RecoveryFund. This fjjad was sei up to help mailltsill Eugl#Dd's cuIturdl ecologyby 8UPPOrting orKaDisatioD5 hit IlD8n¢iallybyCovid-19. Core illcome from cbaritsble activities w&s dowi IOVO to £957k12020.. £1.062Ln) as aresult the reduction in fee$ frornteaching art cla55es. Ancillary illGotne also 5uffercd, with 5al¢s of art matl8]S falling tteatly 4(W/4 to £38k (2020.. £62kl. Total ¢xp¢nditur¢ forthe year was £l.540m {2020.. £1.494m}. Direct costs Rnd wBg¢5 w¢r¢ kfpt dowm in linc wilh thc reduced illcom4 with the rise in ovetsll expeudits]Ee ttributRble to iDcre8s¢ inproperty costs to £373k12020: £298k) due to hi8berrentwJd intu¢st costs. Stsff costs decreA5ed by 2•hto £501k (2020.. £514kl. Th¢ ¢HstL bai4DC¢ Ilas improved by 271/0 I£110.037) dutittgtheyearto £518,265 (2020.. £4082281. a5 th¢ result ofth¢ advatKe b(x)knn85 and panents in the audemic artd public courses for the next fjnance year 2022. PI#D5 for future perlods The Art Acadcmy has succeeded in the validation of & BA in Fine Art and Fourtdation Degrecs in Contcmpotary PoTtsaiturc atLd Sculptuie tbTOUEb pBrtnership with The Open University. This means it Low has HighK Educatioll Jllgtitutioll status. The JJ¢x¢ 5t¢p i$to apply to thc Offiec for Sbjdcnts. which iti time will ettable student loans aDd tieT4 8ponsor5hip3. The Art Academy cotsiinues to ]JJsttttaiti ils professiollal focus, gDd its ¢xt¢U8iv¢ skills provisiotl and contact Ilme provisio art funded itl partby CDlltiDuing strong detllBnd for its publi¢ courses, classe5. Str4t¢gLC plans arc rcgularlyTcvicwed by thc Exccutivc TcaTll and decided bythe TN5t¢¢5 ai bDaTd t[¢t. st•temen¢of Trustets, regpollslbllltkes Th¢T¢S {wq)o arc a]so th¢ dtrectots of th¢ Charity for the PUTpose5 of cott¥BDy lawl re¥ponsible forprepyTing the Tn]stee Repon al the fitsallcial stAte]DeDts ill actord4llce with applibI¢ Jaw4nd Unit¢d Kitlgdom AccoulltiDg Standards IUDited Kingdo General]yAccept Acwunting PrvKtic¢l. Company law r¢quires Ibe Ttee$ to prepaTe finaDciai st2tements for each financial yeRT. Uryder company IAW. th¢TTU8iees mu$t uot approve the finttscial statEmEnts unless they Hre s&tisfied thatthey givc a trnc and fairvicw of the srate of affairs of the Charity and of its incoIllg resources and applicatiorl of r¢50urr£s, including LIOMe and expend1th< for thatperiod. kn pre18 tbe finan¢iai stsllts, thc Truste¢5 att requircdto.. select 5Uitabl¢ accounting policics and then applythem coJJsistetttly.' observe themethods attdpriticiples of the chIlieS SORP IFRS 102). ake jud8tnellts and accounting estittRtcs that are reasonable and prnd¢n¢ stsie whetber applicable UK Accounting Standard5 (FRS 1021 h8vebeert followe4 subject to attyJJJatial depArtt disclosed and explained in thc financial stst¢m¢nis' prcpare the fitt8nGial slatetnents on the goiDg¢onc¢rn ba515 UDkss it 15 inappropriatc to prcsum¢ ththe alaritywiil contiDu¢ in busities$. The Trustees are Yespousible for k¢rping ed¢quNt¢ accouating record5 that sufficient TO Show and explain the Cbarity5 Iransactions and disclose with reAsonabl¢ ac¢ura¢y at any timc the financial position of the Chatity alld enable themto eosuTe that the finaocial 5tatem¢Dts Comply with the Compatties Act 2006. They are also Fe5pollsible for 5RfrguaTding the ets of the Charity and hence for takin8 rea8OtLablc step5 for the prevention ond dclion of fraud aDd oth¢r1¢gU7arlll¢$. Page 7
The Art Academy (A Comp8ny Limited by Guarantee) Trustees, report For the year ended 31 August 2021 Dlst105ure of lllformation to auditorj E4¢h of th¢pvsotss are Tnjstees at the time when thi3 ThJ5tees' Report is approved ha8 confinn¢dthat.' so far a5 that Thte¢ L5 awyrc, there 15 relevaThl audit information of which tbc Ch1t/S auditots are uttawar4 and thatTrLLStee hLs take]) all the steps thatoughrto ie been taken as aTrust¢e in ord¢rto be aware of any r¢ievant audit illfottD2tiOD aDd to estsblish that the ch2riWs auditors are aware of that illfornti0n. Audltorj IILe auditory, UHY Kent LLP, have indica*d theirwillingDe¥5 to continue in office. The desiellated Tfttste will prop)se a Jnotion reappoltitll the auditors at a oK¢lingof the TDJ5trCS. Approved by order of th¢ m¢tnb¢TS of th¢ board of Trust$ and ott their belRlf by.. Trlee Dat¢: 28 Awil 2022 Page 8
