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2021-03-31-accounts

Charity Registration No. 1184883

Company Registration No. 10674601 (England and Wales)

LEEDS CULTURE TRUST

(A COMPANY LIMITED BY GUARANTEE)

REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

LEEDS CULTURE TRUST

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees B Woroncow
J Jones-Buchanan
Councillor A D Cohen
Professor F J Finlay
S L Gladish
S L Hoyle
S J Payne
I Thompson
S M Watson
Secretary K Arrowsmith
Charity number 1184883
Company number 10674601
Registered office Marshall’s Mill
Marshall Street
Leeds
LS11 9YJ
Auditor Sagars Accountants Ltd
5-7 St Pauls Street
Leeds
LS1 2JG

LEEDS CULTURE TRUST

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT)

FOR THE YEAR ENDED 31 MARCH 2021

The trustees, who act as directors for the purposes of company law, present their report and financial statements for Leeds Culture Trust (also known as LEEDS 2023) for the year ended 31 March 2021.

The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's governing document, the Companies Act 2006 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 2019)”.

The trustees confirm that they complied with the duty in Section 4 of the Charities Act 2011 to have due regard to the Charity's Commission general guidance on public benefit "Charities and Public Benefit". The Trustees' Report clearly sets out the charitable objectives, our current activities and how they benefit the public.

Objectives and activities

Our vision is a thriving Leeds where creativity fuels opportunities for everyone. Our mission is to deliver a transformational year of creative experiences connecting and benefiting people now and into the future. Leeds Culture Trust's strategic objectives will be developed through 2021/22. Underpinning all activity through the year to 31 March 2021 are the charity's 'objects' as set out in the charity's articles and memorandum of association which are:

The charity also carries out these objectives through the provision of grants to parties which fall within the criteria above. The trustees act on advice and information from the senior management team which is responsible for the day to day management of the charity.

The trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake.

Achievements and performance

The first half of the year was focused on developing a vision, mission, and strategic plan which, with the rapidly changing social and economic external environment as result of Covid-19, required extensive re-working month by month to ensure Leeds Culture Trust positioned its aims and objectives in response to the pandemic and aligned to the recovery of the city.

In May 2020 Abigail Scott Paul was appointed Director of External Relations and joined CEO and Creative Director Kully Thiarai and Executive Director Mark Hollander, as the third member of the Leeds Culture Trust executive team. When lockdown measures came fully into force by the end of March, the team established a remote working policy and continued almost entirely from home through the 2020/21 financial year.

The impact of the pandemic on organisational development was considerable requiring deep sensitivity to the external environment and managing significant delays in vital areas including fundraising, staff build-up and programme development. Nevertheless, the team made substantial progress in reconnecting with artists, businesses, cultural organisations, and others that had contributed to the original European Capital of Culture bid-stage and forged strong new corporate relationships towards sponsorship opportunities. They also established relationships with trusts and foundations, convened a network of cultural practitioners and producers from across the city and at all scales, and consulted with key stakeholders on the emerging strategic plan.

The recruitment for a Head of Development post was progressed between May and July 2020 but did not lead to an appointment. Two development experts were then contracted from cultural consultancy ‘People Make it Work’ to support the team in developing a fundraising strategy and case for investment.

LEEDS CULTURE TRUST

TRUSTEES' REPORT (CONTINUED) (INCLUDING DIRECTORS' REPORT)

FOR THE YEAR ENDED 31 MARCH 2021

By November 2020 two fundraising officers were appointed to take this work forward and by March 2021 the staff complement had reached 12 including Executive Producer and Head of Finance and Operations.

