2022-12-31-accounts - Arts Factory Ltd

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Report and Financial Statements for the year ended 31 December 2022

for

Arts Factory Ltd

Company registration number 02491685 Charity number 1178430

Arts Factory Ltd

Contents of the Financial Statements for the year ended 31 December 2022

	Page
Charity and Company Information	1
Report of the Trustees	2 - 4
Independent Examiners' Report	5
Statement of Financial Activities	6
Balance Sheet	7
Notes to the financial statements	8 - 12

Arts Factory Ltd

Charity Information for the year ended 31 December 2022

Directors and Trustees Mr M Bryan (Chair) Ms A Evans Mr B Triggs Mr L Moss Mr R Lines Ms A Love resigned 10 January 2022 Charity Number 1178430 Company Number 2491685 Registered Office Trerhondda The Strand Ferndale Rhondda Cynon Taff CF43 4LY Accountants and Independent Arian Accountants Limited Examiners 19 Sundew Close Cardiff CF5 2SE Bankers Barclays Bank plc

Page 1

Arts Factory Ltd

Report of the Trustees for the year ended 31 December 2022

The trustees are pleased to present their annual directors' report together with the financial statements of the charity for the year ending 31 December 2022 which are also prepared to meet the requirements for a directors' report and accounts for Companies Act purposes. The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and Accounting and Reporting by Charities: Statement of Recommended Practice 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 2015).

Objectives and activities

Objectives

The objects of the charity are to provide or assist in the provision of social welfare facilities for recreation or other leisure time occupation by individuals who have need of such facilities by reason of their youth, age, infirmity or disability, financial hardship, or social circumstances with the object of improving their conditions of life.

Activities

The charity operates a Health and Wellbeing Centre at Trerhondda Chapel in the town centre of Ferndale in the upper Rhondda Fach. The centre runs various courses, clubs, and groups for beneficiaries as well as several social business activities that both generate income and allow us to offer opportunities to people to train and upskill themselves through volunteering. The charity also operates a garden project in partnership with Sunrise Community Garden called Rhondda Fach Community Garden which allows volunteers to upskill themselves and improve their mental health and wellbeing in the outdoors. The charity relies on earned income, grants, a service level agreement, and donations to cover its operating costs.

The Trustees endeavour to encourage all members of the community to engage in our activities and programmes and this should enable them to change their lives.

Achievements

Achievements and highlights of the year for Arts Factory include:

We increased our staff team to include a Volunteer Coordinator role to enable us to recruit more volunteers and give them a progression route with a dedicated worker.
All of the staff team received LGBTQ+ training so they are more confident in dealing with any issues that arise.
During 2022 we delivered food parcels which helped to feed 1967 adults and 839 children as part of our partnership project with Fareshare Cymru to deliver Cupboard Essential packs.
We celebrated World Mental Health Day within our Health & Wellbeing groups.
We provided a summer programme this year dedicated to youth and delivered youth drop-in sessions and Bush crafting throughout the school holidays.
Our Graphic Design service has continued to grow from strength to strength during 2022 and sales exceeded budget figures.
Factory Books has had an intensive training programme put in place to reduce mistakes made and help grow our sales.
Rhondda Fach Community Garden has grown in strength and had a good crop of vegetables grown this year and provided the community with low-cost home-grown food. We have seen an increase in demand to cut grass for the more vulnerable people in our community and look to build on this in 2023.
Our Active Inclusion project was completed in December 2022. It met all the grant requirements and hit all its targets working with over 75 people enabling them to get closer to the work market and increase their confidence.
We created a pilot project with Timecentres to work with the community and local shops to introduce time credits locally. This is in its infancy but is already showing some promising outcomes.
Our CEO is part of the Welsh Government Economy Meetings with the Minister to help influence and inform on Third Sector work.