Tbe Art Academy (A CornpgDy Lln)Ited by Curantee) Independent Auditors, Report to the Members of The Art Academy (eontinued) Matters oll wbl¢h we Are requtrtd to r¢port by uception W¢ knv¢ Dothing to r4Jort ill twe¢t of th¢ followittgmattets wh¢r¢th¢ Cbaliiies (AccoUS alldReports) R¢gulatiOll5 2(X18 tequiros us to TCPOrt lo you if. itt ouropillion: the infornJatioD Biven in th¢ TThste&s' Report is irL¢OllSiSt¢nt ID any matetial re5PKt with tb¢ fmallu'at statem., or suffA¢ient a¢¢oulltill8 words have J)ot been kept,. OT the fiLancial statetnents ar¢ not in aee]llent with th¢ awountiDgrecords attd teoulls,. or we knave not tec¢iv¢d ajl the information al cxplatLotioDS we require for OUT audit. RespoDslbUlttt5 Ottru¥tees As explAined ttu)r¢ fully in the Ttee8, Re$IbilitieS SraiemenL theTntst£¢5 (who are also the thtttoys of the cbuitable cthnpany for the PUTPQS¢S of company lawl aTe responsible for th¢ prepatatioll of the fjnancial sthtemejjts and foi be8 satisfied that they give a tn aDd fairview. and for su¢h lute1 control as the TnJsteES determine is [Leceary to ettable the preparntion of financial SLtrments that are free froMXthri inisst8t¢rDcfL( whetherthjeto fr&ud orcrror. I]J prtpaTin% the financial 5tstemenls. the TnLStees are r¢5ponsibl¢ for assesslllg the chaTitabkcompanVs ab2]ity to cojjtillue as • goitig ¢oll¢ern, disclosill& as applicable. mattrTS relaltd to going concem attd usitiE the going CQLcerrL basis of atttiuntingunless the TDtstts5 either iDnd to liquidate the ¢Iritable company or to cease opefttioD4 or hav¢ no realistic allernaiivebut to do so. AdItors, responslbllltles for the lluditof the fin1 stlttmtttts We havc bcen appoititd as auditor under section 145 of the C]litieS A¢t201I andreport iti 8c¢ord2uc¢ with th¢ActandreJgv&nt regulatioJs m&de orhRving ¢ffwi thcreullder. Ourobjectives are to obtain reasonable SUr1ce about wther the fuJaJJcial slalefflellts awhole are free froLn tsiaTal mi5sratemenL whEtherdu¢ to hud or ettor. atsj to issue an AuditOTS' Repon that includes our opinion. Reasonable assurance is a high l¢vel of a55uranc4 but is not a 8uaTalltse that &uditcondwled in actoidauce with ISAS (UK) will always dele¢t a ]DateFial mi5Stateinelll wkneD it ¢xists. Misslaiemettt& can arise frotn fraud or error attd are ¢oDsidered tnat¢rial if, individually or itt the sgEr¢Eat¢, they could reasoJRbly Ixexpectlto wflu¢nc¢ the ecoJJonJic decisio of users taken on the basis of these rLcial statem¢nts. JtreEuiaTiti4 including fra are instattcrs of non-cornpliancc with laws and reBuiatlllfL5. We design pwc¢dures in linewith our responsibilities, outlined above, to detect JDalerial misslaiemerLts ill tespectof iFreEuIHTiti¢s, iD¢luding fraud. The extelltto whichour proc¢dur¢8 are capable of deteGtinE irregularitics. including fraud is detailedbEIow.' H¢yw¢hetwdit consered¢upObJeofde1e¢Iins irregularilies iocluditigfvud.. OUT 8pproAch to idenufyittg aLd assessittg th¢ risk5 of material misstate]nettt in ptOr iTregu]arities. includtugfi8ud non- complian¢c with law$ aDd reguJatioD4 w4s as foljows.. we identified th¢ laws and regulatiolls applic&bl¢ to tb¢ ctlaritablc compaty through discussioDswith managcment, and frorn our ottunetcial knowledge attd experience of the swior. f(kd on Specific laws and rcgulations w]Jith we collsidered m2yhave a direct Materi effect onthe acwullts or the otatiOuS of th¢ ¢haritsblc compatty. ClUding tbe Chariti¢8 Act 2011. wc ass¢55¢d the cxtent of romplianGE with the laws and rcguiaiiotss identified abDve through making ellquiries of managcmcnt and inspectjng cthtespoDdeDce' Bryd identified laws Ènd regulations wer¢ commutiieated withinth<Hudit t¢atD arLdth¢ team remained alert to instsn¢esofttoll- eompliallce throughout th¢ auth't. We 4sse5$ed th¢ svsceptsbility of the Gharitsble wmpatLy'S aceounts to tll8teriÉl misstatettL¢nL in¢ludmg obtwLing 8ll undwstanding of ]ntiking enquiries of m8nagemettt as to where th¢y b¥Idered therew&8 susceptibilityto fraud th¢irknowlcd8Bof actual, 5USP¢Cted and alleged fraud" at considerittg the ititerDRI controls ill place to JJJiti82ts rth of fiBvd and non-compli8]Jce with laws aDd regulatioD¥. Pag¢ 9
The Art Acade (A Company Limited by GuarAtttee) Independent Audltors, Report to the Members of The Art Acadtmy.(¢ontinued) To addres5 th¢ Iiskof frAud throughmattogement bias and oveTTid¢ of controls, we.. perfertt)edalla1LCa] procedur¢5 to id¢ntify arly uttusual or uttexpected relationstsip5' t¢sted jollrnai elltries to identify unusual transaction5; asse55¢d wtthi jUdgellllts atsd assumptioos made in det¢ryDilliDg the accouDtillgestitiJates set out in the accountsngp)li¢i¢s were indicative of poteutial bias", alld investLBaitdthe tatioDaJc bchind SiSDificant orullusual traDctIO. In rcspons¢ to thc risk of I<U1ties and non-compli¢¢ with I•w5 Hnd rc8ulation5, we desi procedures whith included. butwere ot limited to.. weeijjg fiLattcial ststemenith"sclosures to ¥nd¢rlying supportiD8 d(Kumetttstioo' r¢ading millutes of ttetings of those cbarged with govemgnct,. aDd enquiring of tnzDag¢tnenl and reprtsentaiives of TrJstees as lo actual and potential litigation and Clai$. Beoause of the inbereni limiiations of au audii there is a Iisk tbat we will not delect all irregulgrities, irlcluding those leading to a