Apart from the direct impact of Covid-19 on company development, the external environment led to other challenges to Leeds Culture Trust. Like other local authorities, Leeds City Council faced enormous budgetary challenges through Covid-19. This triggered a review of grant agreement terms and a 15% reduction to the grant funding level, which would be implemented from the following financial year (along with the same reduction to other large cultural institutions in the city). With council elections looming and the political landscape shifting to accommodate the devolution deal with Mayoral elections on the same day, we took the opportunity to engage with all political parties and candidates and to reinforce the evidence base for the economic and social value of culture. This work led to a commission with BOP Consulting building on previous bid-stage analysis towards a new Leeds 2023 prospectus and case for investment for targeted and broad distribution during 2021/22. This level of political engagement was important to ensure Leeds 2023 remained and was seen as politically neutral and to firmly position Leeds 2023 as an essential part of the recovery of the city and West Yorkshire.

The anticipated and in-depth work to develop the brand proposition, visual identity and strapline took place in consultation with stakeholders, Trustees and staff. This work was led by Director of External Relations Abigail Scott Paul working with the Sheffield based design team Peter and Paul towards a public launch in May 2021.

Creative Director and CEO Kully Thiarai led a team across the STEAM agenda towards a successful bid for a Research and Development commission from Festival UK 2022. Shortlisted as one of 30 projects and awarded £100,000 towards the development of the idea, an exciting multi-city project was proposed to the Festival UK 2022 team to be considered for full production as part of the final 10 projects that would be commissioned for the Festival. The project was designed to kick off in 2022 and complete in summer 2023. The second commission was not awarded but the project remains as a scalable option for the Leeds 2023 year. Receiving the initial commission was testament to the strength of Leeds Culture Trust as a new start-up company, to be able to bring together a multisector team and attract significant funds for the development of innovative work. It was a very time-consuming process for Kully Thiarai and, whilst an important and valuable project to have been part of, it highlighted capacity limitations within the team in an already challenging context. With the appointment of Emma Beverley in January 2021 as Executive Producer and staff to support the development of the creative learning and engagement areas of the programme, some of the immediate capacity challenges were somewhat eased and detailed work on the artistic programme was able to progress.

Two applications to Arts Council England were made through the year and both were successful. One was a project application for a community engagement programme with 23 communities across the wards of the city. It is called My World, My City, My Neighbourhood and will receive £223,000 in 2021/22 and a further £23,000 in the same year from Leeds Community Foundation as part of a new partnership. The other was from the Cultural Recovery Fund for £322,000 enabling the company to build back across multiple areas of work in the new financial year 2021/22. The year also saw the formation of a Development Board to support fundraising and development.

Future plans

As the country appears to be emerging from the immediate impact of the pandemic the company has laid all the groundwork for a productive year to come. Plans for 2021/22 include:

The executive team remains very aware that the economic and social impact of COVID-19 will continue to play its part in how Leeds 2023 maps out its programme and the business model has been designed to remain continuously agile.

LEEDS CULTURE TRUST

TRUSTEES' REPORT (CONTINUED) (INCLUDING DIRECTORS' REPORT)

FOR THE YEAR ENDED 31 MARCH 2021

Financial review

The total income for the year was £2,083,118 (2020: £1,488,213). This was applied to building the staff team, fundraising, strategic and business planning and accumulating resources to enable leverage for greater resources next year and the development of creative work. In total the expenditure amounted to £1,107,102 (2020: £214,695).

Budget

During 2020-2021, the charity received funding through its grant award from Leeds City Council totalling £1,790,000 (2020: £1,485,000) in the year.

Leeds City Council has awarded £10,745,000 towards a programme with an anticipated final budget of between £25m and £30m.

The senior management team is in dialogue with potential funders and assessing the fundraising targets in the light of Covid-19 and in discussion with trustees and key stakeholders.

Reserves policy

The charity carries a contingency which provides a means to meet its charitable objectives. No expenditure is authorised without the corresponding income being secured and all projects are presented to the executive team for approval before proceeding.

Leeds Culture Trust is a start-up charitable trust building towards a year of culture in 2023. Reserves must be gradually accumulated towards an anticipated £30m programme across all years of which approximately 50% will be required as expenditure in the final financial year 2023/24. The reserves policy will be addressed by the board in greater detail as the programme budget is developed.