Page 2

Arts Factory Ltd

Report of the Trustees (continued)

We were invited by Cwm Taf Morgannwg Health Board to take part in the CTM2030 Community Leaders sessions, and our CEO and Health & Wellbeing Coordinator attended the inaugural meeting which was held at Trerhondda.
We held a staff and trustee planning session in November 2022 to discuss how Arts Factory can move forward with the opportunity of Maerdy Community Centre being donated to us. We held a consultation event in July 2022 to gauge public interest in opening the centre which was very well attended by over 80 people.
We operated Warm Hubs at the start and end of 2022 which were well attended, we also gave out warm packs to people who needed them.
We delivered Christmas Hampers in partnership with Fern Partnership to local primary schools for the families that were in need.
We took a coach of staff, volunteers, and group members to the New Theatre in Cardiff to see the panto Snow White. In addition, we did a whole team day out to St Fagans.
We were approached by The Guardian newspaper to be filmed to be part of their Christmas donation appeal. We were also approached by Locality to be filmed for The Independent newspapers Christmas donation appeal. Both opportunities enabled us to access valuable funding and donations from supporters.

Financial review

Members of the management committee meet quarterly to review the financial position of the charity. As a result of this information they are confident in realistically reviewing and adjusting budgets. During the year funding continued to be received for the charity's main activities. Pen y Cymoedd Windfarm continued to support the charity with a revenue grant of £25,176. The Wales Council for Voluntary Action gave a grant of £29,361 to support the active inclusion programme and the Moondance Foundation supported the charity with a grant of £30,000 during the year. The charity also received a number of other grants and donations.

It is the policy of the charity that unrestricted liquid reserves held by the charity should be at least £30,000, representing approximately a quarter of ongoing annual overhead costs. At this level the trustees consider that they would be able to accommodate any fundamental funding changes. At the balance sheet date the charity's unrestricted general income fund reserves exceeded that amount, at £84,210. As always, future funding of the Arts Factory is an ongoing dialogue with all our funders.

Structure, governance and management

The charity is constituted as a company limited by guarantee and is also a registered charity. The directors serve also as the trustees of the charity. Reference and administrative details are shown in the company information page. The directors have the power to appoint additional trustees.

Trustees' responsibilities in relation to the financial statements

The charity trustees (who are also the directors of the Arts Factory Ltd for the purposes of company law) are responsible for preparing a trustees' annual report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the charity trustees to prepare financial statements for each year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period.

In preparing the 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 judgements and estimates that are reasonable and prudent;

Page 3

Arts Factory Ltd

Report of the Trustees (continued)

• state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.

The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and the group and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

In so far as the trustees are aware:

• there is no relevant information of which the charity's Independent Examiner is unaware; and

• the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant information and to establish that the Independent Examiner is aware of that information.

Approval by order of the board of trustees

MH BRyan

Director

Page 4

Independent Examiner's Report to the Trustees of Arts Factory Ltd ("the Company")

I report to the charity trustees on my examination of the accounts of Arts Factory Ltd for the year ended 31 December 2022.

Responsibilities and basis of report

As the charity's trustees of the Company (and also it's directors for the purposes of company law) you are responsible for the preparation of the accounts in accordance with the requirements of the Companies Act 2006 ("the 2006 Act").

Having satisfied myself that the accounts of the Company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of your charity's accounts as carried out under section 145 of the Charities Act 2011 ("the 2011 Act"). In carrying out my examination I have followed the Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.

Independent examiner's statement

Since the Company's gross income exceeded £250,000 your examiner must be a member of a body listed in section 145 of the 2011 Act. I confirm that I am qualified to undertake the examination because I am a member of The Institute of Chartered Accountants in England and Wales, which is one of the listed bodies.

I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe:

(1) accounting records were not kept in respect of the Company as required by section 386 of the 2006 Act; or (2) the accounts do not accord with those records; or

(3) the accounts do not comply with the accounting requirements of section 396 of the 2006 Act 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; or

(4) the accounts have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for Accounting and Reporting by Charities (applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)).