rnaterial rnisststemeDt Lrt the financial sratetnents or non-wrnpliance with Tegulation. This ftsk iacreases ibe mor¢ that COtr)plianG¢ with A law orregulation ts Tejnoved from the evellfs aod tronsa¢tiODS reflected in the fillaucial stste¢s. as we will be less likely to b¢¢omc aware of instsnt¢s of non-cofDpliaDce. The Ti5k is also greater rewding irregujwities oc¢urring due to fiaud rather than eLTor. as fraud itivolves ititeJ)tional concealmcnt, forB¢ry? collusiot4 omission or misrepresentation. A fiber deauipliOL of our responsibilities for th¢ audil of the fillallcial statements ts located on the Fin8ncial Rewtillg Council's websit¢ al.. www.frc.o .uklaudit0[e5 onst . This d¢scription fortus part of our AuditOTS' Rep)rt. Use of our Teport Thi$ report is made sole]y to the ChlbI¢ compallys t[LemrS. as abody. in accordatt¢ with Part 4 of the Charities {Accounts al Report51 Rcgulalions 2008. Our audit work has b¢¢n undertoken so that WE n]i8ht state to tbe charitable company's m¢mb¢rs thos¢ we are reqU<d to $tate them in aa AllIorS, Report and for no otherpuTpose. To the fulle51 exicnt pcnnitted by law. wc do not accept or assum¢ rc5ponsibility to aDyone otherthatt the charitable company4nd ils tu¢rnb¢r4 AS Alx)dy, forour audiLworL forthis report, or fer the opinions we hav¢ foTrned. Hieldt BSC FCA Isenlorgtatutory Audltor) for and oll bebawof UHY Ktrtt LLP Chartered Accountants ststlltory Auditors Thames House Roll)an Square SittiuBlyJurne K¢nt MEIO 4BJ Datc.. 29 April 2Q22 Page 10
The Art A£8d¢my (A Cornpany Limited by Guar8lltee) Statement Of fillancial aetivltle$ (Rlleorporfiting in£offje 4nd expendlture account) For the Year Ended 31 August 2021 As r£Ftaied Unrestrltted fund5 2021 filnds 2021 2020 Income fro Dottatioos and legBcies ChBTitsbl¢ a¢tiviti¢5 Oth¢T trwjing activities Jnve5traents 338,284 957,194 52,559 668 338,284 957,194 52,559 668 223.144 1,002.367 79,487 J.269 Total lkneomt 1,348,705 1.348.705 1,300,267 E4Jellditure UD: Raising funds Charitsbk activities 25,450 1,514.498 25.450 1.514.498 55.439 1.458.909 Totsl expeDdlttyrc 1.539.948 1,539,948 J.494,348 Net movementht fttknds 1191,2431 {191,2431 (128,081) Reton¢MlitlDn of funds: Totsl funds br¢)ugbt forward Net mov¢m¢tLi in fill$ 840.411 {191,2431 840,411 (191.243) 968,492 (128.08J) Tot•1 fllnds rrIed forw*rd 19 649,168 649.168 840.411 The Ststernent of FiDaocial Aciiviiies iutludes all 8aiDS losses re¢ogLised ill tbe year. Thc ptior year i5 reslaled merely as a result of a change in allocati(KL of expelttureWhL¢hhaS altered the split of eKpeDditure beNeett charitable expenditur¢ and expellditurc incunitig inrelation to rBising fids. Th¢rc has ell no Chauge to total expenditur¢ orthe ]Jet [wrn¢t iry fills. Th¢ llot¢5 on page5 14 To 28 formpÈrtof these financial statcment& Pa8e 11
TILe Art Aeademy (A Company Limited by Guarantee) Register¢d number: 113801729 Batnee Sheet As at 31 August 2(121 2021 2020 Note Fixed w¢ts Tallble a&8&5 14 1.746,806 1.793,316 1,746,806 1,7P3,316 Current H%sets Stocks 15 30.802 45,014 518.265 31,517 66,692 408,228 Debii)rs 16 at bank aDd in haDd 594,081 506.437 CrJitors.' attwuJ)ts faMittBdue withirL one ye8r 17 {552,876) (1,459,342) Net cvrr¢Dt aS5etsl liabilitits 4)205 52,995) Total assets less ¢urreDt Ilabllltle5 1,788,011 Creditors." falling due aftet more than onc y¢8r 18 11,138,843) Total ttet Suets 649.168 840.411 ChaTity fullds R¢5trict¢d fund5 UrLTestricled funds 19 19 649.168 840.4JJ Totsl fllDds 649,168 840,4JI Tbc Trusttts acknowledge their respDnsibilitie5 forcornplyin8 Witb tbe tequireE)wnts of the Aciwith respect lo accounting record5 and preparntion of financi81 staicmcnts. Th¢ financial $tstetn¢llts have beenprepd ill accorda2Ke with Iheprovistons applicable to ¢ntiti¢5 subj¢¢t to tb¢ stDJiI companies rewme. fanCial $tststtwits were 8pproved and authorised for issue by the Twstee5 alld signed on th¢i¢b¢half by.. P JHArrlg M R C Gtrlls Dat¢.. 28 April 2022 Tbe notes ott pages 14 to 28 fornpartof these financial statemen PoE¢ 12
The Art Ac8demy {A Company Lithitsd by Guarantee) stst¢llDt of Cash Flows For the Yer Ended 31 August 2021 2021 2020 Nott Ca$b fknyy from opergdnE actlvldei Net ¢astrL Used in operatiLB activities 21 49.690 (64, 732) Cash flors from ixvestinga¢tivitie5 Divide iDt¢T¢5t8 arArents from investments Purchw of tsDgible fixed assets 668 118,8901 J.269 (31,048) Net tash ll8ed ltt knve$tlkng attiviti 118.2221 {29,779) Ca$h from tt1VIde5 Cash inflows from newborrnwthg Repayments of boJrowin8 Interestpayable I,l80,000 {1.078.8641 {22.5671 (lJ,300) Q3.714) Net c¥h Provid byllu¥ed In) Ilnan¢ln8 8cdvltles 78,569 135.014) Cbange kn easb alld tgsh tquivfiiettts in theyear CL8hADd U1vAlents at thB bBgitminB of the ye4r 110.037 {129,525) 408228 537.753 Calh cash e4ufvnts at the end of theyear 518265 498.228 The llo onpages 14 to 28 forn part of these fitWKi41 statemettts Pa8¢ 13