As the budget develops there will be a level of flexibility built into the reserves policy to take account of the potential impact of Covid-19 on programme plans and available funds. On the designated Programme Development Fund a balance of £1,612,173 has been carried forward.

The trustees will review the circumstances of Leeds Culture Trust and the post Covid-19 economic climate to ensure flexibility in the business plan to safeguard credible delivery of Leeds 2023. The trustees are of the view that the charitable company is a going concern.

Investment policy

The charity has an investment policy advised by Brewin Dolphin in September 2019. The policy advised accumulating cash inflows in order to obtain reserves and recommended diversification of assets if reserve levels exceed expectation. The trustees have reviewed this policy in the light of Covid-19 as expenditure has been delayed due to the pandemic and the resultant surplus cash will be invested in interest-bearing accounts to match cashflow expectations.

LEEDS CULTURE TRUST

TRUSTEES' REPORT (CONTINUED) (INCLUDING DIRECTORS' REPORT)

FOR THE YEAR ENDED 31 MARCH 2021

Fundraising Activity

The Fundraising activity for Leeds Culture Trust is led by an in-house team employed directly by the charity and the team is overseen by the Executive Director. The dedicated team of fundraising and development staff raises funds for charitable activity from a combination of sources including individuals, corporates, trusts and foundations, informed by a fundraising strategy aligned to the business plan. Leeds Culture Trust has developed a clear and transparent strategy to deliver the new GDPR rules and part of this commitment is to ensure that we do not unintentionally contact vulnerable individuals who do not have a direct and obvious relationship with Leeds Culture Trust. Leeds Culture Trust has received no complaints relating to its fundraising practice.

Risk management

A risk register has been produced with risks owned by the relevant member of the senior management team. Risks and their mitigating actions are reviewed monthly at senior management team meetings and will be reviewed quarterly at board meetings.

Future public facing activity undertaken by the company will require an event plan to be produced so that all risks including health & safety and safeguarding are assessed and appropriate plans in place.

Structure, governance and management

The charity is a company limited by guarantee whose business is governed by a board of trustees. The charity is registered as a charity under the Charities Act 2011 and gained charitable status on 13 August 2019. The board of trustees comprises individuals who together are responsible for the governance of the charity. The charity is governed by its Memorandum and Articles of Association dated 19 March 2019.

The board of trustees is made up of a minimum of three trustees and a maximum of twelve. There are plans to increase this to a maximum of fourteen in the near future. There are currently nine trustees, and the full list of trustees is set out below.

The board of trustees met eight times in the period, with meetings held on a bi-monthly basis. The term of office for trustees is for a minimum of two years or maximum of five with the exception of Council nominees appointed for one-year terms.

In June 2021 Ruth Pitt resigned as chair: the trustees acknowledge Ruth’s contribution to Leeds 2023 and thank her for her work. During 2020 Professor Frank Finlay had been appointed as vice chair of the board and, following Ruth Pitt’s resignation, he became acting chair to cover the period whilst the new chair is being recruited.

The trustees, who are also the directors for the purpose of company law, and who served during the year were:

Trustee Lead Area
B Woroncow Governance and heritage
J V Blake, Baroness Blake of Leeds (resigned 25 Leader of Leeds City Council and executive member for
May 2021) inclusive growth and culture
J Jones-Buchanan Sport and community engagement
Councillor A D Cohen (resigned 25 May 2021 and Conservative city councillor, shadow cabinet member
reappointed 15 June 2021) for leisure culture and skills
Professor F J Finlay Acting Chair with effect from 25 June 2021, Higher
Education and international relations
S L Gladish Finance and audit
S L Hoyle Human resources
S J Payne Young people and community engagement
R A Pitt (resigned 25 June 2021) Chair
I Thompson Marketing and Communications
S M Watson Artistic / former Leeds 2023 steering group chair

