**Charity number: 1162290**
## **THE PAOLOZZI FOUNDATION (CIO)**
## **UNAUDITED**
**TRUSTEES REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021**
## **THE PAOLOZZI FOUNDATION (CIO)**
|**CONTENTS**||
|---|---|
||Page|
|**Reference and administrative details of the charity, its trustees and advisers**|1|
|**Trustees' report**|2 - 4|
|**Independent examiner's report**|5 - 6|
|**Statement of financial activities**|7|
|**Balance sheet**|8|
|**Notes to the financial statements**|9 - 15|
## **THE PAOLOZZI FOUNDATION (CIO)**
## **REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 MARCH 2021**
## **Trustees**
Robert Hiscox, Chairman Adrian Barr-Smith, Secretary Sir Christopher Frayling The Marquess of Queensberry (resigned 18 August 2021) Toby Treves
## **Charity registered number**
1162290
## **Principal office**
Calder and Co, 30 Orange Street, London, WC2H 7HF
## **Accountants**
Calder & Co, 30 Orange Street, London, WC2H 7HF
## **Investment Managers**
Punter Southall Wealth, 11 Strand, London , WC2N 5HR
Page 1
## **THE PAOLOZZI FOUNDATION (CIO)**
## **TRUSTEES' REPORT FOR THE YEAR ENDED 31 MARCH 2021**
The Trustees present their annual report together with the financial statements for the 1 April 2020 to 31 March 2021.
## **Objectives and Activities**
## **a. POLICIES AND OBJECTIVES**
The principal objective of the Foundation is to advance the education of the public by the promotion of their appreciation of fine arts and, in particular, the works of Sir Eduardo Paolozzi. The Trustees' policy is to utilise the assets held by the Charity to achieve this objective.
## **b. ACTIVITIES FOR ACHIEVING OBJECTIVES**
Following the death of Sir Eduardo Paolozzi in April 2005 and the significant legacies received, the Trustees continually review the most appropriate methods for generating the funds necessary to achieve their objectives.
## **c. MAIN ACTIVITIES UNDERTAKEN TO FURTHER THE CHARITY'S PURPOSES FOR PUBLIC BENEFIT**
In setting objectives and planning for activities, the Trustees have given due consideration to general guidance published by the Charity Commission relating to public benefit and are confident that there is an identifiable public benefit.
## **Achievements and performance**
## **a. KEY FINANCIAL PERFORMANCE INDICATORS**
The Foundation generates income from sales of artwork, royalties and licences. In the period to 31st March 2021, income of £23,047 was earned as well as investment income of £16,671.
## **b. REVIEW OF ACTIVITIES**
In common with others, activities of the Foundation this year have been restricted by the constraints imposed by the pandemic.
The Trustees have had preliminary discussions regarding a possible exhibition in China of works by Sir Eduardo Paolozzi, but these have not yet proceeded further.
The Trustees have continued to liaise with the developers of Euston mainline station and the sculpture ‘Piscator’ has now been removed from the demolition site at the station. The work requires restoration before it is relocated.
The Foundation has collaborated with Edinburgh College of Art and has funded the initial 4 Paolozzi awards to students in respectively the sculpture, printmaking, textiles and ceramics disciplines.
The Foundation has funded the restoration work to the wooden sculpture entitled ‘London to Paris’ by Sir Eduardo Paolozzi. With help from Sir Christopher Frayling a suitable location has been identified where the work will now be displayed. The Trustees have agreed to loan the work for display at Churchill College, Cambridge.
The Foundation has distributed copies of the Paolozzi monograph by Judith Collins to selected individuals.
Page 2
## **THE PAOLOZZI FOUNDATION (CIO)**
## **TRUSTEES' REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2021**
The Edinburgh Beer Factory (EBF) has continued to distribute Paolozzi lager, despite the operational difficulties during the pandemic. In conjunction with EBF the Foundation has succeeded in registering “Paolozzi” as a trade mark.