The Art Aeadewy (A Cornpany Lirnitsd by Guarantee) Notes to the FiDancRal Staternents For the YeAr Ended 31 August 2021 The ArtAcademy is a charirable company Jimited by guar¥lltee. reSred ijkEn8land and Wales. Its regis*red offLee ts Mertt)aid Couo 165a Borougb Higb StseeL Lotsdott. SEI IHR. The Datur¢ of th¢ Qbaritys operBtiOD4 and its princlpal acttvity is to SPIre and up]ift swiety througb art and an education. and to provide acctss to an experience for 811 the communiry. Accolltttittg polities 2.1 B4515 of PrT•tion of finllnciil ststementS The fina787 s(atements have been prepared in accordattce with tbe Charities SORP (FRS 102} - Acwuntin8 aDd R¢porting by Charities.. Stat¢tn¢nt of Recomtn¢lld¢d PT¥tic¢ applicable to ¢b8rities pr¢paring th¢ir a¢Unts in accordance with th¢ FInla] Reporting Standard applicabl¢ in the UK and Republic of Ireland (FRS 102) {effe¢tsve l January 2019). tbe FiDancial ReponirLg Sralldard applicable ill the UK and Republic of Irelalld (FRS 102} attd the Compati1&% Act 2006. The Art Academy meets the defiDition of a public beryefit ¢ntity wthr FRS 102. A55ets and liabilities are initially recogDised at hr51orical wstor trBn5Bction value unJe55 otherwise st8ted in the relevaniaccountiDg policy. 2.2 GolnE collcerD Tbe lrnste£s a55es5 whether the use of goiDg concern is appropriate i.e.. wh¢ther there ar¢ Jny matCri8] unccrtainli¢s related to cv¢nts or conititions that may C SI)1¢8[ doubt on tbe ability of the ciwitsbLe company ro cottiJJue as a 80iti8 coD¢crn. Thcy make this assessment in rcspeciof a period of at least otte year from the date of authori72tion for tssue of the finaDGia] staEc]ne]Jls. The Art Acad¢rny contirLu¢d to work in line with Govcrnment Guidelines in response th¢ COVtD 19 Pd¢m1¢ artd wbere rvasonable and possible, stsff remained fi108b. The received uttder the uKG0vextsnll¢'S Corottavitus Job Reicntioll Schcme havc illvaluable. Thc Art Acadcnjy receivd a eTant of £245k from the Art5 Council England in iespect of their Culture lie£overy Full& This fiLDd w&4 set up to help ED8laDd'5 culturnl ewlogy by supporting orgls&tiOnS hit fInCIallY by Covid-19. The Jjxost tittp(1rt8LI ef OUT goillg cort¢etll 8sgesstnellt has been the OD going surt of the baDk. The bal8D¢¢ sh¢¢t shows net cijrrent a55gts of £41,205 {2020.' net Gurrent liabilities of £952,905, which included the loan which h85 now been Ten¢gotial¢dl. A 2Q year arTong¢meut was agreed for th¢ loan in March 2021 with rePan¢ats commencing in October 2021. This new loan provides long terni certaLDty and also for the full repayment of all capital iDtetcst tsvet the aEd le at ao affordable level of monthlyrepayTrnettts. At tbe titlle of3pproval ofth¢se fuJan¢1 stst¢m¢tLts COVID Ksiriciions knv¢ lift¢d ¢ontribuiillg to Trustees coofjdellce in the fvturc of The Art Academy. Course intake increased and coutse income at MaT¢h 2022 i3 up by 600/ts V5 PtioryeaT. The Jllodel for 2021122 has still involved suff WOTking fromhotne. aDd studettts seeiDg a conttllued blellded dElivery Jjjodel ell&blg theTll to study at home. The previou5 2 ye4r5 h85 prov¢d thi5 work, and th¢ ste¢S hav¢ nssumcd that this approach will rctThaill 5UCC¢$5M. Thc Art AcadczDy 15 worliuB with aFuDdtai5itLgCon5ultantto lauDch & FuthiSLtL8 Strafr8y in AubllDn 2022. Th¢se filt5 will be used to invest ill the futUT¢, i[thstrLu STIty ofTh¢ Art Acgdeiuy. The Art Academy is contiDUULg to offer new ¢ourses including & BA io PonfaiDJre which will 1allt ill Septejnber 2022 and hL8 ittV¢Sted ill 2 digital pl8tf¢)rni dcliveriug onlille courses wbich be tak from ho aL a tirn¢ 5ULtsbk to th¢ student. The Art Aca&tDy ploll5 to Jaullch all MA ill FineArt irl Septernbcr 2023. The Art Acadcmy is working WaId8 Open UJJiversity revalidation iL October 2022 attd registration with the OG wlLich will allow studettl loart support Èttd ittterttAtiOttAi $Ludent sponsorship thu5 incre&8£ stud¢ntllULuT$. For¢casts hav¢ b¢¢n Preped for ¢he year through to 31 August 2022 ott this basis alld these cumtly ptedict a sutplu Furthttmore the TTUSte¢s aTe confidellt thai givEll the cutTBDt liquidity the clwitabLe cotThpHny would b2 su5tsinable for collsidetable petiod of ll time. Page 14