LEEDS CULTURE TRUST

TRUSTEES' REPORT (CONTINUED) (INCLUDING DIRECTORS' REPORT)

FOR THE YEAR ENDED 31 MARCH 2021

The charity has assembled its board which brings together a vast array of knowledge and experience gained in a number of sectors, from education, finance and governance to sport, politics and community engagement. The trustees were recruited through an open process or by nomination from key partners. There is currently one vacant position on the board which is expected to a filled by an artist representing Leeds South Asian community. Going forward the plan is to assemble a number of distinct advisory groups comprised of community representatives to advise on various matters such as inclusivity and access.

The trustees will oversee Leeds 2023’s strategic direction, providing strong governance to ensure that Leeds 2023 delivers on its vision and objectives.

Upon appointment each trustee signed a Trustee Declaration Form and had sight of the Charity Commission’s Guidance The essential trustee: what you need to know, what you need to do along with a Conflicts of Interest policy and register.

The charity is led by a senior management team comprising:

Auditor

Sagars Accountants Ltd is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.

Disclosure of information to auditor

So far as each person who was a trustee at the date of approving this report is aware, there is no relevant audit information of which the charity's auditor is unaware. Additionally, each trustee has taken all the necessary steps that they ought to have taken as a trustee in order to make themselves aware of all relevant audit information and to establish that the charity's auditor is aware of that information.

The trustees' report was approved by the Board of Trustees.

F Finlay Trustee Dated: 21 September 2021

LEEDS CULTURE TRUST

STATEMENT OF TRUSTEES' RESPONSIBILITIES

FOR THE YEAR ENDED 31 MARCH 2021

The trustees, who are also the directors of Leeds Culture Trust for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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

In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that 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 Companies Act 2006. 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.

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

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LEEDS CULTURE TRUST

Opinion

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

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustee's 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 trustees are responsible for the other information contained within the annual report. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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 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 this regard.

Opinion on other matters prescribed by the Companies Act 2006

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

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LEEDS CULTURE TRUST (CONTINUED)

Matters on which we are required to report by exception

In light of the knowledge and understanding of the charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report included within the trustees’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 6, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Details of the extent to which the audit was considered capable of detecting irregularities, including fraud and noncompliance with laws and regulations are set out below.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion.

We obtained an understanding of the legal and regulatory frameworks within which the charitable company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 together with the Charities SORP (FRS102) 2019.

We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LEEDS CULTURE TRUST (CONTINUED)

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charitable company’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charitable company for fraud.

The laws and regulations we considered in this context were Charities Commission Regulations and requirements from funders.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other management and inspection of regulatory and legal correspondence, if any.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of grant and donation income and the override of controls by management.

Our audit procedures to respond to these risks included:

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Susan Seaman BA FCA CIOT (Senior Statutory Auditor)

SAGARS ACCOUNTANTS LTD Chartered Accountants & Statutory Auditor Gresham House 5-7 St Paul's Street Leeds LS1 2JG

23 September 2021

LEEDS CULTURE TRUST

STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 MARCH 2021

Notes
Income from:
Donations
2
Charitable Activities
3
Other income
4
Total income
Expenditure on:
Charitable activities
5
Net income for the year/
Net movement in funds
Total funds brought forward
Total funds carried forward		 Unrestricted
£
20,000
1,845,000
4,373
1,869,373
1,001,898
867,475
1,273,518
2,140,993		 2021
Restricted
£
-
213,745
-
213,745
105,204
108,541
-
108,541		 Total
£
20,000
2,058,745
4,373
2,083,118
1,107,102
976,016
1,273,518
2,249,534		 2020
Total
£
2,500
1,485,000
713
1,488,213
214,695
1,273,518
-
1,273,518

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

A comparative statement of financial activities for 2020 is not provided as all activity in 2020 was in relation to unrestricted funds.