## **c. INVESTMENT POLICY AND PERFORMANCE**
IIn order to diversify risk and generate additional income, the Foundation has invested £704,444 into a number of funds with Punter Southall Wealth ( formerly Psigma Investment Management). The fund value at the year end was £824,776. The trustees are taking a long term view on the investments and no immediate changes are planned. Income of £16,671 was generated in the period compared to £16,111 in the previous year.
## **d. FACTORS RELEVANT TO ACHIEVE OBJECTIVES**
The principal mechanisms which enable the Foundation to achieve its objectives are the public exhibition of works of art, in particular those by Sir Eduardo Paolozzi, and activities in print and other media. Since the Foundation does not itself actively trade, it requires the cooperation and support of art historians and others. It is then able to respond to initiatives with funding and/or other support, utilising reserves which it holds.
## **Financial review**
## **a. GOING CONCERN**
After making appropriate enquiries, the Trustees have a reasonable expectation that the Foundation has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the Accounting Policies.
## **b. RESERVES POLICY**
The Foundation needs to maintain reserves in order to fund the conservation and storage of artwork. However, there is no intention to hold significant reserves for the long-term and grants and/or donations will be made as appropriate.
## **Structure, governance and management**
## **a. CONSTITUTION**
The Foundation is constituted as a charitable incorporated organisation.
## **b. METHOD OF APPOINTMENT OR ELECTION OF TRUSTEES**
The management of the Foundation is the responsibility of the Trustees who are elected and co-opted under the terms of the Trust deed.
Page 3
## **THE PAOLOZZI FOUNDATION (CIO)**
**TRUSTEES' REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2021**
## **c. ORGANISATIONAL STRUCTURE AND DECISION MAKING**
The Foundation is managed by the Trustees with the assistance of a qualified Treasurer. All decisions are made by the Trustees at regular meetings held not less than three times a year. The Foundation has no employees.
## **d. RELATED PARTY RELATIONSHIPS**
During the period, no Trustees received remuneration or benefits in kind. Routine expenses were reimbursed.
## **e. RISK MANAGEMENT**
The Trustees have assessed the major risks to which the Foundation is exposed, in particular those related to the operations and finances of the Foundation, and are satisfied that systems and procedures are in place to mitigate our exposure to the major risks.
## **FUNDS HELD AS CUSTODIAN**
There are no funds held as custodian for other parties.
## **TRUSTEES' RESPONSIBILITIES STATEMENT**
The Trustees 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).
The law applicable to charities in England & Wales requires the Trustees to prepare financial statements for each financial year and 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 charity and of the incoming resources and application of resources of the charity 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;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The Trustees are responsible for keeping proper accounting records that are sufficient to show and explain the charity's transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
This report was approved by the Trustees, on 18 August 2021 and signed on their behalf by:
Adrian Barr-Smith Secretary
Page 4
## **THE PAOLOZZI FOUNDATION (CIO)**
## **INDEPENDENT EXAMINER'S REPORT FOR THE YEAR ENDED 31 MARCH 2021**
## **INDEPENDENT EXAMINER'S REPORT TO THE TRUSTEES OF THE PAOLOZZI FOUNDATION (CIO) (the 'charity')**
I report to the charity Trustees on my examination of the accounts of the charity for the year ended 31 March 2021.
This report is made solely to the charity's Trustees, as a body, in accordance with section 145 of the Charities Act 2011 and regulations made under section 154 of that Act. My work has been undertaken so that I might state to the charity's Trustees those matters I am required to state to them in an Independent examiner's report and for no other purpose. To the fullest extent permitted by law, I do not accept or assume responsibility to anyone other than the charity and the charity's Trustees as a body, for my work or for this report.
## **RESPONSIBILITIES AND BASIS OF REPORT**
As the Trustees of the charity you are responsible for the preparation of the accounts in accordance with the requirements of the Charities Act 2011 ('the 2011 Act').
I report in respect of my examination of the charity's accounts carried out under section 145 of the 2011 Act and in carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
As permitted by Direction 2, issued by the Charity Commission the firm for which I work has provided the Company with bookkeeping services during the year ended 31 March 2020. As a consequence I have followed the requirement of the FRC’s Ethical Standard when undertaking this assignment.