Tbe Art A¢Ademy (A CoD]pany Limited by Guarzntee) Notes to the Financial Ststernents For the Year Ended 31 August 2021 Accoullllng polldes IeoDdn¢d} 2.2 GolDg coD¢trn leolltJtsu¢d) Taknng 511 of the above into accouttt the trjstees h2v¢ cermY ¢on$i(kr¢d wh¢thcr the cbaritsbl¢ compatty will have ad¢quatc ttsources lo ci)]JtiLUe ill operational existenc¢ for th¢ for¢5e¢ablc fvIuT¢. Thcy have CODcluded there arc DO marial uttcertaintieg about th¢ absjity to coutitlue 85 a going concern and that it r8]8 appr1 to ¢outinue to adopt the going ¢onrxTr ba5l5 of a¢counling in preparing the fitsallcial statements. 13 lll¢ome AII i1OMe is re£ogDised oll¢¢ th¢ ChaTityb85 entitlement to the itLCODK it is probable that the ittcome will b¢ received artd the amount of illcornc re1vable catl be measured reliably. Grants are included in tbe Slalemertt of Financfftal A¢tivit2es on a recBivable bg5i5. The balance of income received for 5pecifLC puryjoses but not exptrllded durillg the period is show) in tbt releyant fndS on the Ba]an¢e Sheet. Where incornc is received in advaDCe of entitlemellt of receipt, its recognition is deferred and in¢luded in ¢rediiors as deferred income. Wbereentitlement (KCUT5 befor¢ incorn¢ is receive& the incorne is accrue Other w¢ome is recogDised in the lod in which it Is receivable to the extent th¢ g(K)d5 hJv¢ beeo PTovidEd or on complelion of the service. 2.4 Exptndlture Expenditure is recognised onc¢ there is a le8a] or constructive obligation to trnnsfer ecolloTDiC benefit to a third party. it 15 probabl¢ that a transfer of etottomic bertefits will be required in settle[nt and tbe Rrnourlt of th¢ obligaiioll be m¢asurod reliably. ExpendiDJre is ¢Ilfied by activity. Th¢ wsts of activity ar¢ mad¢ up of thc totsl of direGt ¢osts and shatcd cosLs, SUPPOrt costs involved in wjdertaking ea¢lL activity. Direct costs aitributable to a single activity Bre allocated directly to that gctivity. Sh8r¢d costs wiuch coJ)tribuie more Ihath otte activity and support Costs whickn are not attributable to a singl¢ activity ar¢ apporriotted between those acttwties otL a basis consistellt with Ibe usc of tesour¢es. Central Stsff costs are allocated OJ) the ba818 of time speL4 alld ¢kpretiation charges a]lots1 Oll the portiott of the asset's Expenditure oll raising fiujds iDrludcs all ¢xp¢Dditwe IU¢d by th¢ Cbarity to rais¢ fijnds for its charitable purposcs and includes costs of all fimdraising acuviiies events and non-cbarib1e tradijjg. Exditsjre on¢bTitable activiti is iticurred on dtrectly undethg the activiti¢5 whi¢h fiuth¢r th¢ objectiv, as well as aDy a55ociated support C05t5. All expenditvr¢ is inclusive of iTrecovernble VAT. 2.5 Government grants Governm¢nt r¢lating to taagiblc fLy asyefs are treated as defrtted iJJcome artd released to tb¢ Sthtcment of FIrn¢la] Acuvilles over the expected usefijl lives of the assets concerned. Other 8raxts ate credited to the St8tett*ttt of Financi Aciiviiies as the related expenditure is incutred. 2.6 1tttÈre5treceivAbl¢ Illierest on bJnd8 held OJJ deposit is included when re¢eivAble attd the amouttt C2tt b¢ Jne8sured reliAbly by the Cb8nty. tbis is nottnally UPDll notification of the interest poid or payabl¢ byth¢ inststution with whom th¢ fiujds ar¢ depD5ilcd. Page 15
Th¢ Art A¢ad¢my (A Company Limittd by Gmarantee) Notes to the FiuAncial Statellnts For tbe Year Ended 31 August 2021 AccouDthig poli¢ie5 IcoDthiued) 2.7 Allocadon and apportlonment of costs Dd&il¢d maD#g¢m¢Dt #¢¢ouDts Ér¢ k¢pt witb ¢osts aJloc#t¢d on * bosi$ Aod dwked Against budgets. The level of detail is Considered too wat for publishcd 8CCOULts. Ill th¢x farI¢la] statan¢n15 ¢05t Hllocatiow are the 5UllllD3rie$ of that Dllnagemettt itthMtioll. Mai¢hillg restricted costs with relev¥ni funds is Dde as accurately as possibl¢ by r¢f¢rTing to tbe t¢nns of the dojjor. The athnKnistration cost allocation tween fimdraising a¢tiviii&8, teacbitig and residentanists itt tbe published SOFA is uJad¢ oll the basis of respective turnover. Property costs are allocated to the activities by dedicated floorspace. 2.8 Tlttgiblefixtd Lsd$ rtd deptttitio Tangible fixed 8sset5 COStirLg £1,000 or mor¢ ar¢ cgpitslised and reco8Dised when fisture econotllic bellefits ate PTobBble and tbe cost orvaiue of the fiss canbe measuredreliably. Tgible fixed 3ssets are initially recO]sed al cost. After recoBnitLOD, under the Cost model. tsts8ible fixed e¢S are rnea5ur¢d at cost less ¢MU1&ted depreciation and ally accumujated impaittBeDt 105ses. All costs illcutred to britL8 a tngLble fixed asset into its iJJreDded workmg condition should be included in the mea5ur¢m¢rLt of cosL Deprxiation is charged so ag to allocate the cost of tanwble r]xed Sets less theirresidua] value over their esiimated usefijl livc4 usillgthe straigtLt-litL¢ mdhod. Dcpte¢iatiotL iSPtovided on the following basis.. Fr¢ehold property Long-lcrni Icascholdpwcrty PlatLI al llLa¢hincry FixtuTes fittings Cornputer¢quipr[t 2% 20h Over l¢as¢ t¢tms 20% 20% 20% 2.9 Stocks Stocks aT¢ Volu¢d at th¢ low¢r (>f cost net tettli$#b]e value after m&kittg due allowatsce for Oblete attd slow-tllovittg 2.10 DebtorB Trade and other debtors are r¢colsed at the s¢ttI¢ttL¢LtHmount 8ft¢r any trad¢ di5wunLoffered. Ptepllyttttnts evslued ttt the amouttt prepaid net of any trade di8eounts due. 2.11 Cssh at bxDk hnd Cash at ba]Jk and in band iocludes cash and short-rm highly liquid investments with a sknon marIty of thr¢t months or I5 fro the date of acquisitioll or opelliD8 of the dcp05Lt Ot sAmilar ar¢ourtt. 