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2021-12-31-accounts

REGISTERED CHARITY NUMBER: 1127262

Contents of the Annual Report and Financial Statements ~~Ended31December2021~~

TRUSTEES:

Trustees' Annual Report

CHARITABLE COMPANY AND TRUSTEE DETAILS

Trustees' Annual Report - continued

Following the worst of the Covid disruption the David Hockney Foundation continued to work on its policy to lend work generously to museum exhibitions. The interest in this remains strong, and indeed increased during the year. Work was also commenced on researching for a Catalogue Raisonne which would be directly managed by the Foundation. Updates continue to be made to the Foundation’s website.

The Trustees' policy is to maintain a level of reserves sufficient to provide a stable base for the Charitable Company's continuing activities. The Trustees believe that the reserves are sufficient for its current purposes and these are reviewed on a regular basis. The reserves at 31 December 2021 were $212,900k (2020: $197,893k), including fixed assets of $194,260k (2020: $194,260k).

During the year, the Charitable Company received a large cash donation from trustee David Hockney amounting to $15,007k (2020 $nil). During the year, the Charitable Company did not receive any donations of artwork (2020: $ nil).

Trustees' Annual Report - continued

Approved and authorised by the Board of Trustees and signed on their behalf by

Trustees' Responsibilities Statement

The Trustees (who are also the directors of The David Hockney Foundation (UK) Limited for the purposes of Company law) are responsible for preparing the Trustees' Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

The Trustees are responsible for keeping adequate accounting records that 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. The Trustees 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.

DocuSign Envelope ID: BA255C52-712B-46C7-ADCD-45F9FODDFEAE

~~Independent Auditor's Report to the Members of The David Hockney Foundation (UK) Limited~~

Report on the audit of the financial statements

Opinion

In our opinion, the financial statements of The David Hockney Foundation (UK) Limited (the 'Charitable Company’):

We have audited the financial statements which comprise:

¢ the Cash flow Statement; and

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 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in respect of these matters.

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As explained more fully in the Trustees' Responsibilities Statement, the Trustees (who are also the directors of the Charitable Company for the purpose 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.

Commission) regulations.

Extent to which the audit was considered capable of detecting irregularities, including fraud - continued In addition to the above, our procedures to respond to the risks identified included the following:

INCOME
Donations 15,984 707
EXPENDITURE
Charitable activities
4		 4 (977) (664)
NET INCOME FOR THE YEAR
 3 15,007 43
RECONCILIATION OF FUNDS
�����������
Balances brought forward at		 January ����������� 197,893
Net income for the year 15,007 43
Balances carried forward at 31 December 212,900 197,893

There is no comprehensive income or loss other than as shown in the Statement of Financial Activities above.

All income and expenditure derive from continuing activities and relate to unrestricted funds.

FIXED ASSETS Note 2021
$'000
Heritage assets 8 194,260
CURRENT ASSETS
Debtors 9 3,693
Cash at bank and in hand 15,060
18,753
CREDITORS
Amounts falling due withinone year 10 (113)
NET CURRENT ASSETS 18,640
TOTAL ASSETS LESS CURRENT
, BEING NET ASSETS
LIABILITIES		 212,900
FUND
S)
Calledup share capital 11 -
Unrestricted Funds 212,900
212,900

The financial statements of The David Hockney Foundation (UK) Limited registered number: 06637374, were approved and authorised by issue by the Board of Trustees on ............................................. 30/9/2022

Movements in cash and cash equivalents Cash and cash equivalents at beginning of

Cash and cash equivalents comprise cash at bank and in hand.

The David Hockney Foundation (UK) Limited is a public benefit entity and a Charitable Company incorporated in the United Kingdom and is registered in England and Wales as a company limited by shares and having a share capital of 1 share of £1. At the date of this report, there are currently six Trustees. The address of the registered office is given on page 1. The nature of the Charitable Company's operations and its principal activities are set out in the Trustees' Report on pages 2 and 3.

The financial statements are prepared under the historical cost convention, in accordance with the Statement of Recommended Practice "Accounting and Reporting by Charities (SORP 2019)" applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), effective 1 January 2019; and the Companies Act 2006.

The principal accounting policies adopted in the preparation of the financial statements are set out below.