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.

Andrea L Davies ACA

21 August 2023

Chartered Accountant

Arian Accountants Limited

19 Sundew Close Cardiff CF5 2SE

Page 5

Arts Factory Ltd

Statement of Financial Activities (incorporating the income and expenditure account) for the year ended 31 December 2022

Note Income Donations and legacies 3 Income from charitable activities: Arts Factory operations 4 Investment income Total income Expenditure Expenditure on charitable activities: Arts Factory operations 5 Total expenditure Net income and net movement in funds for the year Reconciliation of funds Total funds brought forward Transfer between funds Total funds carried forward	Restricted Funds £ - 242,841 -	Unrestricted Funds £ 11,764 236,427 118 248,309 259,245 259,245 (10,936) 354,120 (5,234) 337,950	2022 Total £ 11,764 479,268 118 491,150 466,892 466,892 24,258 389,378 - 413,636	2021 Total £ 13,592 472,519 10
	242,841			486,121
	207,647			409,870
	207,647			409,870
	35,194 35,258 5,234			76,251 313,127 -
	75,686			389,378

The Statement of Financial Activities includes all gains and losses in the year and therefore a statement of total recognised gains and losses has not been prepared.

All income and expenditure derive from continuing activities.

The notes on pages 8 to 12 form part of these financial statements

Page 6

Arts Factory Ltd

Balance Sheet As at 31 December 2022

Note Fixed assets Tangible assets 8 Current assets Debtors 9 Cash at Bank and in hand Current Liabilities Creditors: Amounts falling due within one year 10 Net current (liabilities)/assets Total assets less current liabilities Creditors: Amounts falling due after more than one year 11 Net assets The funds of the charity: Unrestricted income funds Designated fund 12 General income fund Restricted income funds 13 Capital grants funds 14 Total charity funds	£ £ 253,740 22,244 230,201 252,445 (53,037) 199,408 453,148 (39,512) 413,636 £ £ 253,740 84,210 337,950 75,686 - 413,636 2022	£ £ 253,766 53,292 163,893 217,185 (33,491) 183,694 437,460 (46,332) 391,128 £ £ 256,927 97,193 354,120 35,258 1,750 391,128 2021	£ £ 253,766 53,292 163,893 217,185 (33,491) 183,694 437,460 (46,332) 391,128 £ £ 256,927 97,193 354,120 35,258 1,750 391,128 2021

			391,128

The directors consider that the company is entitled to exemption from the requirement to have an audit under the provisions of s.477 of the Companies Act 2006. Members have not required the company, under s.476 of the Companies Act 2006, to obtain an audit for the year ended 31 December 2022.

The directors acknowledge their responsibilities for:

(a) ensuring that the company keeps accounting records which comply with Sections 386 &387 of the Companies Act 2006 and

(b) preparing financial statements which give a true and fair view of the state of the affairs of the company as at 31 December 2022 and of its surplus or deficit for the year then ended in accordance with the requirements of ss.394 & 395 and which otherwise comply with the requirements of the Act, relating to the financial statements, so far as applicable to the company.

These financial statements, which have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 applicable to small companies were approved by the Trustees on 21 August 2023 and signed on its behalf. MH Bryan

……………………..

M Bryan

Director

The notes on pages 8 to 12 form part of these financial statements

Page 7

Arts Factory Ltd

Notes to the financial statements for the year ended 31 December 2022

1 Accounting policies

Basis of preparation

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice 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) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Arts Factory Ltd meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s).

Income

(i) donations and similar income

Donations and similar income is recognised when received.

(ii) revenue grants

Revenue grants are generally recognised in the period in which they are received.

(iii) capital grants

Capital grants are recognised as the corresponding expense is incurred.

(iv) other income

All other income is recognised in the period to which it relates.