2.12 Llabllllles and provtslons Littbijities arc recognised when there is art obliEatiott st the Balattce Sheet d 8s a resultof a pasi tv1. Lt is probable that traDsf¢r of Konomi¢ b¢rfitwi[I be required in sertlernen¢ aDd the amount of the settlernent call bE E5titnatcd reliably. Ltabi]ities Are recogDised at the atTrOUDt thai the Clwiry anticipaies it witl pay to Seth the debt or the 0[ it has receiv¢d &5 advaDced payments for the goods or 5ervjces It Jnust provid Provisioos are m¢asurcd at the bc5t esttma¢e of th¢ gmounts reqU¢d lo scttle the obligation. Whcr¢ thc cffect of tb¢ lim¢ value of molley ig ]Dxtetiai, the ptovision is the presetttvalue of those amouttts, discounted at the pre-rax discouLt Tat¢ that Kfl¢cts th¢ risks specific to the liability. The unwinding of the discouDt js reco8lliSEd I the State]netLiof FiDanciai Actsvities as a fCe¢0St Pa8e 16
The Art Academy (A Company Limit¢d by GuAr#ntee) Notes to the FlnAnclal Statements For the Year Ended 31 August 21121 Ac¢ountlngpolktu {¢oDtinuedl 2.13 Fittantl inslTUDMLts The Charity only b&5 fiDaD¢ial assets and fitsatici liabtliti¢5 of a kind that qualify 8s b&81¢ finsnctfjl instrumettts. Basic fittatt¢ial stn¢Dts illitially Teco8Di5cd at traDsa¢tioo value alld subsequently measuted al their settlejnent valu¢ with the exGeptioJJ ofbgJJkloaD8 which are $ub5¢qu¢ntly measured atamortis¢d ¢os¢ using th¢ ¢ffecuve illiettst]L&bod. 2.14 Oper4thig l¢we& ReotsIs p&id under operating I¢$ arc cbargcd to thc Statement of FittatKial Activities QD a straigbt ]ille basis over the le4se tern). L15 renOn3 The ¢hÈritable company opeAies a defined contribution pension stheme. Celltributions payable 10 the charitable cornpRnls pension scheme ate tharged to the Ststement of Fin8nciai Activities inth¢p¢riod to which they rdate. 2.16 Fund atcounllng GelleJ81 fitn(ts ar¢ unrestri¢ted fun&% wlLigh 3TC availabl¢ for usc at the dis¢retiott of the T15 in hlltherance of tbe 8elleTal objectives of the Cbatity alld which have not be¢n desigllated forother ptstyo$e5. R¢stricted ate fi]Dds wbich aTe to be u8ed IJJ ac¢ord8xce with SPEcifJc restrictions imposed by (knors or whi¢b have b¢cn raised by the C1]ty for particular purposes. The costs of rdisill8 and admiDiSteritig such fid$ Ar¢ charged a81 the specific fut. The aim and use of eaeh iestritted i5 S¢t out in th¢ notes to the financial statements. Inve5ttn¢nt income. gaitis attd Josses are all¢)cated to the appTopriate futtd. CrltlcAI Accoundkng esdtht45 8nd •reas of JudgmeDt PrepRrntion of the acwunts requires the Trn5tee5 and manag¢mcnt to Iake Si8Dificant judgtncnts a[ ¢5tim8tes. The itans in th¢ Jccount5 wh¢re thes¢ judgD]cllts have been madc include.. the useful ecottotDic ]iv£s attribut¢d to tsngible red &55¢ts used to d¢t¢rmine the annual depre£iation charge" the provision agaillst doubtful bad d¢bts in respect of coutse ft¢s' estimates in respect of acuued expEnditw¢. Intorne from donatloD$ and legati UDrt4tr1eted Tot41 funth 2021 Tolal 21121 2020 Government gr*nts Coronavirus job r¢leDtiOll scheme 8taDt Local autIltyCOY1d-19 grant 67.856 67,856 JJ4.473 25,000 Pa8e 17
TtLe Art A¢Ad¢my (A Company LIllted by GuarAntee) Notr5 ts the Finalltial Statsments For the Y¢&r Ended 31 August 2021 Income fromdon%lAoll8 and legaci¢s (¢onthiutd) Unrestricted fund5 2021 Total Totol fvnds 2020 2021 Dott8ti0tts 270.428 270,428 83.671 Yotsl 2021 338284 338.284 223,544 Total 2020 223,J44 223.J44 IneomE froth ehrltble aedwldes Uttrestricted fllnds Totsl fulld8 2021 TOÈJI fvnds 2020 2021 Twhing art ¢ISe$ Resid¢ni artists. studios 920,033 37,161 920.033 37,161 1,027,339 35,028 Tts 2021 957.194 957.194 1.062.367 Toial 2020 1.062.367 J,062,367 IAtomÈ from othertradlng Acdvltle5 IDcoD from non ch¥ritslAe tradingactivities UDrestrl¢trd funds 2021 Totsi funds 2021 2020 Creativity amEi]dIDg Sales of ortmateria]s 2.260 37.849 11450 22&) 37.849 12.450 6.970 62,148 Jl,269 Oth¢T ll)1¢[1 incorlle Total 2021 52,559 52,559 79,487 roro12020 79.487 79.487 Page 18
The Art AcAdemy (A Company Llmited by Gu#r&ntet Notes to the Financial Statements For the Year Ended 31 August 2021 Investment theome UDrtJtrlctsd fuknds 2021 Totsi Toiol 2021 2020 ttLV¢Sttll¢tLt income 668 666 1.209 To¢G12Q20 1,269 1.269 Expendifyre on Ta15thK funds Fundr8tslng tradlttgtxptrtses A¥ reslated Toial UDre5trl¢ted funds 2021 Totgl 2021 2020 Art mat¢Tialpurchasc5 Creativity tr8ittitt8 Costs 25,450 25.450 35,345 Totsl 2021 25.450 25.450 35,439 ToÉal 2020 ¢KY restated 35.439 35.439 The ptior year is Rstated etelY a5 a rc5uIt of a change iTh aJl¢)rntlOD of ¢xpenditUT¢ which has altcrcd the split ofcxpenditurc Lxmeett fidT8]sijJg tradillB expetLses ajjd tharitabk expendimre (notr 91. Page 19