An independent examination does not involve gathering all the evidence that would be required in an audit and consequently does not cover all the matters that an auditor considers in giving their opinion on the financial statements. The planning and conduct of an audit goes beyond the limited assurance that an independent examination can provide. Consequently I express no opinion as to whether the financial statements present a ‘true and fair’ view and my report is limited to those specific matters set out in the independent examiner’s statement.
## **INDEPENDENT EXAMINER'S STATEMENT**
I have completed my examination. I can confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
1. accounting records were not kept in respect of the charity as required by section 130 of the 2011 Act; or
2. the accounts do not accord with those records; or
3. the accounts do not comply with the applicable requirements concerning the form and content of accounts set out in the Charities (Accounts and Reports) Regulations 2008 other than any requirement that the accounts give a 'true and fair' view which is not a matter considered as part of an independent examination.
Page 5
## **THE PAOLOZZI FOUNDATION (CIO)**
## **INDEPENDENT EXAMINER'S REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2021**
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.
Signed: David J Lyon FCA
Dated: 18 August 2021
## **CALDER & CO**
Chartered Accountants
30 Orange Street London WC2H 7HF
Page 6
## **THE PAOLOZZI FOUNDATION (CIO)**
## **STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2021**
|**Unrestricted**
**funds**
**Note**
**2021**
**£**
**INCOME FROM:**
Trading activities
2
**23,047**
Investments
3
**16,671**
Other income
**-**
**TOTAL INCOME**
**39,718**
**EXPENDITURE ON:**
Charitable activities
5
**34,228**
**TOTAL EXPENDITURE**
6
**34,228**
**NET INCOME BEFORE INVESTMENT GAINS/(LOSSES)**
**5,490**
Net gains/(losses) on investments
8
**216,150**
**NET INCOME / (EXPENDITURE) BEFORE OTHER**
**RECOGNISED GAINS AND LOSSES**
**221,640**
**NET MOVEMENT IN FUNDS**
**221,640**
**RECONCILIATION OF FUNDS:**
Total funds brought forward
**1,777,994**
**TOTAL FUNDS CARRIED FORWARD**
**1,999,634**|**Total**
**funds**
**2021**
**£**
**23,047**
**16,671**
**-**
**39,718**
**34,228**
**34,228**
**5,490**
**216,150**
**221,640**
**221,640**
**1,777,994**
**1,999,634**|_Total_
_funds_
_2020_
_£_
_89,353_
_16,311_
_8,803_
_114,467_
_30,685_
_30,685_
_83,782_
_(120,609)_
_(36,827)_
_(36,827)_
_1,814,821_
_1,777,994_|
|---|---|---|
The notes on pages 9 to 15 form part of these financial statements.
Page 7
## **THE PAOLOZZI FOUNDATION (CIO)**
## **BALANCE SHEET AS AT 31 MARCH 2021**
|**Note**
**FIXED ASSETS**
Investments
8
**CURRENT ASSETS**
Stocks
9
Debtors
10
Cash at bank and in hand
**CREDITORS:**amounts falling due within
one year
11
**NET CURRENT ASSETS**
**NET ASSETS**
**CHARITY FUNDS**
Unrestricted funds
12
**TOTAL FUNDS**|**£**
**1,071,037**
**1,828**
**106,565**
**1,179,430**
**(5,419)**|**2021**
**£**
**825,623**
**1,174,011**
**1,999,634**
**1,999,634**
**1,999,634**|_£_
_1,071,915_
_29,285_
_76,828_
_1,178,028_
_(8,659)_|_2020_
_£_
_608,625_
_1,169,369_|
|---|---|---|---|---|
|||||_1,777,994_|
|||||_1,777,994_|
|||||_1,777,994_|
The financial statements were approved by the Trustees on 18 August 2021 and signed on their behalf, by:
## **Robert Hiscox, Chairman**
The notes on pages 9 to 15 form part of these financial statements.