The Trustees have considered the level of expenditure to which the Charitable Company is committed and the timings of future cashflows arising. There were net current assets at 31 December 2021 of $18,640k (2020 - $3,633k) and total assets less liabilities were $212,900k (2020 - $197,893k). The Trustees consider that the assets held within the Company are sufficiently capable of generating income to meet such expenditure when required as the Charitable Company has the ability to realise assets and/or seek donations from David Hockney and other sources if required.

As a result of the inquiries made, the Trustees have a reasonable expectation that the Charitable Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of this report. The Charitable Company is well placed to manage its business risks successfully despite the current uncertain economicoutlook. Accordingly, the Trustees conclude that it is appropriate to prepare the Charitable Company's financial statements on the going concern basis.

Income

Income comprises amounts due to the Charitable Company recognised on an accruals basis in the accounting period in which they are receivable, which is when the Charitable Company becomes entitled to the resource.

- continued

Expenditure

Charitable Activities:

Support costs:

Support costs include central office functions such as general management, finance, information technology and human resources.

All support costs are allocated to the single charitable activity.

- continued

Net income is stated after charging

29 - 142

EXPENDITURE ON CHARITABLE ACTIVITIES

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||||||| |---|---|---|---|---|---| |Foreign exchange loss|355|-| |Miscellaneous|68|67| |Governance|costs|(note|5)|199|206| |977|664|

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Costs such as audit, legal and professional costs incurred in the course of managing the Charitable Company and its affairs have been allocated to governance costs (note 5).

28 199

The Charitable Company does not have any direct employees. The staff are employed by David Hockney and other David Hockney related entities. An appropriate proportion of their salaries and associated costs is recharged to the Charitable Company which in the year was $105k (2020 - $193k). All staff members spend a portion of their time on the Charitable Company's affairs. In the reporting year there were no recharges to members of staff whose total employee benefits exceeded $60,000 or £60,000. (2020: none). The Trustees are the only key management personnel during the year and received no remuneration (2020: none).

HERITAGE ASSETS

All heritage assets are capitalised and comprise artwork donated to the Charitable Company by David Hockney, one of the Charitable Company’s Trustees. Detailed records are kept by the Trustees of all pieces of artwork held by the Charitable Company. The Trustees ensure the assets are held securely in suitable conditions and continually review this against best current practice. Access to the assets requires the consent of the trustees when they are not on public display.

The heritage assets initial donated valuation is treated as deemed cost. The heritage assets were assessed for impairment based on their knowledge of current values of artwork as at 31 December 2021. No adjustments for impairment were required as a result of the review of the heritage assets. In line with good practice the assets will be reassessed by professional valuers later this year. There have been no transactions in heritage assets in the last 5 years.

The Charitable Company lent artworks to the 1853 Gallery at Salts Mill in Saltaire, Yorkshire throughout the year. Other loans were to group exhibitions.

$'000
from parent company The David Hockney Foundation Inc 3,534
159
3,693
$'000 $'000
Accruals 94 70
Other creditors (see note 13) 19 -
113 70

Authorised, allotted, issued and fully paid:

RECONCILIATION OF NET INCOME TO CASH GENERATED/(USED BY) OPERATIONS

Net income for the year, being operating cash flows before movement in working
capital 15,007
Decrease / (increase) in debtors 4
Increase in creditors 43
Cash generated from operations 15,054

During the year, David Hockney, one of the Charitable Company Trustees, donated $15,984k to the Charitable Company (2020 - $707k). Included within other creditors is $19k (2020: $nil) owed to David Hockney at the year end.

No Trustees were remunerated for their services as Trustee in the current or prior period. In the year ended 31 December 2021, no costs were considered to be attributable to the Charitable Company in respect of recharges to the Charitable Company for governance costs (2020 - $nil).

DocuSign Envelope ID: BA255C52-712B-46C7-ADCD-45F9FODDFEAE

Notes to the Financial Statements - continued

~~The David Hockney Foundation (UK) Limited~~

for the Year Ended 31 December 2021

  1. CONTROLLING PARTY

The Charitable Company is controlled by The David Hockney Foundation Inc (company number C3151158) a public benefit corporation in the United States of America, which is also the ultimate controlling party. The Company's registered address is 2049 Century Park East, Suite 2100, Los Angeles, CA 90067. Control is exercised by The David Hockney Foundation Inc through the power to appoint or remove the majority of Trustees. This is the largest and smallest company which prepares group financial statements.

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