The Art Academy (A Company Limited by Cuar8nteel Notes to the Flnaneial StateDllts For tbe Year Ended 31 August 2021 ADAlysi¥ of upeDditsre on tbritablE activities SuDuDary by fllnd typè Ar restated UDrestri¢ted fundg 2021 Totsl funds 2021 fvnds 2020 Te4chitig ort olw¢$ 1514,498 1,5J4.498 1.458.909 To¢¢712020os resttstsd 1,458,PO J,458,909 The priorytar is restated merely as a result of a chaoge ill allocatioo of expenditure whÈch has altcrd thc split of ¢xp¢uditt tween exp¢nditur¢ on ¢h8ritabl¢ &¢tivitiefj 8Dd fLllthAisiti8 expeDdibJte (Lote 8). ID. Allaly$is of expettdltllre by fi¢tfvltle$ Activitie5 UDdert8kell dlreetiy Support Costs 2021 2021 Totsl fulld5 2021 TottTI fvnds 2020 Teackning art ci&55es 530.862 983.636 1.514.498 1.458.909 Tota12020 543.697 915,212 1,458,P09 AttAtysi$ of dlrect cojts Totsl funds 2021 Toial fvnds 2020 Course rnaterial 56.413 347,850 108,099 18.5LW) 59,757 349,162 9J.4J7 10,283 27,078 ThtOT COSIS Marketujg & adrtIsing OthEr cours¢ MSrI&l Shop mJt¢rial Tot*1 2021 530.862 543,697 Page 20
The Art Academy (A Company Llmited by Guarautee) Notes to the Financial Statements For the Year Ended 31 Allgu$t 2021 io. Anatysb of exptnthtur¢ by activities (continued) AR*lysi¥ of support ¢ts Totsl funds 2021 Toial fvttd 2020 Stsff ¢oBts AdministratioD costs Auth"tOT remtratiOn 502.951 47.043 7,735 10,518 372.683 12.493 30,213 514.2if3 48.37] 4,328 4,700 298,377 32,146 J3.027 Legal costs PropeTty expe[5 Suttdry costs BaDk char8eS Total 2021 983,636 915,2J2 ii. Auditors rénwneTadoD 2021 2020 Fees payable to the Cbarity¥ 8uditor for the auditof the Charity's atLuual accoullts {illclwive ofvAD 5,100 4.070 Fee5 payabk to th¢ Cbarity's auditor respect of.. F10n of financièl statements (inclu5rv¢ of VAT) 600 12. Stsff tosts 2021 2020 Wages and salaries Socisl stCUTity ¢05ts Contribution to defmed Contri¢10 pension schemes 456.990 35.903 10.058 462,042 42.J58 10.003 502,951 514,263 Page 21
The Art Academy (A CompAlly Litttrd by Gllarantse) Notes to the Financial Statellnts For the Y¢ar Ended 31 August 2021 12. Staff t08t8 ItODtIDuedl The ¥veraBe numbcr of p¢Tsons ¢Trplod by the Cbatity duTitt8the yearwas &$ follows.. 2021 2020 EKccuIivc Administration 16 12 Te¢bnica] ser¥i¢es 19 15 No cmployeB te£eived temurteyaiion atsJowitiJJg to more the £60,000 in cith¢r year. The Key MartagemettiPersonDel of The Att Academy con¥ri8e the Trustees and5¢Dior ttLgnagers Is listed onPsge l. The tot81 ajnoullt of etllployee btllefits (i]Jcluding employerpettsion contributions employer natiouaj in5wanc¢ wrLtribution51 othcr pa¢ThpaId to k¢y Ttwwg¢nÈ r$ole1 for theirseThi to tbe Art Academy was £64.769 (2020.. £72J871. 13. Trustets rernuRtr*tioA fittd expensos Lhmg theyear. no Thte¢S r¢c¢iv¢d any r¢IDUrnti¢)n or otber b¢efitS (2020. £NJL). Dutiti8 the yeat ettd&f 3J AuBusi202L, tso Tnlee expellses have been irKurted Q020- £NW. Pa8e 22
The Art Acadejlly (A Company LI1(ed by GUarAtte} Trlotes to the Financial St•teDWllty For tbe Year Ended 31 Augllst 2021 14. TaDgible ed 8s8tts Ftsture fittiDg¥ aDd computer equlpjllettt LonE-term Jea4ebold property Frtthold prorty PJttt and acbinery Ctist or valu4tloD At I Seplcmber 2020 AdditioDS 1,82Q,306 10,022 63,722 540 225.662 18.350 2.119,712 18,890 At 31 Aus(2021 1,820,306 10.022 64.262 244,012 2,138.602 Deprttlatlo At I September 2020 135,306 27,0(X) 7.267 945 56253 3251 127570 34,204 326.396 65.400 At 31 August 2021 162.306 8,212 59.504 161,774 391.796 Net book valDe Al 31 August 2ff21 1.658,000 1,810 4,758 82.238 1.746.806 A¢ 31 Au8USt202 1,685,000 2.755 7,469 98.092 l.T93,316 Is. Stocks 2021 2020 Finished gwds aod goods foriesale 30.802 3J.517 16. Debtors 2021 2020 Due wIt11 one yè&r Ttade debtors 4293 753 33.285 (kberdebtOTS Pr¢paymellts and accrned illcom¢ 39.968 35,407 45.014 06,092 Page 23
TtLe Att A¢aderny (A Company LlJDlted by Guarantee) Note5 to the Finaneil Statements For th¢ Year Ended 31 August 2021 17. Credltors: AmouDts fauillg due iyithin ollt year 2021 2020 53.982 66,(M)9 J.09J,08g 18.611 8,586 87.071 353.385 Tde edItorS Oth¢r twti¢)n 3nd social security Othercreditors Accruals and defetred incom¢ 69.622 363263 552,876 1,4Jg,342 2021 2020 Deferred at I September2020 R¢sour¢cs deferred dutinE theyear Amounts released from previous periods 150,765 182.981 1150.765) 229,308 150,765 Q29.308) 182,981 150,765 Def¢ed incom¢ at the yeaT-gJyI comprised course fcc incorne r¢ld in Hdvauce of £182.981. Credittsrs: Amounts filllDg due after mLir¢ than y¢r 2•21 2020 1,138,843 Includcd withvo th¢ 8b)ve are Amouttts falling due as follows.. 2021 2020 Between one and yer$ Battk l(ans 58,889 Between iwo •nd five years Bank loaos 176.666 Ovtr tlve years B&uk loall$ 903288 A Dew 20 year arrdngetllent w&% ad with Nat W¢st b8nk and 5igDed on 22 MaT¢h 202L. The Jjew 20 year mortgAg¢ loall is secured on the charity's freehold Property at 165a Borough High Strerf and is rcpayobl¢ by monthly instalbllertts. cot)¥nencing ia October 2021. The full ba]aftce Including Int¢stWi1l be repaid ill MaT¢b 2rMI. P¥ge 24