Company Registration No. 10674601

LEEDS CULTURE TRUST

BALANCE SHEET

AS AT 31 MARCH 2021

Notes
Fixed assets
Tangible assets
11
Current assets
Debtors
12
Cash at bank and in hand
Creditors: amounts falling due within
one year
13
Net current assets
Total assets less current liabilities
Income funds
Restricted funds
14
Unrestricted funds:
Designated funds
14
General funds
14
Total unrestricted funds		 2021
£
£
16,396
55,979
2,422,642
2,478,621
(245,483)
2,233,138
2,249,534
108,541
1,612,173
528,820
2,140,993
2,249,534		 2020
£
£
9,595
497
1,279,362
1,279,859
(15,936)
1,263,923
1,273,518
-
575,000
698,518
1,273,518
1,273,518		 2020
£
£
9,595
497
1,279,362
1,279,859
(15,936)
1,263,923
1,273,518
-
575,000
698,518
1,273,518
1,273,518
1,273,518
-
1,273,518
1,273,518

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime.

The financial statements were approved by the Trustees on 21 September 2021.

F Finlay Trustee

LEEDS CULTURE TRUST

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2021

Notes
Cash flows from operating activities
Cash generated from/(absorbed by)
operations
15
Investing activities
Purchase of tangible fixed assets
Net cash used in investing activities
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 2021
£
£
1,153,472
(10,192)
(10,192)
-
1,143,280
1,279,362
2,422,642		 2020
£
£
1,289,840
(10,478)
(10,478)
-
1,279,362
-
1,279,362		 2020
£
£
1,289,840
(10,478)
(10,478)
-
1,279,362
-
1,279,362
1,279,362
-
1,279,362

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2021

1 Accounting policies

Charity information

Leeds Culture Trust is a private company limited by guarantee incorporated in England and Wales. The registered office is Marshall Mills, Marshall Street, Leeds, LS11 9YJ.

The charitable company is limited by guarantee, not having a share capital and consequently the liability of members is limited, subject to an undertaking by each member to contribute to the net assets of liabilities of the charitable company on winding up such amounts as may be required not exceeding £1.

Accounting convention

The financial statements have been prepared in accordance with the charitable company's memorandum and articles of association, the Charities Act 2011 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 2019)”, the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The charity 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 notes.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

Going concern

At the time of approving the financial statements and in light of the ongoing Covid-19 pandemic, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. The charity anticipates that it will continue to receive funding from Leeds City Council as agreed and scheduled over the next few years, up to and including January 2024. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives unless the funds have been designated for other purposes. Designated funds are unrestricted funds of the charity which the trustees have decided at their discretion to set aside to use for a specific purpose. Restricted funds are funds which are used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes. The cost of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

Incoming resources

All incoming resources are included in the statement of financial activities when entitlement has passed to the charity; it is probable that the economic benefits associated with the transaction will flow to the charity and the amount can be reliably measured. The following specific policies are applied to particular categories of income:

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

1 Accounting policies (Continued)

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Resources expended

All expenditure is included on an accruals basis and is recognised when there is a legal or constructive obligation to pay for its expenditure. All costs have been directly attributed or proportionally charged to the functional categories of resources expended in the SOFA.

Expenditure on charitable activities comprises the costs of programming and delivery, partnerships and development, and marketing and communications. These costs are classified as direct charitable expenses.

Governance costs comprise all costs involving the public accountability of the charity and its compliance with regulation and good practice. The costs include those related to statutory audit and legal fees together with an apportionment of overhead and support costs.

Grants payable are payments made to third parties in the furtherance of the charitable objectives of the charity. Grants are accounted for when either the recipient has a reasonable expectation that they will receive a grant and the trustees have agreed to pay the grant without condition, or the recipient has a reasonable expectation that they will receive a grant and any condition attaching to the grant is outside of the control of the charity.

All remaining costs are classified as support costs. The bases on which support costs have been allocated are set out in note 7.