Expenditure and irrecoverable VAT

Expenditure is recognised on an accrual basis as a liability is incurred. Expenditure includes any VAT which cannot be fully recovered, and is reported as part of the expenditure to which it relates:

Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them.
Governance costs include those costs associated with meeting the constitutional and statutory requirements of the charity and include the accountancy fees and costs linked to the strategic management of the charity.

Tangible fixed assets

Fixed assets are stated in the balance sheet at cost less depreciation.

Depreciation is provided in order to write off the cost of fixed assets over their estimated useful lives in equal annual instalments, as follows :

Motor Vehicles	25% on cost
Computer equipment	25% on cost
Tools and equipment	25% on cost

Pension costs

The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are recognised in the statement of financial activities when due.

Page 8

Arts Factory Ltd

Notes to the financial statements (continued) for the year ended 31 December 2022

1 Accounting policies cont'd

Fund accounting

Unrestricted funds are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity. Designated funds are unrestricted funds earmarked by the Trustees for particular purposes.

Restricted funds are subjected to restrictions on their expenditure imposed by the donor.

2 Legal status

The Arts Factory is a company limited by guarantee and has no share capital.

3 Donations and legacies

Unrestricted £ 11,764	2022 £ 11,764	2021 £ 13,592
11,764	11,764	13,592
Unrestricted £ 200,536 14,925 13,383 1,493	2022 £ 200,536 14,925 13,383 1,493	2021 £ 199,119 9,134 16,689 329
230,337 - - - - - - 6,000 - 90	230,337 49,929 - 30,000 1,750 25,176 29,361 6,000 - 106,715	225,271 49,929 54,792 - 6,750 14,647 24,304 18,750 10,000 68,076
236,427	479,268	472,519
Unrestricted £ 111,718 89,999 27,807 19,127 2,362	2022 £ 195,213 202,024 31,857 27,204 2,362	2021 £ 193,056 164,311 19,910 28,118 1,981
251,013 1,950 6,282	458,660 1,950 6,282	407,376 1,950 544
259,245	466,892	409,870

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Arts Factory Ltd

Notes to the financial statements (continued) for the year ended 31 December 2022

6 Net income for the year

The net income for the year is stated after charging:

Depreciation of tangible fixed assets: owned by the charity Accountancy fees	2022 £ 3,296 1,950	2021 £ 7,478 1,950

7 Staffing and trustee remuneration

Staff costs Wages and salaries Social Security costs Pension costs	2022 £ 183,390 9,336 7,967 200,693	2021 £ 125,817 2,965 4,191
		132,973

During the year the average number of employees was 13 (2021: 11). No employee received employee benefits in excess of £60,000 (2021: Nil).

No remuneration was paid to any trustees during the year nor any expenses reimbursed (2021: £Nil).

8 Tangible fixed assets COST As at 1 January 2022 Additions Disposals At 31 December 2022 DEPRECIATION As at 1 January 2022 Charge for period On Disposals At 31 December 2022 NET BOOK VALUE At 31 December 2022 At 31 December 2021	Land & buildings £ 371,153 - - 371,153 121,153 - - 121,153 250,000 250,000	Tools & equipment £ 2,567 - - 2,567 641 641 - 1,282 1,285 1,926	Motor vehicles £ 7,350 - - 7,350 5,513 1,837 - 7,350 - 1,837	Computer equipment £ 105,819 3,270 - 109,089 105,816 818 - 106,634 2,455 3	Total
					£ 486,889 3,270 -
					490,159
					233,123 3,296 -
					236,419
					253,740
					253,766

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Arts Factory Ltd

Notes to the financial statements (continued) for the year ended 31 December 2022