Tbe Art AeAdemy (A Company L]Dted by GuarAtttse) Notss ¢0 the Fknanci21 St%temeDts Ffjr the Year Ended 31 August 21121 19. Statement of StsteJlleDt of fuJhds- ttsrrentyur Balan¢¢ 0¢ 1 September 2020 Blnce llt31 August 2021 Into £endIture UDre4trlcted tuttits General Funds 840,411 1.348.705 11,539,948) 649,168 The OUtr¢h Fund is a fi2ttd to b¢ sp¢rLt teaching art to diwdv8Thtsg¢dyoung peopl The Local authotity dis¢retionary COVID-19 grant was received from Southwark to support thtcharitable co]npany and help to Co¥ essential costs during the COVLD-19 pandemic. Tbe grarti has btell fully 5penL and sinc¢ the terlljs and condiiions required the Money loE¢ spelll th aecordaD¢¢ with tbe app]i¢8tiott the incom¢ and exdie b8s been treated as restrithd. S¢atsmeD¢ of fyDds- prlory¢aT J September 2039 Balance at Expendilure 31 Augwi2929 Income UDresttlcted fundi GcLcrai fiLlld¥ 966.028 J,341,267 (J.466,884) 84tl.41J ReJthleted Outreacb fund 2.464 Q,464) (25,000) )cal auth¢)rity discretiow COVID.19 grarLt 25.000 2.464 25,000 (27.404) Totsl of 968,492 3,300.207 {J,494,348) 840,411 Pag¢ 25
The Art At#den (A Company Limited by Guarantte) Notes to the FAD8nclAI Staternents For the Yer Ended 31 August 2021 20. AuAlysls of et assttg between funds Anatysts of Met assets b¢tw¢¢a fvttd8- eurrerrtyear Ullre5tri¢ted funds 2021 Tot 2021 Tangible fixed a5sgts 1,746.806 594,081 1551,8761 (1,138,843) 1,746,806 594,081 1552,876) 11,138,843} Creditors due withio one ye CrcdiLor5 due i]Lmore than oJ)e year TotAi 649.168 649,168 Allaly5i¥ of net *sets betwttn fDndJ- prior yw Unr£¥lricted fvKdf 2020 rotol fvnds 2020 TaUble fixed assets Cutrent osgets Cr¢dit4)rsdlle within olle year 1,793,3J6 506,437 (J,459.342} 1,793,316 506,437 (J.459.342) Total 840,411 840,4JJ 21. Reroncllladon of net Iiiovemetstkn funds to Det ¢•sh flow from operJLting activitie$ 2011 2020 Net expendittue fortheYw( p¢r Sttttetnentof Fi])Otttia] Activities) (191.243) (128.081) Adjustments for: Depreciaiion ¢barges Dividetsds, IJ)tetests and Tents from inv¢5tsnents tnlerest FAyBblB Decrease ill stwks Decrease in dcbior5 65.400 1668) 22,567 7J5 68,04] (J,269) 23.714 3.295 J,920 (32.358) 21.678 131,241 Incre4selldeerea8el in creditors Net ¢asb proTAded byl(used inl opeNtillg ¢tlvltles 49,690 (64,732J Page 26
The Art Ac8demy (A CoJJwally Limited by Grantee) Notes to the FiDaDclal statenllts For the Year Ended 31 Aulust 21121 22. Any$l$ of egsb aLd t*$h eqDlvglents 2•21 21120 Cash ill knattd 559 517,706 79] Notice depo$its11¢55 thgll 3 months) 407,457 Totsi u¥h ¥lld eash equlvgitnts 518,265 4118.228 23. Allatysls of thag¢S h¢¢debt Atl September 2020 At 31 August 2021 Ca8kL flo C&8b at b4Dk and in halld Debt due within l yeat Debt du¢ after l year 408228 {1,091,689) 110,037 1,037,707 (l.l38.843} 518,265 (53.982) (1,138,843) 1683,4611 8.901 1674.5601 PeDslort tommJtmeDts The group operates a defined contiibution pengiort scbune. The assets of the schetne ar¢ h¢ld scparatcly from thosc of the 8roup in att indepeLdctLt]y adtninister¢d fund. The pension cost¢]JaTge teptesellts contributions payableby the gtoup to th¢ fiJnd. 25. Operayng Iu5e ¢ommltments At 31 August 2021 th¢ Ctwityhad commitmellts to make fiJuLre miThiJtiurn Iw¢ pawn¢lltsundernon-caocellabk op¢rating leL8es as follows. 2021 2020 Not later tbon l y¢gr tater than l year atld not lalerthatt 5 yeaTS 112,384 105,894 114.635 248.254 218,278 3152.889 The folloiving lease YMentS have been Teco8Dised &5 an ¢XPEDS¢ in the Statcment of finattcial a¢tivities'. 2021 2020 Oprting Ic48e rentals Changes itl lease pay]JwiL8 ATi$illg from COVID-19 relaied rellt concessions 135,951 JOO.523 P•g¢ 27
The Art Academy (A COn1Y Ldmited by Guarantee) Notes to the Financial Statemellts For the Year Ended 31 August 2021 26. Related party trans#¢don8 The Charity has not ¢nter¢d into any relat¢dparty traD5a¢tiotsduritt8 the year. nor are there any outstallding bJan¢¢5 OWill8 bettyeea related pthies and the cPrity8t 31 August 2021. Thc principal, Rob PeppBr. 15 dire¢torof Rob PepperLIMite a ¢ompanywbicFL PTovid¢d 8 5¢ri¢5 of workshw dwitigthe Pandemic. In total there wer¢4 sessious ulldertakeneach at £50 as well as a Vin0 subscription paid forby Rob Y¢pp¢rLirnit¢d that w&$ reimb by The Art Acad¢my atcosL Ths totailed £371. Pag¢ 28