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Office and IT equipment

25% straight line basis

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in net income/(expenditure) for the year.

Impairment of fixed assets

At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

1 Accounting policies (Continued)

Financial instruments

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, including creditors are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

Taxation

As a registered charity, the company is exempt from corporation tax on surpluses arising from its charitable activities during the year.

Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

1 Accounting policies (Continued)

Judgements and Key Sources of Estimation Uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. Details of these judgements are set out in the accounting policies.

2 Income from donations

Income from:
Donations
Donations in kind
Total income from donations
3
Income from Charitable Activities
Grants receivable:
Leeds City Council
University of Leeds
Trusts & Foundations
British Council
Festival 2022
Total funds carried forward		 Unrestricted
£
5,000
15,000
20,000
Unrestricted
£
1,790,000
55,000
-
-
-
1,845,000		 2021
Restricted
£
-
-
-
2021
Restricted
£
-
-
17,500
100,000
96,245
213,745		 Total
£
5,000
15,000
20,000
Total
£
1,790,000
55,000
17,500
100,000
96,245
2,058,745		 2020
Total
£
-
2,500
2,500
2020
Total
£
1,485,000
-
-
-
-
1,485,000

Leeds Culture Trust has signed agreements with Leeds City Council to provide grant funding totalling £10,745,000 over a five-year period. Income for the financial year has been recognised in line with the grant agreement payment schedule. Future income will also be recognised on a receipts basis which has been scheduled in line with the anticipated delivery timeframe of the project and the budgeted expenditure.

4 Other income

2021 2020
£ £
Other income 4,373 713

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

5 Charitable activities

Programming
and delivery
Partnerships
and
development
Marketing and
comms
Total
2021
£
£
£
£
Staff costs
351,966
28,037
5,208
385,211
Depreciation and impairment
3,391
-
-
3,391
Recruitment costs
648
3,459
828
4,935
Artistic programme
131,285
-
-
131,285
Travelling expenses
624
-
-
624
Advertising
-
-
117,129
117,129
Volunteering programme
-
1,000
-
1,000
Development costs
-
33,840
-
33,840
Research
-
16,040
-
16,040
487,914
82,376
123,165
693,455
Grant funding of activities (note 6)
329,852
-
-
329,852
Share of support costs (note 7)
48,951
10,968
16,398
76,317
Share of governance costs (note 7)
6,833
544
101
7,478
873,550
93,888
139,664
1,107,102
Analysis by fund
Restricted funds
105,204
-
-
105,204
Unrestricted funds
768,346
93,888
139,664
1,001,898
873,550
93,888
139,664
1,107,102		 Total
2020
£
56,001
883
3,867
29,452
12,224
6,913
-
-
-
109,340
45,000
51,979
8,376
214,695
-
214,695
214,695

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

6 Grants payable

Grants to institutions in support of cultural projects:
David Oluwale Memorial Association to support the development of Hibiscus
Rising, a sculpture created by Yinka Shonibare CBE in response to the life and
death of David Oluwale
Slung Low Limited for the development of the Leeds People’s Theatre, which is
several hundred citizens of Leeds who create large scale, political productions
with teams of professional theatre and filmmakers
The Grief Series to support spatial and participation research for the
development of All That Lives, production of ‘Funeral’ event and creation of
Mexican ‘Ofrenda’ shrine
The Performance Ensemble to support the development of ‘The Promise of a
Garden’ Project: performance, stories, music, dance, life in August 2021 in the
Quarry Theatre at Leeds Playhouse
Transform Festivaltosupport the research and development of ‘Transform 23’
Festival
Tutti Frutti Productionstosupport the development of Little Live Stories, a
testing ground for a city-wide children’s theatre programme in 2023 and to
support the development of a children’s theatre partnership consortium
Yorkshire Sculpture International towards the research and development of
Yorkshire Sculpture International 2023
Other research and development grants under £20,000		 2021
£
37,500
20,000
20,000
52,000
50,000
20,000
25,000
105,352
329,852		 2020
£
-
-
-
18,000
-
-
-
27,000
45,000