Page 8
**THE PAOLOZZI FOUNDATION (CIO)**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021**
## **1. ACCOUNTING POLICIES**
## **1.1 Basis of preparation of financial statements**
The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant notes to these accounts. The financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 and Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and Charities Act 2011.
The Paolozzi Foundation (CIO) constitutes a public benefit entity as defined by FRS 102.
## **1.2 Income**
All income is recognised once the charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.
For legacies, entitlement is taken as the earlier of the date on which either: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor(s) to the Trust that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the charity has been notified of the executor's intention to make a distribution. Where legacies have been notified to the charity, or the charity is aware of the granting of probate, and the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material.
Donated services or facilities are recognised when the charity has control over the item, any conditions associated with the donated item have been met, the receipt of economic benefit from the use of the charity of the item is probable and that economic benefit can be measured reliably. In accordance with the Charities SORP (FRS 102), the general volunteer time of the Friends is not recognised and refer to the Trustees' report for more information about their contribution.
On receipt, donated professional services and donated facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.
Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Income tax recoverable in relation to investment income is recognised at the time the investment income is receivable.
Page 9
**THE PAOLOZZI FOUNDATION (CIO)**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021**
## **1. ACCOUNTING POLICIES (continued)**
## **1.3 Expenditure**
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.
All expenditure is accounted for on an accruals basis. All expenses including support costs and governance costs are allocated to the applicable expenditure headings.
Charitable activities and Governance costs are costs incurred on the charity's educational operations, including support costs and costs relating to the governance of the charity apportioned to charitable activities.
Grants payable are charged in the year when the offer is made except in those cases where the offer is conditional, such grants being recognised as expenditure when the conditions attaching are fulfilled. Grants offered subject to conditions which have not been met at the year end are noted as a commitment, but not accrued as expenditure.
## **1.4 Turnover**
Turnover comprises revenue recognised by the charity in respect of goods and services supplied during the year, exclusive of Value Added Tax.
## **1.5 Investments**
Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance sheet date, unless fair value cannot be measured reliabily in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and shown in the heading ‘Gains/(losses) on investments’ in the Statement of financial activities.
## **1.6 Interest receivable**
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the Bank.
## **1.7 Stocks and work in progress**
Stocks and work in progress are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.
## **1.8 Debtors**
Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.
Page 10
**THE PAOLOZZI FOUNDATION (CIO)**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021**
## **1. ACCOUNTING POLICIES (continued)**
## **1.9 Creditors and provisions**
Creditors are recognised when there is an obligation at the Balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.
## **1.10 Financial instruments**
The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.
## **1.11 Fund accounting**
General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.