9 Debtors

Grants receivable Trade debtors Other debtors and prepayments Creditors: amounts falling due within one year Bank loans and overdrafts Trade creditors Taxes and social security Other creditors Accruals & deferred income Creditors: amounts falling due after more than one year Bank loans Other creditors	2022 £ - 18,667 3,577 22,244 2022 £ 7,200 11,124 3,056 591 31,066 53,037 2022 £ 39,512 - 39,512	2021 £ 18,466 34,826 -
		53,292
		2021 £ 7,600 8,716 9,621 1,304 6,250
		33,491
		2021 £ 46,332 -
		46,332

10 Creditors: amounts falling due within one year

11 Creditors: amounts falling due after more than one year

12 Designated funds

Tangible Fixed Assets fund	Balance at New beginning designations of year £ £ 252,016 3,270	Utilised/ released £ (3,296)	Transfer t/f capital grant funds £ 1,750	Balance at end of year £ 253,740

The tangible fixed assets fund represents the net book value of the charity's unrestricted tangible fixed assets. The fund has been created to recognise the fact that the tangible fixed assets are required for the day to day operations of the charity and are not available for other purposes or for general reserves.

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Arts Factory Ltd

Notes to the financial statements (continued) for the year ended 31 December 2022

13 Restricted income funds

Social Services Learning Disability SLA WCVA Active Inclusion Grant ACE's grant CFW Principality Youth Grant Fund Coalfields Fund Community Engagement Fund ICF Dementia Grant Recovery & reconnect Interlink Sydney Albert Fund Interlink WG Volunteer Resilience Grant Interlink Youth Grant Interlink Kindness Grant Interlink Winter Pressures Grant Kickstart Grant Lidl Food grant Mabon Trust Maerdy Wind Farm grants Neighbourhood Network Grant PCS Union South Wales Police Youth Trust Moondance Foundation NRW Rhondda Fach Garden Project Pen y Cymoedd Windfarm Revenue Grant Pen y Cymoedd Windfarm Youth Grant Peoples First Grant RCT Neighbourhood Network RCT Foodshare Fund RCT Summer of Fun Grant RCT Winter Hardship Grant RCT Youth grant RIF Dementia Grant WCVA Volunteering Wales Grant Waterloo Foundation Capital Grant Release Total funds	Balance at beginning of year £ - - - - - - 4,147 576 1,484 - 1,500 7,685 1,500 - - - - - - - - - - 9,800 - - 642 - - - - 7,924 - 35,258	Income in year £ 49,929 29,361 10,745 5,000 4,717 4,500 - - - 1,082 - - 7,713 500 400 1,500 1,000 9,500 10,000 30,000 4,467 20,676 4,500 10,000 1,000 555 - 2,002 5,721 15,000 11,223 - 1,750 242,841	Expenditure in year £ 49,929 32,372 10,745 1,320 4,717 4,500 4,273 584 1,484 1,082 1,500 7,686 9,213 500 400 1,643 1,091 5,093 - 14,874 4,467 22,487 23 2,259 1,041 557 642 716 5,721 2,583 4,471 7,924 1,750 207,647	Transfer t/f unrestricted funds £ - 3,011 - - - - 126 8 - - - 1 - - - 143 91 - - - - 1,811 - - 41 2 - - - - - - - 5,234	Balance at end of year £ - - - 3,680 - - - - - - - - - - - - - 4,407 10,000 15,126 - - 4,477 17,541 - - - 1,286 - 12,417 6,752 - -
					75,686

14 Capital grants funds Balance at 1 January 2022 Income for the year Expenditure for the year : release to income Balance at 31 December 2022	Pen y Cymoedd £ - - - -	Coalfields £ 1,750 - (1,750) -	Total £ 1,750 - (1,750)
			-

15 Analysis of net assets between funds

Unrestricted funds Designated funds General income fund Restricted income funds Restricted capital grant funds Total funds	Tangible fixed assets £ 253,740 - - - 253,740	Net current assets £ - 123,722 75,686 - 199,408	Long term liabilities £ - (39,512) - - (39,512)	Total £ 253,740 84,210 75,686 -
				413,636

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