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

7 Analysis of governance and support costs

Support costs
Insurance
Professional fees
Subscriptions
Computer running costs
HR costs
Telephone
Training and development
Rent
Sundry expenses
Travelling expenses
Governance costs
Audit fees
Accountancy fees
Legal fees
Sundry expenses
Travelling expenses		 Programming
and delivery
£
1,285
29,396
310
3,717
4,640
1,502
5,221
2,851
29
-
48,951
3,244
-
3,061
528
-
6,833		 Partnerships
and
development
£
288
6,586
70
833
1,039
336
1,170
639
7
-
10,968
258
-
244
42
-
544		 Marketing
and
comms
£
431
9,847
104
1,245
1,554
503
1,749
955
10
-
16,398
48
-
45
8
-
101		 Total
2021
£
2,004
45,829
484
5,795
7,233
2,341
8,140
4,445
46
-
76,317
3,550
-
3,350
578
-
7,478		 Total
2020
£
1,358
41,804
1,681
2,794
209
461
324
2,160
655
533
51,979
3,540
3,700
-
809
327
8,376

Basis of allocation – support costs:

Support costs have been allocated on the basis of the cost of direct charitable activities.

Basis of allocation – governance costs:

Governance costs have been allocated on the basis of the cost of direct charitable activities.

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

8 Trustees

None of the trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year (2020: none).

During the year, none of the trustees were reimbursed expenses (2020: three trustees; £4,078 related to travelling costs).

9 Employees

Number of employees

The average monthly number employees during the year was:

Employment costs
Wages and salaries
Social security costs
Other pension costs		 2021
Number
7
2021
£
350,303
40,131
12,939
403,373		 2020
Number
2
2020
£
51,745
3,051
1,205
56,001

The number of employees whose emoluments (excluding pension contributions, employer's social security costs but including benefits in kind) fell within the following bands:

2021 2020
Number Number
£60,001 - £70,000 1 -
£70,001 - £80,000 1 -
£80,001 - £90,000 - -
£90,001 - £100,000 1 -

Key management personnel remuneration

The trustees consider the board of trustees, the Creative Director, the Executive Director and the Director of External Relations as comprising the key management personnel of the charity in charge of directing and controlling the charity and running and operating the charity on a day to day basis.

The total employee benefits of the key management personnel of the charity were £278,551 (2020 - £40,587). This includes pension contributions of £10,573 (2020 - £919) during the year.

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

10
Net movement in funds
2021
£
Net movement in funds is stated after charging/(crediting)
Fees payable to the company's auditor for the audit of the company's financial
statements
3,550
Depreciation of owned tangible fixed assets
3,391
11 Tangible fixed assets
Office
Equipment
Computer
Equipment
£
£
Cost
At 31 March 2020
1,908
8,570
Additions
-
10,192
At 31 March 2021
1,908
18,762
Depreciation & impairment
At 31 March 2020
243
640
Depreciation charged in the year
636
2,755
At 31 March 2021
879
3,395
Carrying amount
At 31 March 2021
1,029
15,367
At 31 March 2020
1,665
7,930		 2021
£
3,550
3,391		 2020

£

3,540

883
Total
£
10,478
10,192
20,670
883
3,391
4,274
16,396
9,595

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

12
Debtors
Amounts falling due within one year:
Grants receivable
Prepayments and accrued income
13
Creditors: amounts falling due within one year
Trade creditors
Grants payable
Accruals and deferred income
Social security and other taxes		 2021
£
55,000
979
55,979
2021
£
32,425
143,102
58,044
11,912
245,483		 2020
£
-
497
497
2020
£
11,095
-
4,841
-
15,936

The above grants payable are expected to be paid during the year ended 31 March 2022.