Investment income, gains and losses are allocated to the appropriate fund.
## **2. TRADING ACTIVITIES**
|**Unrestricted**
**funds**
**2021**
**£**
**Charity trading income**
Sale of artwork
**1,023**
Royalties
**14,781**
Licence agreement
**7,243**
**23,047**
Net income from trading activities
**23,047**|**Total**
**funds**
**2021**
**£**
**1,023**
**14,781**
**7,243**
**23,047**
**23,047**|_Total_
_funds_
_2020_
_£_
_25,668_
_17,088_
_46,597_|
|---|---|---|
||||
||||
|||_89,353_|
|||_89,353_|
Page 11
## **THE PAOLOZZI FOUNDATION (CIO)**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021**
## **3. INVESTMENT INCOME**
|**Unrestricted**
**funds**
**2021**
**£**
Investment income
**16,671**
_Total 2020_
_16,311_|**Total**
**funds**
**2021**
**£**
**16,671**
_16,311_|_Total_
_funds_
_2020_
_£_
_16,311_|
|---|---|---|
||||
## **4. SUPPORT COSTS**
|Storage costs
General office costs
Computer costs
Restoration costs
Secretarial support
Framing costs
Other support costs
_Total 2020_|**Activities**
**£**
**7,916**
**-**
**201**
**5,680**
**238**
**-**
**3,871**
**17,906**
_16,015_|**Total**
**2021**
**£**
**7,916**
**-**
**201**
**5,680**
**238**
**-**
**3,871**
**17,906**
_16,015_|_Total_
_2020_
_£_
_8,406_
_139_
_449_
_3,150_
_2,156_
_1,715_
_-_
_16,015_|
|---|---|---|---|
|||||
## **5. GOVERNANCE COSTS**
|**Unrestricted**
**funds**
**2021**
**£**
Accountancy
**6,775**
Insurance
**1,862**
Legal
**386**
Bank charges
**69**
Books
**1,230**
**10,322**|**Total**
**funds**
**2021**
**£**
**6,775**
**1,862**
**386**
**69**
**1,230**
**10,322**|_Total_
_funds_
_2020_
_£_
_6,650_
_1,862_
_354_
_60_
_-_|
|---|---|---|
||||
||||
|||_8,926_|
Page 12
**THE PAOLOZZI FOUNDATION (CIO)**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021**
## **6. ANALYSIS OF EXPENDITURE BY EXPENDITURE TYPE**
|**ANALYSIS OF EXPENDITURE BY EXPENDITURE TYPE**|||
|---|---|---|
|**Other costs**
**2021**
**£**
Support costs
**17,906**
Other donations
**6,000**
Donations of artwork
**-**
**Charitable activities**
**23,906**
**Governance costs**
**10,322**
**34,228**
_Total 2020_
_30,685_|**Total**
**2021**
**£**
**17,906**
**6,000**
**-**
**23,906**
**10,322**
**34,228**
_30,685_|_Total_
_2020_
_£_
_16,015_
_-_
_5,744_
_21,759_|
|||_8,926_
_30,685_|
||||
## **7. INDEPENDENT EXAMINATION**
The Independent Examiner's remuneration amounts to an Independent Examination fee of £2,500 and other accounting, bookkeeping and administration fees of £4,275 totalling £6,775.
Page 13
**THE PAOLOZZI FOUNDATION (CIO)**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021**
## **8. FIXED ASSET INVESTMENTS**
|**Market value**
At 1 April 2020
Revaluations
At 31 March 2021
**Investments at market value comprise:**
Listed investments
All the fixed asset investments are held in the UK
**9.**
**STOCKS**
Other works
Probate value of artwork donated from the Estate of Sir Eduardo
Paolozzi
**10.**
**DEBTORS**
Trade debtors
Other debtors||
|---|---|
Page 14
## **THE PAOLOZZI FOUNDATION (CIO)**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021**
## **11. CREDITORS: Amounts falling due within one year**
|**CREDITORS: Amounts falling due within one year**|||
|---|---|---|
|Trade creditors
Other taxation and social security
Accruals and deferred income|**2021**
**£**
**2,169**
**-**
**3,250**
**5,419**|_2020_
_£_
_2,261_
_3,148_
_3,250_|
|||_8,659_|
## **12. STATEMENT OF FUNDS**
## **STATEMENT OF FUNDS - CURRENT YEAR**
|**STATEMENT OF FUNDS - CURRENT YEAR**||||
|---|---|---|---|
|**Balance at**
**1 April 2020**
**£**
**Unrestricted funds**
General Funds - all funds
**1,777,994**
**STATEMENT OF FUNDS - PRIOR YEAR**
_Balance at_
_1 April 2019_
_£_
General Funds - all funds
_1,814,821_
Total of funds
_1,814,821_|**Income Expenditure**
**£**
**£**
**39,718**
**(34,228)**
_Income_
_Expenditure_
_£_
_£_
_114,467_
_(30,685)_
_114,467_
_(30,685)_|**Gains/**
**(Losses)**
**£**
**216,150**
_Gains/_
_(Losses)_
_£_
_(120,609)_
_(120,609)_|**Balance at**
**31 March**
**2021**
**£**
**1,999,634**|
||||_Balance at_
_31 March_
_2020_
_£_
_1,777,994_|
||||_1,777,994_|
Page 15