Movement in recognised provisions and funding commitments during the year

Grants commitments recognised at 1 April 2020
New grant commitments charged to the SOFA in the year
Grants paid during the year
Grants commitments recognised at 31 March 2021		 2021
£
-
329,852
(186,750)
143,102		 2020
£
-
45,000
(45,000)
-

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

14 Movement in funds

Restricted funds
British Council
Festival 2022
IVE
Total restricted funds
Unrestricted funds
Designated funds
Restricted Funds
Unrestricted funds
Designated funds		 Balance at
1 April
2020
£
-
-
-
-
698,518
575,000
1,273,518
Balance at
1 April
2019
£
-
-
-
-		 Incoming
resources
£
100,000
96,245
17,500
213,745
1,869,373
-
2,083,118
Incoming
resources
£
-
1,488,213
-
1,488,213		 Resources
expended
£
-
(96,245)
(8,959)
(105,204)
(1,001,898)
-
(1,107,102)
Resources
expended
£
-
(214,695)
-
(214,695)		 Transfers
£
-
-
-
-
(1,037,173)
1,037,173
-
Transfers
£
-
(575,000)
575,000
-		 Balance at
31 March
2021
£
100,000
-
8,541
108,541
528,820
1,612,173
2,249,534
Balance at
31 March
2020
£
-
698,518
575,000
1,273,518

The British Council fund represents £100,000 from The British Council to support Research and Development work by Leeds 2023 to explore some early creative ideas that will encourage artists to connect with their diaspora heritage, build new bridges that link the past with the future and expand on their artistic practice; explore new artistic avenues and projects that utilise new technologies and digital connections; and maximise the opportunity afforded by the 75th anniversary of the arrival of Empire Windrush to celebrate and recognise the contribution made by the diaspora communities on the cultural life of the UK.

Festival UK8 2022 provided £96,245 for an R&D project by a creative consortium led by Leeds 2023

£17,500 was provided by IVE for Leeds 2023 to collaborate in the research, development and implementation of creating a city wide response to the pre-existing challenge of inequality of access, and also respond creatively to the major challenges which it will need to overcome if it is to provide a rich arts and cultural offer for children and young people post-COVID-19.

Designated funds are earmarked by the trustees for the Programme Development Fund.

Analysis of net assets between funds
Fixed assets
Current assets
Creditors: amounts falling due within one year		 Unrestricted
funds
£
16,396
2,370,080
(245,483)
2,140,993		 Restricted
funds
£
-
108,541
-
108,541		 Total funds
£
16,396
2,478,621
(245,483)
2,249,534

LEEDS CULTURE TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2021

15
Cash generated from operations
(Deficit)/surplus for the year
Adjustments for:
Depreciation and impairment of tangible fixed assets
Movements in working capital:
(Increase) in debtors
Increase in creditors
Cash generated from/(absorbed by) operations		 2021
£
976,016
3,391
(55,482)
229,547
1,153,472		 2020
£
1,273,518
883
(497)
15,936
1,289,840

16 Related party transactions

During the year, payments totalling £4,800 (2020: £nil) were made to the spouse of a trustee for consultancy on the strategic plan. No payments were made to Under the Moon Ltd (2020: £26,879 for fees and expenses) of which one of the trustees is the director.

Funding of £55,000 (2020: £nil) was received from the University of Leeds and a further £15,000 was received in kind (2020: £nil) to cover staff costs. Payments totalling £9,360 were made for services provided to the Festival 22 project by University of Leeds staff: a trustee is employed by the University of Leeds.

Grant funding of £1,790,000 (2020: £1,485,000) was received from Leeds City Council and no invoiced income was received (2020: £712 for recharge of consultancy costs for start-up) and payments totalling £12,650 were made as a contribution to the overall cost of the National Poetry Centre development consultant (2020: £561 for room hire and Light Night sponsorship): two trustees were Leeds City Council’s representatives on the board of trustees.

The trustees believe that there are no other related party transactions to disclose.